The ITO, Ward-1, Bhuj V. M/s Balaji Voyage Private Ltd., Mundra (Kutch)

ITA 519/RJT/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6632 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 03-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: HEMEN FURIYA
• Keywords: Retrospective amendment
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE SHRI S.V. MEHROTRA , ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY , MEMBER ITA NO. 519 / RJT /201 4 & CO NO. 12/RJT/2015 : ASS T. YEAR : 2006 - 07 ITO, WARD - 1, BHUJ (APPELLANT) VS M/S. BALAJI VOYAGE PRIVATE LTD., P.O. MOTI BER, SANGHIPURAM PAN : AACCB7311C (RESPONDENT /CROSS - OBJECTOR ) APPELLANT BY : SHRI AVINASH KUMAR, DR RESPONDENT BY : SHRI HEMEN FURIYA, C.A DATE OF HEARING : 2 2 /0 3 /201 7 DATE OF PRONOUNCEMENT : 24 /0 3 /201 7 O R D E R PER K. NAR A SIMHA CHARY, MEMBER, JM : TH IS APPEAL BY THE REVENUE IS CHALLENGING AND THE CROSS - OBJECTION BY THE ASSESSEE IS SUPPORTING THE ORDER DATED 18.6.2014 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, RAJKOT (FOR SHORT HEREINAFTER REFERRED TO AS LD. CIT(A) ) IN APPEAL NO.CIT (A) - II/RJT/0033/13 - 14. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE, A COMPANY DEALING IN LOGISTICS AND SERVICES, FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2006 - 07 ON 29.12.2016 DECLARING TOTAL INCOME OF RS.24,57,910/ - AND 2 M/S. BALAJI VOYAGE PVT. LTD. ITA NO. 519/RJT/2014 & CO NO.12/RJT/2015 ASSESSMENT U/S 143(3) OF T HE INCOME TAX ACT, 1961 (FOR SHORT HEREINAFTER REFERRED TO AS THE ACT ) WAS CONCLUDED DETERMINING THE SUM AT RS.5,87,87,960/ - . THE ASSESSEE CHALLENGED THE SAME BEFORE THE LD. CIT(A) AND THE MATTER TRAVELLED UP TO THE LEVEL OF INCOME TAX APPELLATE TRIBUNA L. PURSUANT TO THE DIRECTIONS OF THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, AN ORDER U/S 143(3) R.W.S. 254 OF THE ACT WAS PASSED ON 27. 9. 2011 ASSESSING THE TOTAL INCOME OF ASSESSEE AT RS.24,81,660/ - , HOWEVER, SUBSEQUENTLY THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE - COMPANY MADE CERTAIN PAYMENTS TO THE PARTIES ON ACCOUNT OF CONTRACT/SUB - CONTRACT WORK AND PROFESSIONAL AND TECHNICAL SERVICES TO THE TUNE OF RS.38,29,136/ - U/S 40(A)(IA) OF THE ACT ON WHICH TAX WAS DEDUCTED AT SOURCE, BUT NOT CREDITED INTO THE GOVERNMENT ACCOUNT WITHIN THE STIPULATED TIME, AS SUCH THE ASSESSING OFFICER AFTER HEARING THE ASSESSEE DISALLOWED THE SAID AMOUNT OF RS.38,29,136/ - U/S 40(A)(IA) OF THE ACT AND ADDED IT BACK TO THE TOTAL INCOME OF THE ASSESSEE U/S 154 OF THE ACT BY AN ORDER DATED 22.3.2013. THE ASSESSEE CHALLENGED THE SAME BEFORE THE LD. CIT(A) IN THE IMPUGNED APPEAL AND THE LD. CIT(A) BY WAY OF THE IMPUGNED ORDER DELETED THE ADDITION OF RS.38,29,136/ - . 3. THE REVENUE CHALLENGED THE SAME BEFORE US IN THIS APP EAL AND IT IS ARGUED FOR THE REVENUE THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE U/S 40(A)(IA) OF THE ACT. ACCORDING TO THE REVENUE, THE DECISION OF THE SPECIAL BENCH OF THE MUMBAI TRIBUNAL IN BHA RTI SHIPYARD LTD. IS APPLICABLE TO THE EFFECT THAT THE AMENDMENTS CARRIED OUT BY THE FINANCE ACT, 2010 WITH 3 M/S. BALAJI VOYAGE PVT. LTD. ITA NO. 519/RJT/2014 & CO NO.12/RJT/2015 RETROSPECTIVE EFFECT FROM ASSESSMENT YEAR 2010 - 11 CANNOT BE HELD TO BE RETROSPECTIVE FROM THE ASSESSMENT YEAR 2005 - 06. 4. PER CONTRA , IT IS ARGUED BY THE LD. AR THAT WHILE DELETING THE ADDITION OF RS.38,29,136/ - LD. CIT(A) RIGHTLY RELIED UPON THE DECISION OF THE HON BLE KOLKATA HIGH COURT IN THE CASE OF VIRGIN CREATIONS, ITA NO. 302 OF 2011 DATED 23.11.2011 AND ALSO THE DECISION OF THE HON BLE SUPREM E COURT IN THE CASE OF CIT VS ALOME EXTRUSIONS LTD., 319 ITR 306 , AS SUCH THE DECISION OF THE LD. CIT(A) WHICH IS A RESULT OF FOLLOWING THE BINDING PRECEDENTS CANNOT BE DISTURBED. 5. WE HAVE CAREFULLY GONE THROUGH THE RECORD IN THE LIGHT OF THE ARGUMENTS ADVANCED BEFORE US. IN THIS MATTER, THERE IS ABSOLUTELY NO DISPUTE THAT THE TAX WAS DEDUCTED AT SOURCE, BUT THE ONLY ISSUE IS THAT IT WAS DEPOSITED IN THE GOVERNMENT ACCOUNT AFTER THE DUE DATE BUT BEFORE THE DATE FOR FILING OF RETURN U/S 139(1) OF THE ACT . THE HON BLE SUPREME COURT IN THE CASE OF ALOME EXTRUSIONS LTD. (SUPRA) HELD THAT WHEN A PROVISO IS INSERTED TO REMEDY UNINTENDED CONSEQUENCES AND TO MAKE THE SECTION WORKABLE, THE PROVISO WHICH SUPPLIES THE OBVIOUS OMISSION THERE, IS REQUIRED TO BE READ RETROSPECTIVELY IN ITS OPERATION. THE HON BLE KOLKATA HIGH COURT IN THE CASE OF VIRGIN CREATIONS (SUPRA) HELD THAT THE AMENDMENT TO SEC. 40(A)(IA) OF THE ACT BY THE FINANCE ACT, 2010 W.E.F. 1.4.2010 IS RETROSPECTIVE IN ITS NATURE. THE LD. CIT(A) RIGHTLY REACHED THE CONCLUSION THAT THE ADDITION MADE IN THIS MATTER BY THE ASSESSING OFFICER IS DELETABLE IN VIEW OF THE ABOVE BINDING PRECEDENTS. THE REVENUE FAILED TO ESTABLISH BEFORE US HOW SUCH AN APPROACH OF HET LD. CIT(A) IS WRONG. WE, THEREFORE, FIND TH AT THE CONCLUSION REACHED BY 4 M/S. BALAJI VOYAGE PVT. LTD. ITA NO. 519/RJT/2014 & CO NO.12/RJT/2015 THE LD. CIT(A) CANNOT BE DISTURBED AND THE GROUNDS OF APPEAL ARE LIABLE TO BE DISMISSED. 6. INSOFAR AS THE CROSS - OBJECTION IS CONCERNED, THEY ARE SUPPORTIVE IN NATURE OF THE FINDINGS OF LD. CIT(A) AND SINCE WE DISMISSED THE AP PEAL OF THE REVENUE CONFIRMING THE FINDINGS OF THE LD. CIT(A), THE CROSS - OBJECTION HAS BECOME REDUNDANT, AS SUCH IT IS ALSO LIABLE TO BE DISMISSED. 7. IN THE RESULT, BOTH THE APPEAL AND THE CROSS - OBJECTION ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 4 T H MARCH , 201 7 . SD / - / - S D / - / - D/ - ( S.V. MEHROTRA ) ACCOUNTANT MEMBER ( K. NARASIMHA CHARY ) JUDICIAL MEMBER RAJKOT , DATE : MARCH , 201 7 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, RAJKOT 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, RAJKOT