DCIT, Parwanoo V. M/s The Baghat Urban Co-op Bank Ltd., Solan

ITA 52/CHANDI/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68461 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-08-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 14-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Non-deduction of tax

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 52/CHD/2013 ASSESSMENT YEAR:2009-10 THE DY.COMMISSIONER OF INCOME TAX, VS THE BAGHAT URBAN COOP. CIRCLE, BANK LTD., PARWANOO. SOLAN. PAN NO. AAACT-5130B (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI MANJIT SINGH RESPONDENT BY : SHRI VISHAL MO HAN DATE OF HEARING : 26.08.2013 DATE OF PRONOUNCEMENT : 06.09.2013 O R D E R PER SUSHMA CHOWLA, J.M. THE REVENUE HAS FILED THE APPEAL AGAINST THE ORDER OF THE CIT(APPEALS), SHIMLA DATED 01.10.2012 RELATING TO A SSESSMENT YEAR 2009-10 AGAINST THE ORDER PASSED UNDER SECTION 143( 3) OF THE INCOME- TAX ACT, 1961 ( 'THE ACT' FOR SHORT). 2. THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPE AL: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) HAS ERRED IN LAW WHILE DELETING THE AD DITION OF RS. 49,26,886/- MADE ON ACCOUNT OF INVOKING THE PROVISI ONS OF SECTION 40(A)(IA) BY RELYING UPON THE JUDGEMENT OF HON'BLE SPECIAL BENCH VISHAKHAPATNAM IN THE CASE OF ACIT VS. MERILYN SHI PPING AND TRANSPORT (2012) 70 DTK 81 IGNORING THE JUDGEMEN T OF HON'BLE MADRAS HIGH COURT IN THE CASE OF TUBE INVESTMENT OF INDIA LTD. AND AND ANR. V.ASSTT. CIT AND ORS. (2010) 325 ITR 6 10. 2. IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT(APPE ALS) THE SET-ASIDE AND THAT OF THE ASSESSING OFFICER RESTORE D. 3. THE APPELLANT CRAVES LEAVE TO ADD ANY OTHER GROUND OF APPEAL WHICH MAY ARISE AT THE TIME OF HEARING. 2 3. THE ONLY ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT. T HE LD. AR FOR THE ASSESSEE FAIRLY POINTED OUT THAT THE SAID ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY THE CIT(APPEALS) FOLLOWING THE SPEC IAL BENCH DECISION IN THE CASE OF ACIT VS. MERILYN SHIPPING & TRANSPOR TS, ITA NO.477 /VIG /2008 (SB). IT WAS FURTHER POINTED OUT BY THE LD. AR THAT THE ISSUE ON MERITS, WHETHER THE PROVISIONS OF TAX DEDU CTED AT SOURCE ARE APPLICABLE OR NOT AND MERITING DISALLOWANCE UNDER S ECTION 40(A)(IA) OF THE ACT WAS NOT ADJUDICATED BY THE CIT(APPEALS). A PRAYER WAS MADE BY THE LD. AR FOR THE ASSESSEE THAT THE ISSUE BE DECIDED ON THE MERITS FOR WHICH THE SAME MAY BE SENT BACK TO THE C IT(APPEALS). 4. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON TH E ORDER OF THE ASSESSING OFFICER AND POINTED OUT THAT THE ASSESSEE HAS FAILED TO DEDUCT TAX AT SOURCE, THE SAID EXPENDITURE WAS NOT ALLOWAB LE IN VIEW OF THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD SH OWN INTEREST EXPENDITURE OF RS. 49,26,886/- WAS DISALLOWED BY TH E ASSESSING OFFICER IN VIEW OF NON DEDUCTION OF TAX AT SOURCE, FOLLOWIN G THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE LD. AR FOR THE A SSESSEE POINTED OUT THAT THE MERITS OF THE ISSUE I.E. THE NATURE OF INT EREST EXPENDITURE HAS NOT BEEN CONSIDERED BY THE CIT(APPEALS) BEFORE MAKI NG THE AFORESAID DISALLOWANCE FOR NON-DEDUCTION OF TAX AT SOURCE UND ER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. IN THE ENTIRETY OF T HE ABOVESAID FACTS AND CIRCUMSTANCES, WE DEEM IT FIT TO RESTORE BACK THE S AID ISSUE TO THE FILE OF CIT(APPEALS) TO RE-DETERMINE THE NATURE OF EXPEN DITURE INCURRED BY THE ASSESSEE UNDER THE HEAD INTEREST AND WHETHER TH E ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE OUT OF SUCH INTEREST PAID B Y IT AND CONSEQUENTLY 3 WORK OUT THE DISALLOWANCE, IF ANY UNDER SECTION 40( A)(IA) OF THE ACT. THE CIT(APPEALS) SHALL AFFORD REASONABLE OPPORTUNIT Y OF HEARING TO THE ASSESSEE. IN VIEW THEREOF, THE GROUNDS OF APPEAL R AISED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF SEPTEMBER, 2013. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 6 TH SEPTEMBER,2013 POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH