The DCIT, Circle-2, Ahmedabad V. M/s. A One Chemicals, Ahmedabad

ITA 521/AHD/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3883 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 03-03-2016
• Court: TRIBUNAL

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV , VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMB ER ./ I.T.A. NO. 521/AHD/2016 ( ASSESSMENT YEARS : 2009-10) D.C.I.T. CIRCLE-1(2), AHMEDABAD / VS. M/S. A ONE CHEMICALS 302, SHANTI HOUSE, NR. MADHUSUDAN HOUSE, OPP. NAVRANGPURA TELEPHONE EXCHANGE, C. G. ROAD, AHMEDABAD, PIN - 380009 ./ ./ PAN/GIR NO. : AADFA0198A ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VINOD TANWANI, SR.D.R. / RESPONDENT BY : SHRI S. N. DIVATIA, A.R. DATE OF HEARING 26/02/2020 !'# / DATE OF PRONOUNCEMENT 03/03/2020 / O R D E R PER T. S. KAPOOR - AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LEARNED CIT(A)-10, AHMEDABAD, DATED 01/01/2016 RELATING TO ASSESSMENT YEAR 2013-14. 2. THE APPEAL WAS EARLIER DISMISSED FOR LOW TAX EFF ECT VIDE TRIBUNAL ORDER DATED 19.01.2018. HOWEVER, ON AN APPLICATION FILED BY THE REVENUE, THE SAID ORDER OF TRIBUNAL WAS RECALLED AN D APPEAL WAS LISTED FOR HEARING ON MERITS VIDE ORDER DATED 27.12.2019. ITA NO. 521/AHD/16 [DCIT VS. M/S. A ONE CHEMICALS] A.Y. 2009-10 - 2 - 3. AT THE OUTSET, THE LEARNED DR SUBMITTED THAT THE RE WERE TWO ADDITIONS; ONE ON ACCOUNT OF EXCISE DUTY AND ONE ON ACCOUNT OF NON- DEDUCTION OF TDS UNDER S.40(A)(IA) OF THE ACT, WHIC H THE CIT(A) HAS DELETED. THE LEARNED DR SUBMITTED THAT TAX DEDUCTI ON BY ASSESSEE WAS A STATUTORY REQUIREMENT, WHICH HE FAILED TO DO THEREF ORE, THE AO HAD RIGHTLY MADE ADDITION AND SIMILARLY, THE AO HAD MAD E THE ADDITION ON ACCOUNT OF CENVAT CREDIT IN THE VALUATION OF CLOSIN G STOCK AS PER THE PROVISIONS OF SECTION 145A OF THE ACT. 4. THE LEARNED AR, ON THE OTHER HAND, STATED THAT A S REGARDS THE ISSUE OF EXCISE DUTY, SIMILAR ISSUE AROSE IN AY 2008-09 A ND DURING SET ASIDE PROCEEDINGS BY THE HONBLE ITAT THE AO HAD ALREADY ALLOWED RELIEF TO THE ASSESSEE VIDE ORDER DATED 01.11.2012 AND SIMILA RLY IN AY 2012-13, THE LEARNED CIT(A) HAD HIMSELF ALLOWED RELIEF TO TH E ASSESSEE AND NO APPEAL HAS BEEN FILED BY THE DEPARTMENT. IT WAS SU BMITTED THAT THE ASSESSEE HAS BEEN FOLLOWING CONSISTENT METHOD OF AC COUNTANCY IN RESPECT OF EXCISE DUTY SINCE FY 2005-06. IT WAS FURTHER SU BMITTED THAT ANY ADJUSTMENT MADE TOWARDS CLOSING STOCK WILL HAVE NEU TRALIZING EFFECT AS CLOSING STOCK BECOMES OPENING STOCK IN NEXT YEAR. THEREFORE, HE RELIED ON THE SUBMISSIONS MADE BEFORE THE LEARNED CIT(A) A ND ALSO RELIED ON THE ORDER PASSED BY THE LEARNED CIT(A). 5. AS REGARDS THE OTHER ISSUE OF NON DEDUCTION OF T DS FROM THE PAYMENTS MADE TO TWO PARTIES, THE LEARNED AR SUBMIT TED THAT FIRSTLY, THE ASSESSEE WAS NOT LIABLE TO DEDUCT TDS AS IT WAS NOT HIT BY THE PROVISIONS OF SECTION 194J OF THE ACT AND WITHOUT PREJUDICE IT WAS SUBMITTED BEFORE THE LEARNED AO AND LEARNED CIT(A) THAT THE PAYEES H AD INCLUDED THE PAYMENT PAID BY THE ASSESSEE IN THEIR PROFIT AND LO SS ACCOUNT AND HAVE FILED NECESSARY CERTIFICATES TO THIS EFFECT AND WHI CH THE LEARNED CIT(A) HAS RIGHTLY CONSIDERED IN RIGHT PERSPECTIVE. 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. ITA NO. 521/AHD/16 [DCIT VS. M/S. A ONE CHEMICALS] A.Y. 2009-10 - 3 - 7. WE FIND AS REGARDS THE ISSUE OF TAX DEDUCTION AT SOURCE, IT IS UNDISPUTED THAT ASSESSEE HAD FILED CONFIRMATIONS FR OM THE PAYEES, A COPY OF WHICH IS PLACED AT PAPER BOOK PAGE NOS. 15 TO 19 . DETAILED SUBMISSIONS WERE MADE BEFORE THE LEARNED CIT(A) AND RELYING UPON THE SUBMISSIONS OF THE ASSESSEE, THE LEARNED CIT(A) HAD RIGHTLY DELETED THE ADDITION BY HOLDING AS UNDER: 4.1 NEXT GROUND OF APPEAL IS AGAINST THE ADDITIONS OF RS.12,55,686/- MADE U/S.40(A)(IA) OF THE ACT. THE AO MADE THE ADD ITIONS AS TDS WAS NOT DEDUCTED UPON THIS AMOUNT PAID TO M/S. BHARUCH ENVIRO INFRASTRUCTURE LTD. AND ENVIRO TECHNOLOGY LTD. THE APPELLANT STATED THAT THE RECEIPT OF THE SAID AMOUNT HAS BEEN SHOWN BY THE RECIPIENT COMPANY AND FILED CERTIFICATE BEFORE THE AO TO THAT EFFECT, BUT THE AO REJECTED THE CONTENTIONS. THE APPELLANT CONTENDED THAT THE AMENDED PROVISIONS RELATED TO TDS HAVE RETROSPECTIVE EFFECT AS PER HONBLE DELHI HIGH COURT JUDGMENT IN THE CASE OF M/S. ANSAL LANDMARK TOWNSHIP PVT. LTD. (377 ITR 635) AND ACIT VS. ANAGR AM CAPITAL LTD. (ITA NO. 4531/AHD/2011 DT. 6.11.2015) DECIDED BY TH E HONBLE ITAT AHMEDABAD. LOOKING TO THESE JUDGMENTS, THE ADDITIO NS MADE BY THE AO ARE NOT FOUND JUSTIFIED, HENCE DELETED . THIS GROUND OF APPEAL IS ALLOWED . 8. THE LEARNED CIT(A) HAS MADE A FINDING OF FACT TH AT AS PER THE AMENDED PROVISIONS RELATED TO TDS WHICH HAS BEEN HE LD TO BE RETROSPECTIVE BY HONBLE DELHI HIGH COURT IN THE CA SE OF M/S. ANSAL LANDMARK TOWNSHIP PVT. LTD. 377 ITR 635 , THE ASSESSEE CANNOT BE HELD TO BE ASSESSEE-IN-DEFAULT. THEREFORE, WE DO NOT FI ND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) AND IN VIEW OF THE ABOV E, GROUNDS NOS. 1 & 2 ARE DISMISSED. 9. AS REGARDS THE GROUND NOS. 3 & 4, WE FIND THAT S IMILAR ISSUE AROSE IN AY 2008-09 AND AFTER SET ASIDE PROCEEDINGS BY HO NBLE ITAT, THE AO HAD ALLOWED RELIEF TO THE ASSESSEE VIDE ORDER DATED 01.11.2012. THEREFORE, IN VIEW OF THE ABOVE, THE FINDINGS OF TH E LEARNED CIT(A) ARE CORRECT WHEREIN HE HAS HELD THAT ASSESSE HAD BEEN C ONSISTENTLY AND ITA NO. 521/AHD/16 [DCIT VS. M/S. A ONE CHEMICALS] A.Y. 2009-10 - 4 - REGULARLY FOLLOWING THE EXCLUSIVE METHOD OF VALUATI ON OF CLOSING STOCK AND IT WAS REVENUE NEUTRAL. IN VIEW OF THE ABOVE, GROUND NOS. 3 & 4 ARE DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. SD/- SD/- (RAJPAL YADAV) (T. S. KAPOOR) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD: DATED 03/03/2020 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 03/03/2 020