M/s. Gurunanak Engineering Industries, Faridabad V. ACIT, Faridabad

ITA 5282/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74299 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 23-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH SENIOR
• Assessee Lawyers: K C SINGHAL
• Section: 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C : NEW DELHI) BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY, JUDICIAL MEMBER ITA NOS.5282 & 5283/DEL./2013 (ASSESSMENT YEARS : 2009-10 & 2010-11) M/S. GURUNANAK ENGINEERING INDUSTRIES, VS. ACIT, C IRCLE 1, 840, SECTOR 15A, FARIDABAD. FARIDABAD (HARYANA). (PAN : AAFFG2881A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.C. SINGHAL, AR REVENUE BY : SHRI SATPAL SINGH, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : BOTH THESE APPEALS FILED BY THE ASSESSEE EMANATE FR OM THE ORDER OF CIT (APPEALS), FARIDABAD BOTH DATED 02.08.2013 FOR THE ASSESSMENT YEARS 2009-10 AND 2010-11. 2. THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN TH E CIVIL CONSTRUCTION OF GOVERNMENT AND SEMI-GOVERNMENT ACTIVITIES. THE RET URN OF INCOME WAS FILED OF RS.69,12,310/- ON 30.09.2009. THE ASSESSING OFF ICER MADE ADDITION FOR NOT DEPOSITING THE TDS DEDUCTED DURING THE FINANCIA L YEARS BY APPLYING THE PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME-TAX A CT, 1961. IN BOTH ASSESSMENT YEARS 2009-10 AND 2010-11, THE CIT (A) H AS HELD THAT THE ITA NO.5282/DEL./2013 2 AMENDMENT TO SECTION 40(A)(IA) WAS INTRODUCED BY TH E FINANCE ACT W.E.F. 01.04.2010 AND NOT APPLICABLE FOR ASSESSMENT YEARS 2009-10 & 2010-11 AND SUSTAINED THE DISALLOWANCE. 3. NOW, THE ASSESSEE IS IN APPEAL BY TAKING THE FOL LOWING GROUNDS OF APPEAL :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN SUST AINING THE DISALLOWANCE OFRS.79,14,821/- MADE BY A.O. U/S 40(A )(IA) OF INCOME TAX ACT 1961 SINCE THE AMENDMENT MADE BY FIN ANCE ACT 20 10 WAS RETROSPECTIVE IN NATURE AS HELD BY VA RIOUS HIGH COURTS AS WELL AS BY VARIOUS BENCHES OF THE TRIBUNA L. 2. THE APPELLANT CRAVES TO ADD, OR AMEND THE GROUND S OF APPEAL, IF REQUIRED AND NECESSARY. 4. WHILE PLEADING ON BEHALF OF THE ASSESSEE LD. AR SUBMITTED THAT THE ASSESSEES CASE IS COVERED BY VARIOUS DECISION OF H ON'BLE HIGH COURTS INCLUDING THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. NARESH KUMAR REPORTED IN 262 CTR 369 (DELHI) WHEREIN THE H ON'BLE DELHI HIGH COURT HAS HELD THAT THE TDS ON CERTAIN PAYMENTS IS DEDUCTED IN THE ASSESSMENT YEAR 2008-09 BUT PAID AFTER THE END OF P REVIOUS YEAR BUT BEFORE FILING OF RETURN U/S 139(1) OF THE INCOME-TAX ACT, 1961 THEN EXPENDITURE IS ALLOWABLE. THE AMENDMENT TO SECTION 40(A)(IA) HAS TO BE GIVEN FULL PLAY KEEPING IN MIND THE OBJECT AND PURPOSE BEHIND THE S ECTION. IT SHOULD BE INTERPRETED LIBERALLY AND EQUITABLE SO THAT AN ASSE SSEE SHOULD NOT SUFFER UNINTENDED AND DELETERIOUS CONSEQUENCES BEYOND WHAT THE OBJECT AND PURPOSE ITA NO.5282/DEL./2013 3 OF THE PROVISION MANDATES. HON'BLE HIGH COURT HAS ALSO HELD THAT ONE IMPORTANT CONSIDERATION IN CONSTRUING A MACHINERY S ECTION IS THAT IT MUST BE CONSTRUED SO AS TO EFFECTUATE THE LIABILITY IMPOSED BY THE CHARGING SECTION AND TO MAKE THE MACHINERY WORKABLE AND IN VIEW OF THIS, HON'BLE HIGH COURT FIND NO MERITS IN THE APPEAL OF THE REVENUE. LD. AR SUB MITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY VARIOUS DECISI ONS OF HON'BLE HIGH COURT INCLUDING THE DECISIONS OF HON'BLE JURISDICTIONAL H IGH COURT. THE OTHER CASE LAWS RELIED UPON BY LD. AR ARE AS FOLLOWS :- SL.NO. PARTICULARS PAPER BOOK PAGE NO. 1. CIT VS. VIRGIN CREATIONS ORDER DATED 23.11.2011 OF HON'BLE HIGH COURT OF CALCUTTA 1 2. CIT VS. ROYAL BUILDERS ORDER DATED 11.02.2013 OF HON'BLE GUJARAT HIGH COURT 2 3 3. CIT VS. NARESH KUMAR 221 TAXMAN 59 (DELHI) 4 1 5 4. BALBIR SINGH VS. ITO - ITA NO.3479/ DEL/2012 DATED 17.09.2012 16 18 5. ITO VS. TARU LEADING EDGE (P) LTD ITA NO.3592/DEL/2011 DATED 22.05.2012 19 22 6. PB. ST. CO-OP HSG BLDG SOCIETIES LTD. 23 TAXMAN.COM 99 23 29 7. PIYUSH C MEHTA VS. ACIT 20 TAXMAN.COM 473 (MUM) 30 38 8. ACIT VS. M K GURUMURTHY 22 TAXMANN.COM 72 BANG 39 45 5. LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES B ELOW. ITA NO.5282/DEL./2013 4 6. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. IT I S UNDISPUTED THAT THE TDS SO DEDUCTED WAS DEPOSITED PRIOR TO THE DUE DATE OF FILING RETURN OF INCOME AS PER SECTION 139(1) OF THE ACT. THE AMEND ED PROVISION OF THE SECTION PROVIDES TO ALLOW THE EXPENSES, IF TDS DEDU CTED THEREON, IS PAID PRIOR TO DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139 OF THE ACT. CONSIDERING THE FACTUAL ASPECT AND LEGAL POSITION IN VIEW OF TH E VARIOUS DECISIONS OF HON'BLE HIGH COURTS, WE FIND THAT THE CIT (A) WAS N OT JUSTIFIED IN SUSTAINING THE ADDITION. ACCORDINGLY, WE DIRECT TO DELETE THE ADDITION AND ALLOW THE ASSESSEES APPEAL. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE STAND ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 14 TH DAY OF MARCH, 2014. SD/- SD/- (A.T. VARKEY) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 14 TH DAY OF MARCH, 2014 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), FARIDABAD. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.