The ITO, Ward-9(4), Ahmedabad V. Shri Deviprasad Shantilal Yadav, Ahmedabad

ITA 55/AHD/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2176 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-06-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 07-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINGH
• Assessee Lawyers: MRS ARTI N SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMADABAD BEFORE SHRI G.C.GUPTA , VICE PRESIDENT AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NOS. 241/AHD/2011 ASSESSMENT YEAR : 2007-08 SHRI DEVIPRASAD SHANTILAL YADAV 56-B, SATYANARAYAN ROW HOUSE, JASODANAGAR CHAR RASTA, OPP CANS, AHMEDABAD V/S . INCOME TAX OFFICER WARD-9(4), AHMADABAD. PAN NO. A AAPY5978K (APPELLANT) .. (RESPONDENT) INCOME TAX OFFICER WARD-9(4), AHMADABAD. V/S . SHRI DEVIPRASAD SHANTILAL YADAV 56-B, SATYANARAYAN ROW HOUSE, JASODANAGAR CHAR RASTA, OPP CANS, AHMEDABAD (APPELLANT) .. (RESPONDENT) BY REVENUE SHRI D. K. SINGH, SR. D.R. /BY ASSESSEE MRS. ARTI N. SHAH, A.R. /DATE OF HEARING 11.06.2013 /DATE OF PRONOUNCEMENT 26.07.2013 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THESE ARE TWO APPEALS AT THE BEHEST OF ASSESSEE IN ITA NO. 241/AHD/2011AND AT THE BEHEST OF REVENUE IN ITA NO. 55/AHD/2013, WHICH HAVE EMANATED FROM THE ORDER OF CIT(A)-XV, AHMADABA D, DATED 16.12.2010 IN ASSESSEES CASE AND DATED 10 TH OCTOBER, 2012 IN CASE OF REVENUE FOR ASSESSMENT YEAR 2007-08 IN BOTH CASES. THESE TWO A PPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS C OMMON ORDER FOR THE SAKE ITA NOS. 55/AHD/2013 ASSESSMENT YEAR : 2007-08 ITA NOS. 241/AHD/11 & 55 AHD 13, A.Y. 07-08 PAGE 2 OF CONVENIENCE. THE SOLE GROUND OF ASSESSEES APPE AL IS AGAINST CONFIRMING THE ADDITION OF RS.83,90,216/- U/S.40(A)(IA) OF THE IT ACT. 2. THE ASSESSEE IS ENGAGED IN THE TRANSPORTATION BU SINESS. THE ASSESSEE HAD SHOWN FREIGHT PAYMENT OF RS.1,50,11,870/-. ON V ERIFICATION OF THIS PAYMENT, THE APPELLANT HAD NOT DEDUCTED TDS ON RS.2 0,29,608/-. ON REMAINING FREIGHT PAYMENTS ASSESSEE HAD DEDUCTED TD S IN SOME CASES AND IN SOME CASES HAD NOT DEDUCTED TDS THOUGH THE PAYME NT EXCEEDS RS.20,000/- OR RS.50,000/- AND PAID THE DEDUCTED TD S AFTER THE DUE DATE. IT MEANS THAT FOR THE PAYMENT MADE UPTO FEBRUARY, 2007 , ASSESSEE HAD TO REMIT THE TDS DEDUCTED INTO GOVERNMENT ACCOUNT ON BEFORE 31/03/2007 AND IN THE CASE OF PAYMENT MADE IN THE MONTH OF MARCH, 2007, T HE ASSESSEE CAN MADE THE PAYMENT INTO GOVERNMENT ACCOUNT BEFORE FILING H E RETURN OF INCOME. TOTAL PAYMENTS OR CREDIT FOR THE MONTH OF MARCH AMOUNTING TO RS.48,19,055/- IN WHICH J.V. OF AVADH CARRYING CORPORATION OF RS. 27, 58,330/-. OUT OF TOTAL J.V. OF RS.18,48,146/- CASH FREIGHT PAID TO AVADH CARRYI NG CORPORATION UPTO THE MONTH OF FEBRUARY-2007. THEREFORE, PAYMENT DURING THE MONTH OF MARCH REMAINED RS. 20,60,725/-. ACCORDINGLY, TOTAL FREIG HT PAYMENTS CAME TO RS. 1,09,21,544/- ON WHICH ASSESSEE HAD NOT DEDUCTED TD S THOUGH ASSESSEE WAS LIABLE TO DEDUCT TDS OR TDS DEDUCTED BUT NOT RE MIT IN GOVERNMENT ACCOUNT WITHIN TIME LIMIT. FURTHER, ON VERIFICATIO N OF THE DETAILS OF PAYMENT, IT WAS NOTICED THAT MOST OF THE PAYMENTS WERE EXCEED O F RS.20,000/- OR RS.50,000/- AND THE APPELLANT HAD NOT DEDUCTED TDS ON THESE PAYMENTS. THE A.O. GAVE SHOW CAUSE NOTICE ON THIS ISSUE. THE ASSESSEE REPLIED VIDE ITA NOS. 241/AHD/11 & 55 AHD 13, A.Y. 07-08 PAGE 3 LETTER DATED 24.12.2009, WHICH WAS NOT FOUND CONVIN CING. THUS, HE MADE ADDITION OF RS.1,09,21,544/- U/S. 40(A)(IA) OF THE IT ACT. 3. THE ASSESSEES CARRIED THE MATTER BEFORE THE CIT( A). LD. CIT(A) DELETED THE ADDITION FOR THE PAYMENT MADE IN MARCH, 2007 ON WHICH TDS HAD BEEN DEDUCTED AND PAID BOTH ON OR BEFORE DUE DATE O F FILE RETURN. THE LD. CIT(A) CONFIRMED THE ADDITION PAYMENTS MADE ON OR B EFORE 01.-3.2007 AND CALCULATION MADE BY THE CIT(A) ON PAGE NO.8 OF THE APPEAL ORDER. SHE FURTHER ANALYZED ALL THE PAYMENTS AS WELL AS TDS DEDUCTED AND PAID ON PAGE NOS. 8,9,10 & 11 OF THE APPEAL ORDER AND CALCULATED FINA L DISALLOWANCE AT RS.83,90,216/- OUT OF TOTAL ADDITION OF RS.1,28,25, 540/- MADE AS PER PARA 14 OF THE ORDER: 14. THE CORRECT AMOUNT OF ADDITION U/S.40(A)(IA) C OMES TO RS.1,50,11,877 RS.20,29,608 (AMOUNT ON WHICH TDS HAS BEEN DEDUCTED AS PER AO BEFORE MARCH, 2007) = RS.1,29,82 ,269. OUT OF RS.1,29,82,269 ONLY RS.1,56,729 ( AMOUNT PAID TO AVADH CARRYING CORPORATION IN MARCH 2007) CAN BE REDUCED WHICH BRINGS THE FIGURE OF RS.1,28,25,540. THEREFORE ADDITION IS TO BE CON SIDERED OF RS.1,28,25,540 OUT OF WHICH AS PER ABOVE TABLE ADDI TION IS UPHELD OF RS 46,20,578 U/S.40(A)(IA) (THE AMOUNT PAID/CREDITED BEFORE 1.3.2007 ON WHICH TDS SHOULD HAVE BEEN DEPOSITED IN GOVERNMENT ACCOUNT BEFORE 31.3.2007 BUT IT WAS NOT DONE BY THE APPELLANT.) INSTEAD OF RS.34,82,164 MADE BY THE AO. THE PLEA T HAT TDS WAS DEPOSITED BEFORE FILING OF RETURN DOES NOT HELP BEC AUSE AS PER STATUTORY PROVISIONS OF SECTION 40(A)(IA) TDS SHOUL D HAVE BEEN DEPOSITED IN GOVERNMENT ACCOUNT BEFORE 31.3.2007 ON PAYMENTS/CREDITS MADE BEFORE 1.3.2007, HOWEVER ON PAYMENTS/CREDITS MADE IN THE MONTH OF MARCH 2007 TD S CAN BE ITA NOS. 241/AHD/11 & 55 AHD 13, A.Y. 07-08 PAGE 4 DEPOSITED BEFORE FILING OF RETURN AND THAT IS WHY R S.7,74,135 AS PER ABOVE TABLE IS DIRECTED TO BE DELETED. 4. NOW THE ASSESSEES IS BEFORE US. LD. COUNSEL FOR THE APPELLANT FILED DETAIL COMPUTATION BEFORE US AND CLAIMED THAT LD. A .O. DISALLOWED U/S.40(A)(IA) AT RS.1,09,21,544/-. THE LD. CIT(A) ALLOWED THE DE DUCTION U/S. 40(A)(IA) AT RS.36,69,742/- AND DISALLOWED RS.83,90,216/-. HE A LSO GAVE A BIFURCATION ON ALLOWABLE DEDUCTION AND NOT ALLOWABLE DEDUCTION IN PAPER BOOK. IT WAS CONTENDED BY THE LD. COUNSEL THAT FREIGHT EXPENSES WHEREIN TAX DEDUCTED AND PAID BEFORE DUE DATE OF FILING OF RETURNED ON RS. 3 3,34,234/- AND CLAIMED THAT NO DISALLOWANCE U/S.40(A)(IA) IS TO BE MADE BY THE A.O. HE FURTHER RELIED IN CASE OF BAPUSAHEDB NANASAHEB DHUMAL VS. ACIT, 43 DTR 367 (M UM-TRIB) & H. S. MOHINDRA TRADERS VS. ITO, 43 DTR 382 (DEL-TRI B). AT THE OUTSET, LD. SR. D.R. RELIED UPON THE ORDER OF THE CIT(A) AND REQUES TED TO CONFIRM THE ORDER OF THE CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE APPELLANT AS CLAIMED, HAD MADE PAYMENT AFTER DEDUCTING THE TDS IN THE GOVERNMENT EXCHEQUER BEFORE DUE DATE OF RETURN. HONBLE CALCUTTA HIGH COURT IN CASE OF CIT VS. VIRGIN CREATIONS IN ITA NO. 302 OF 2011 AND RECENTLY , HONBLE GUJARAT HIGH COURT IN CASE OF CIT-I VS. ROYAL BUILDERS IN TAX APPEAL NO. 520 OF 2012, BY DISMISSING THE REVENUES APPEAL HELD THAT WHERE THE APPELLANT HAD DEDUCTED THE TDS AND MADE P AYMENT TO THE GOVERNMENT EXCHEQUER BEFORE THE DUE DATE OF RETURN FILE, IS ALLOWABLE AS PER AMENDED PROVISION MADE IN SECTION 40(IA) W.E.F. 01. 04.2010 THAT ANY SUCH SUM/TAX HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR, O R HAS BEEN DEDUCTED ITA NOS. 241/AHD/11 & 55 AHD 13, A.Y. 07-08 PAGE 5 DURING THE PREVIOUS YEAR BUT PAID AFTER THE DUE DAT E SPECIFIED IN THE SUB SECTION 1 OF SECTION 139, SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME OF THE PREVIOUS YEAR, IN WHICH SUCH TAX HAS BEEN PAID. THEREFORE, WE ARE SETTING ASIDE THE ISSUE TO THE A. O. TO VERIFY THE DETAILS OF TDS MADE AND PAID WITH REFERENCE TO DUE DATE OF RET URN OF THE RESPECTIVE YEARS AND AFTER VERIFICATION, ALLOW THE ASSESSEES CLAIM. ITA NO. 55/AHD/2013 (REVENUES APPEAL) 6. THE SOLE GROUND OF REVENUES APPEAL IS AGAINST D ELETING THE PENALTY OF RS.28,48,144/- LEVIED U/S. 271(1)(C), DELETED BY TH E CIT(A). 7. LD. A.O. MADE ADDITION U/S. 40(A)(IA) OF THE IT ACT AT RS. 1,09,21,544/- AND ALSO INITIATED PENALTY PROCEEDING U/S. 271(1)(C ) FOR FURNISHING INACCURATE PARTICULARS OF INCOME. BEFORE IMPOSING PENALTY U/S . 271(1)(C), THE A.O. GAVE REASONABLE OPPORTUNITY TO THE ASSESSEE, WHICH WAS R EPLIED BY THE ASSESSEE. THE LD. A.O. DID NOT CONVINCE WITH THE SUBMISSION M ADE BY THE APPELLANT. THUS, HE IMPOSED 100% PENALTY AT RS.28,48,144/-, WH ICH IS 100% AMOUNT OF TAX SOUGHT TO BE EVADED. 8. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAS ALLOWED THE APPEAL OF THE ASSESSEE BY OBSERVING THAT SECTION 271(1)(C) IS DEEMING PROVISI ON AND NO SATISFACTION OF FURNISHING INACCURATE PARTICULARS CAN BE DRAWN FOR IMPOSITION OF PENALTY. HE FURTHER RELIED IN CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD., 322 ITR 15 8 (SC) AND HONBLE GUJARAT HIGH COURT DECISION IN CASE OF CIT- IV VS. M/S. VENUS ENGINEERS IN TAX APPEAL NO. 1292 OF 2010, ORDER DAT ED 29.08.2011, HELD IN ITA NOS. 241/AHD/11 & 55 AHD 13, A.Y. 07-08 PAGE 6 FAVOUR OF ASSESSEE THAT FOR DISALLOWANCE U/S. 40(A) (IA) OF THE ACT, PENALTY U/S.271(1)(C) OF THE ACT IS NOT LEVIABLE. 9. NOW THE REVENUE IS BEFORE US. AS WE HAVE ALREAD Y SET ASIDE THE MAIN ADDITION MADE U/S. 40(A)(IA) TO THE A.O. FOR VERIFI CATION. FURTHER HONBLE JURISDICTION HIGH COURT IN CASE OF CIT-IV VS. M/S. VENUS ENGINEERS (SUPRA), IS SQUARELY APPLICABLE. THE ADDITION MADE U/S. 40(A)( IA) IS A DEEMING PROVISION, THERE IS NO CONCEALMENT OF INCOME AS WELL AS FURNIS HING INACCURATE PARTICULARS OF INCOME. THUS, WE DISMISS THE APPEAL OF THE REVE NUE. 10. IN THE RESULT, ASSESSEES APPEAL IN ITA NO. 241 /AHD/2013, IS ALLOWED FOR STATISTICAL PURPOSE AND REVENUES APPEAL IN ITA NO. 55/AHD/2013 IS DISMISSED. THESE ORDERS PRONOUNCED IN OPEN COURT ON 26.07.2013 SD/- SD/- (G.C.GUPTA) (T.R. MEENA) VICE PRESIDENT ACCOUNTANT MEMBER TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. '#$ / APPELLANT 2. &'#$ / RESPONDENT 3. )*)+ ' ', / CONCERNED CIT 4. ' ',- ' / CIT (A) 5. 01'' +, ' ''' +, 34 * / DR, ITAT, AHMEDABAD 6. 167 89 / GUARD FILE. BY ORDER/ , :/3' )' ' ''' +, 34 * <