DCIT 9(2), MUMBAI V. HATWAY CALBE & DATACOM (P) LTD, MUMBAI

ITA 5757/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8950 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 30-08-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 12-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOLI SRINIVAS RAO
• Assessee Lawyers: NITISH JOSHI
• Keywords: Rule of consistency
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER & SHRI RAJENDRA, ACCOUNTANT MEMBER I.T.A. NO.5757/M/2011 ASSESSMENT YEAR: 2005-2006 THE DCIT, RANGE 9(2), AAYAKAR BHAVAN, R. NO.218, 2 ND FLOOR, M.K. ROAD, MUMBAI 400 020. VS. M/S. HATHWAY CABLE & DATACOM (P) LTD., RAHEJAS, 1 ST FLOOR, CORNER OF MAIN AVENUE & VP ROAD, SANTAXRUZ (W), MUMBAI 400 054. PAN:AAACC6814B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI GOLI SRINIVAS RAO RESPONDENT BY : SHRI NITISH JOSHI DATE OF HEARING: 30.08.2012 DATE OF ORDER: 05.09.2012 O R D E R PER VIJAY PAL RAO, JM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 6.6.2011 OF CIT (A) FOR THE ASSESSMENT YEAR 2005-2006. 2. THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE G ROUNDS IN THIS APPEAL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE DISALLOWANCE MADE U/S 43B ON ACCOUNT OF UNPAID SERVICE TAX LIABILITY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT (A) ERRED IN DELETING ADDITION OF RS. 1 9,60,000/- MADE BY THE ASSESSING OFFICER U/S 41(1) OF THE IT ACT, 1961 IN SPITE OF THE FACT THAT, EVEN THOUGH ADEQUATE OPPORTUNITIES WERE GIVEN TO THE ASSESSEE 2 I.T.A. NO.5757/M/2011 DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE FAI LED TO FILE THE NECESSARY CONFIRMATIONS AND UNABLE TO EXPLAIN AS TO WHY THE DEBTS ARE OUTSTANDING SINCE 01.04.2003. 3. GROUND NO.1 IS REGARDING DISALLOWANCE U/S 43B ON ACCOUNT OF UNPAID SERVICE TAX LIABILITY. WE HAVE HEARD THE LEARNED AR AS WEL L AS THE LEARNED DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AN IDE NTICAL ISSUE HAS BEEN CONSIDERED AND DECIDED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006- 2007 IN ITA NO.5999/M/2011 VIDE ORDER DATED 8.8.201 2 IN PARA 4 AS UNDER: 4. WE OBSERVE THAT AO MADE DISALLOWANCE OF RS. 54, 71,000/- U/S 43B OF THE ACT IN RESPECT OF OUTSTANDING SERVICE TA X LIABILITY. WE OBSERVE THAT LD CIT (A) DELETED SAID DISALLOWANCE B Y CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOBLE & HEWITT (I) PVT. LTD. 305 ITR 324/166 TAXMAN 48 AND ALSO CONSIDERING THE DECISION OF ITAT CHENNAI BENCH IN THE CASE OF ACIT VS. REAL IMAGE MEDIA TECHN OLOGIES (P) LTD. 306 ITR (AT) 106 (CHENNAI) THAT THE AMOUNT OF SERVI CE TAX COLLECTION BY THE ASSESSEE AND PAID TO THE GOVERNMENT IS NOT D EBITED TO THE ACCOUNTS AND NOR THE ASSESSEE CLAIMED DEDUCTION AND , THEREFORE, SAID AMOUNT COULD NOT BE DISALLOWED. MOREOVER, WE AGREE WITH LD CIT (A) THAT THE QUESTION OF DISALLOWANCE WILL ARISE UNDER SECTION 43B OF THE ACT ONLY IF THE ASSESSEE HAS CLAIMED ANY DEDUCTION IN THE PROFIT AND LOSS ACCOUNT. THEREFORE, WE AGREE WITH LD CIT (A) THAT DISALLOWANCE MADE BY AO BY MAKING THE ADDITION OF OUTSTANDING SE RVICE TAX LIABILITY AT THE END OF THE YEAR IS NOT JUSTIFIED. ACCORDING LY, WE UPHOLD THE ORDER OF LD CIT (A) AND REJECT GROUND OF APPEAL TAK EN BY THE DEPARTMENT. 3 I.T.A. NO.5757/M/2011 4. TO MAINTAIN THE RULE OF CONSISTENCY, WE FOLLOW T HE EARLIER ORDER OF THIS TRIBUNAL IN DECIDING THIS ISSUE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 5. REGARDING GROUND NO.2, AT THE TIME OF HEARING TH E LEARNED AR OF THE ASSESSEE HAS POINTED OUT THAT THIS ISSUE OF ADDITION U/S 41( 1) AS RAISED IN THE GROUND NO.2 BY THE REVENUE DOES NOT ARISE FROM THE IMPUGNED ORDER. HE HAS FURTHER POINTED OUT THAT THIS ISSUE WAS IN FACT INVOLVED IN THE ASSESSM ENT YEAR 2006-2007 AND NOT IN THIS YEAR. HE HAS REFERRED THE ASSESSMENT YEAR 2006-200 7 AND SUBMITTED THAT THE AO DISALLOWED THIS AMOUNT OF RS. 19.60 LAKHS U/S 41(1) FOR THE ASSESSMENT YEAR 2006- 2007. THE LEARNED DR HAS NOT DISPUTED THIS FACTUAL POSITION. ACCORDINGLY, WE DISMISS GROUND NO.2 BEING NOT EMANATING FROM THE IM PUGNED ORDER. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF SEPTEMBER, 2012. SD/- SD/- (RAJENDRA ) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE : 5.9.2012 AT :MUMBAI OKK COPY TO : 1. M/S. HATWAY CABLE & DATACOM (P) LTD., MUMBAI. 2. DCIT 9(2), MUMBAI. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR H, BENCH, ITAT, MUMBAI. 6. GUARD FILE. 4 I.T.A. NO.5757/M/2011 // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI