M/s. Parshv Chem. Industries, Bhavnagar V. The Income tax Officer,Ward-2(3), Bhavnagar

ITA 582/AHD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5755 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 22-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B D BAROT
• Assessee Lawyers: Y B OZA
• Keywords: TDS; Set aside
• Section: 40(a)(ia); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC AHMEDABAD BENCH SMC AHMEDABAD BENCH SMC AHMEDABAD BENCH SMC BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI SHRI N.S.SAINI, ACCOUNTANT MEMBER SHRI N.S.SAINI, ACCOUNTANT MEMBER SHRI N.S.SAINI, ACCOUNTANT MEMBER SHRI N.S.SAINI, ACCOUNTANT MEMBER DATE OF HEARING :19-7-10 DRAFTED ON: 19 -7-10 ITA NO.582/AHD/2010 ASSESSMENT YEAR: 2005-06 M/S. PARSHV CHEMICALS INDUSTRIES, 308- 309,MADHAV HILL,WAGHAWADI ROAD, BHAVNAGAR. VS INCOME TAX OFFICER, WARD 2(3), INCOME TAX OFFICE, BHAVNAGAR. PAN/GIR NO. :AACFP 5044M (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI Y.B. OZA RESPONDENT BY: SHRI B.D. BAROT, D.R. ORDER ORDER ORDER ORDER PER N.S.SAINI , ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-XX, AHMEDABAD DA TED 03-11- 2009. 2. THE SOLE GROUND OF APPEAL TAKEN BY THE ASSESSEE READS AS UNDER:- 2 THE LEARNED ASSESSING OFFICER HAS ERRED IN ADDING I NTEREST EXPENSES OF `.1,09,808/- BY DISALLOWING THE SAME UND ER SECTION40(A)(IA)WHERE IN FACT NEITHER PROVISIONS OF SECTION 40(A) (IA) ARE APPLICABLE NOR SECTION 154 HAS BEEN CORREC TLY APPLIED TO PASS THE SAID ORDER. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSM ENT WAS MADE ON26-3-2007 AT AN INCOME OF ` 5,000 LATER ON VERIFI CATION OF THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE THE LEARNED ASSESS ING OFFICER FOUND THAT THE ASSESSEE HAD DEBITED ` 1,44,986 FOR PAYMENT OF INTEREST AND TDS WAS SHOWN AT ` 3,588/-. ON VERIFICATION OF FORM NO,.15H AND 15G FILED BY THE ASSESSEE THE LEARNED ASSESSING OFFICER FOUND THAT ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE IN VIEW OF THE PROVISIONS OF SECTION 194 FROM THE INTEREST EXPENSES OF ` 1,09,808 /- WHICH WAS NOT DONE. ACCORDING TO THE LEARNED ASSESSING OFFICER IN TEREST EXPENSES OF ` 1,09,808/- WAS NOT ALLOWABLE DEDUCTION AS PER PRO VISION OF SECTION 40(A)(IA) AND THEREFORE, HE DISALLOWED THE INTEREST EXPENSES BY INVOKING THE PROVISIONS OF SECTION 154 OF THE ACT. 3. IN APPEAL BEFORE LEARNED COMMISSIONER OF INCOME T AX(APPEALS) IT WAS SUBMITTED BY THE ASSESSEE THE OUT OF TOTAL INTER EST PAYMENT OF ` 1,44,986/-, ` 1,09,808/- WAS PAID TO THE DEPOSITORS WITHOUT DEDUCTION OF TAX AT SOURCE AS THE DEPOSITOR HAD FILED DECLARATIO N IN FORM NOS.15H AND 15G AS PRESCRIBED IN SECTION 197A. THE ASSESSE E WAS THEREFORE, RIGHT IN NOT DEDUCTING TDS FROM INTEREST PAID TO THE DEPOSITORS. THIS WAS DISCLOSED IN THE ASSESSMENT PROCEEDINGS. FURTHE R COPIES OF FORM NO.15H AND 15G WERE DULY FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, THE LEARNED ASSESSING OFFIC ER WAS NOT JUSTIFIED 3 IN DISALLOWING THE INTEREST EXPENDITURE OF ` 1,09,8 08/- BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 5. IN APPEAL, LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESSING OFFICER BY OBSERVING THAT THE ASSESSEE HAS NEITHER ATTENDED NOR FILED ANY CLA RIFICATION OR DOCUMENTARY EVIDENCE BEFORE HIM REGARDING FILING OF FORM NO.15H AND 15G BY THE DEPOSITORS IN THE OFFICE OF THE CONCERNE D CIT AS CLAIMED BY THE ASSESSEE. 6. AT THE TIME OF HEARING THE LEARNED AUTHORISED REP RESENTATIVE OF THE ASSESSEE SUBMITTED THAT BEFORE THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS) THE ASSESSEE FAILED TO APPEAR ON THE DATES FIXED FOR HEARING. HE SUBMITTED THAT ONE MORE OPPORTUNITY SHOULD BE GRANTED TO THE ASSESSEE TO PRESENT HIS CASE BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND THAT HE UND ERTAKES TO APPEAR BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ON THE DATE OF HEARING. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT H AVE ANY OBJECTION TO THE SUBMISSION OF THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE. 9. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL ON RECORDS, I FIND THAT THE APPEAL OF THE ASSESSEE WAS DISMISSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AS COPI ES OF FORMNO.15H AND 15G WERE NOT FILED BY THE ASSESSEE BE FORE HIM. I FIND THAT THE ASSESSEE FAILED TO APPEAR ON THE DATE OF H EARING FIXED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND THE REFORE, THE REQUIRED DETAILS AND PARTICULARS NOT BEING FILED BE FORE HIM THE APPEAL OF THE ASSESSEE CAME TO BE DISMISSED. IN MY OPINION, IT SHALL BE IN THE 4 INTEREST OF JUSTICE TO GRANT ONE MORE OPPORTUNITY TO THE ASSESSEE FOR PLEADING ITS CASE BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AS PRAYED FOR BY THE LEARNED AUTHORISED R EPRESENTATIVE OF THE ASSESSEE SO THAT THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS) CAN DECIDE THE APPEAL AFTER CONSIDERING T HE SUBMISSION OF THE ASSESSEE. I ALSO FIND THAT THE LEARNED DEPARTMEN TAL REPRESENTATIVE HAS NO OBJECTION TO THE MATTER BEING RESTORED BACK TO THE FILE OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOR RE-AD JUDICATION OF THE APPEAL AFTER HEARING THE ASSESSEE. I THEREFORE , SET ASIDE THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AN D RESTORE THE MATTER BACK TO HIS FILE TO DECIDE THE APPEAL AFRESH AFTER ALLOWING REASONABLE AND PROPER OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO SUO-MOTO APPEAR BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WITHIN ONE MONTH FROM THE RECEIP T OF THE ORDER FOR FIXING THE HEARING OF THE APPEAL. THE ASSESSEE IS FURTHER DIRECTED TO FILE ALL DETAILS AND EVIDENCES BEFORE THE LEARNED C OMMISSIONER OF INCOME TAX (APPEALS) AS AND WHEN CALLED UPON TO DO SO BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). THE LEARNED C OMMISSIONER OF INCOME TAX (APPEALS) IS ALSO DIRECTED TO DISPOSE OF THE APPEAL EXPEDITIOUSLY. WITH THESE DIRECTIONS THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING IN THE PRESENCE OF THE PARTIES ON 16TH DAY OF JULY, 2010. SD/- ( N.S. SAINI ) ACCOUNTANT MEMBER AHMEDABAD; ON THIS 16TH DAY OF JULY, 2010 5 PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPO NDENT 3. THE CIT CONCERNED 4.THE LD. CIT(APPEALS)-X X,ABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 19-7-10 ---------------- --- 2. DRAFT PLACED BEFORE AUTHORITY 19-7-10 ------- ------------ 3. DRAFT PROPOSED & PLACED JM BEFORE THE SECOND MEMBER 19-7-10 4. DRAFT DISCUSSED/APPROVED ------------------- JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 19-7-10 ---------- ---------- 6. KEPT FOR PRONOUNCEMENT ON ---------------- --- ----------------- 7. FILE SENT TO THE BENCH CLERK ---------------- - ------------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- --- ------------------