Arumugam Aravendhan, Coimbatore V. ITO, Coimbatore

ITA 595/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9613 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 28-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 24-03-2015
• Court: TRIBUNAL
• Department Lawyers: PATHLAVATH PEERYACIT
• Assessee Lawyers: S SRIDHAR
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , ! ' #! ' $ . %& ' () BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.595 /MDS./2015 ( / ASSESSMENT YEAR :2010-11) SHRI ARUMUNGAM ARAVENDHAN , 185,KRIUBHA COMPLEX, D B ROAD, R.S.PURAM, COIMBATORE. VS. THE INCOME TAX OFFICER, WARD NO.II(3), COIMBATORE. PAN AJFPS 2384 K ( *+ / APPELLANT ) ( ,-*+ / RESPONDENT ) / APPELLANT BY : MR.S.SRIDHAR,ADVOCATE / RESPONDENT BY : MR.PATHLAVATH PEERYA,CIT, D.R / DATE OF HEARING : 28.03.2016 /DATE OF PRONOUNCEMENT : 06.04.2016 ITA NO.595/MDS/2015 2 . / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)- I, COIMBATORE DATED 11.03.2015 PERTAINING TO THE ASSESSMENT YEAR 2010-11. 2. THE ASSESSEE MADE A PAYMENT OF ` 20,90,580/-TOWARDS ROYALTY FEES PAID TO T.I.M.E (M/S.TRIUMPHANT INSTITUTE OF M ANAGEMENT EDUCATION PVT LTD.,). SINCE THERE WAS NO DEDUCTION OF TDS U/S.194J(1) OF THE ACT, THE CIT DIRECTED THE AO TO DISALLOW THE SAME IN VIEW OF THE SEC.40(A)(IA) OF THE ACT. AGAINST T HIS, THE ASSESSEE IS IN APPEAL BEFORE US. 3. LD.A.R SUBMITTED THAT THE TURNOVER OF THE ASSES SEE FOR THE PRECEDING FINANCIAL YEAR TO THE PRESENT FINANCIAL Y EAR I.E F.Y 2008-09 IS LESSER THAN THE TURNOVER LIABLE FOR AUDIT U/S.44 AB OF THE ACT, AS SUCH PROVISIONS OF THE SECTION 194J IS NOT APPLICAB LE. FURTHER, HE SUBMITTED THAT AS PER PROVISO TO SEC.40(A)(IA) OF T HE ACT, THE AMOUNT WAS ALREADY PAID AND IT IS NOT OUTSTANDING AT THE C LOSE OF THE FINANCIAL YEAR I.E. 31.03.2010, THE AMOUNT CANNOT BE DISALLO WED U/S.40(A)(IA) ITA NO.595/MDS/2015 3 OF THE ACT WITHOUT PREJUDICE TO THE ABOVE. HE SUBM ITTED THAT THE RECIPIENT OF THE ABOVE ROYALTY BY T.I.M.E HAS ALREA DY PAID TAX ON IT. THERE IS NO REVENUE LOSS TO THE DEPARTMENT AND CIT IS NOT JUSTIFIED IN INVOKING THE PROVISIONS OF THE SECTION 263 OF THE A CT. ON THE OTHER HAND, LD.D.R RELIED ON THE ORDER OF CIT. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY AS PER PROVISIONS OF THE SECTIO N 194J OF THE ACT, ASSESSEE WHENEVER MAKES PAYMENT TOWARDS ROYALTY, HE HAS REQUIRED TO DEDUCT TDS FROM THE SUM SUBJECT TO CERTAIN PROVI SO AMENDED TO THAT SECTION. IN THE PRESENT CASE, THE ASSESSEE TO OK A PLEA, WHICH IS NOT PLACED BEFORE THE LOWER AUTHORITIES. FURTHER, THE ASSESSEE WAS NOT BROUGHT ON RECORD THE TURNOVER OF THE ASSESSEE FOR THE FINANCIAL YEAR 2008-09 TO APPLY THE PROVISO TO SEC.194J OF TH E ACT. THE ASSESSEE IS ALSO NOT BROUGHT ON RECORD WHETHER THE AMOUNT WAS ACTUALLY PAID AT THE END OF THE CLOSE OF THE FINANC IAL YEAR OR THE RECIPIENT HAS PAID THE TAX ON THE SAID AMOUNT. HEN CE, CONFIRMING THE INVOKING THE PROVISIONS OF THE SECTION 263 OF THE A CT, WE ARE INCLINED TO MODIFY THE DIRECTION OF THE LD.CIT THAT THE ISSU E IS REMITTED BACK TO ITA NO.595/MDS/2015 4 THE FILE OF LD. ASSESSING OFFICER WITH A DIRECTION TO RE-EXAMINE THE ISSUE IN THE LIGHT OF OUR OBSERVATIONS HEREINABOVE. 5. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 6 TH OF APRIL, 2016 AT CHENNAI. SD/- SD/- ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) ( ( () * + ) ) ! CHANDRA POOJARI ', JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 6 TH APRIL,2016 . K S SUNDARAM. -.,, /0,10 /COPY TO: , 1. /APPELLANT 2. /RESPONDENT 3. , 2,!' /CIT(A) 4. , 2 /CIT 5. 034, 5 /DR 6. 4&,6 /GF