The ITO, Ward-1(1), RAJKOT-GUJARAT V. M/s. Dholu KCL JPF JV Company, RAJKOT-GUJARAT

ITA 605/RJT/2012

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0431 (ITAT-RAJKOT)
• Duration Of Justice: 6 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 07-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DM RINDANI
• Section: 40(a)(ia)

Judgement Text

ITO WD-1(1) RAJKOT V. DHOLU KCL JPF JV COMPANY I.T.A. NO.605 /RJT/2012/A.Y.06-07 PAGE 1 OF 6 INCOM TAX APPELLATE TRIBUNAL-RAJKOT-BENCH-RAJKOT BEFORE C .M. GARG, JUDICIAL MEMBER AND O. P. MEENA, ACCOUNTANT MEMBER I.T.A NO.605 /RJT/2012 ASSESSMENT YEAR:2006-07 APPELLANT V. RESPONDENT INCOME TAX OFFICER, WARD-1(1) RAJKOT M/S. DHOLU KCL JPF JV COMPANY , KCL AMIN MARG 150FT RING ROAD RAJKOT PAN:AAEFD2105K ASSESSEE BY SHRI D.M. RINDANI , CA REVENUE BY SHRI JITENDER KUMAR, CIT(D.R.) DATE OF HEARING 27.11.2018 DATE OF PRONOUNCEMENT 28.11.2018 ORDER PER O. P. MEENA, AM 1. THIS APPEAL AT THE INSTANCE OF THE REVENUE IS DIRECTED AGAINST AN ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, RAJKOT [IN SHORT CIT(A)] DATED 29.08.2012 FOR THE ASSESSMENT YEAR 2006-07. 2. GROUND NO. 1 STATES THAT LD. CIT (A) ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF RS. 13,34,17,238 MADE ON ACCOUNT OF SHORT DEDUCTION OF TDS ON PAYMENT MADE TO SUB-CONTRACTOR. ITO WD-1(1) RAJKOT V. DHOLU KCL JPF JV COMPANY I.T.A. NO.605 /RJT/2012/A.Y.06-07 PAGE 2 OF 6 3. THE AO NOTED THAT THE SUB-CONTRACTS PAYMENTS OF RS. 17,85,31,852 WERE MADE TO M/S. KETAN CONSTRUCTION COMPANY ON WHICH TDS WAS REQUIRED TO BE MADE @ 1.122%. HOWEVER, THE ASSESSEE HAS MADE TDS @ 0.281% . THEREFORE, THE AO HAS DISALLOWED RS. 13,34,17,238. 4. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT (A). THE LD. CIT (A) HAS DELETED THE DISALLOWANCE ON THE GROUND THAT PROVISIONS OF SECTION 40(A)(IA) ARE APPLICABLE TO NON DEDUCTION OF TAX AND NOT ON SHORT DEDUCTION OF TAX AS HELD BY THE TRIBUNAL IN THE CASE OF DCIT V. S.K. TEKRIWAL[ I.T.A.NO. 1135/KOL/2010 DTD. 21.10.2011 , DCIT V. M/S. CHANDABHOY & JASSOBHOY [I.T.A.NO. 20/MUM/2010 DTD. 08.07.2010] AND SHRI NAREDDRA JATIYA [I.T.A.NO. 119/RJT/2001 DTD. 20.01.2012] 5. BEING AGGRIEVED, THE REVENUE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LD. CIT (DR) RELIED ON THE ORDER OF THE AO. 6. PER CONTRA, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THE ASSESSEE HAS OBTAINED A LOWER DEDUCTION CERTIFICATE FROM THE DEPARTMENT VIDE CERTIFICATE DTD. 12.05.2005 (PB-1) WHEREBY DEPARTMENT HAS EXPLICITLY ITO WD-1(1) RAJKOT V. DHOLU KCL JPF JV COMPANY I.T.A. NO.605 /RJT/2012/A.Y.06-07 PAGE 3 OF 6 AUTHORIZED THE ASSESSEE TO DEDUCT TDS @ .25% WHEN PAYING ANY AMOUNT TO KETAN CONSTRUCTION. THIS CERTIFICATE WAS VALID UP TO 31.03.2006. THE AO HAS REJECTED THE CERTIFICATE ON THE GROUND OF ADDRESS AT RAJKOT OR AHMEDABAD. THE CERTIFICATE WAS ISSUED ON THE ADDRESS AT AHMEDABAD WHICH IS SAME AS STATED IN INTIMATION UNDER SECTION 143(1) OF THE ACT FOR THE SAME ASSESSMENT YEAR. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER, PLACED RELIANCE ON THE DECISION AS RELIED BY THE LD. CIT (A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAS OBTAINED SHORT DEDUCTION CERTIFICATE WHICH WAS EFFECTIVE DURING THE YEAR UNDER CONSIDERATION HENCE, THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS ON HIGHER RATE. FURTHER, DISALLOWANCE UNDER SECTION 40(A)(IA) ARE APPLICABLE TO NON DEDUCTION OF TAX AND NOT ON SHORT DEDUCTION OF TAX AS HELD BY TRIBUNAL IN CASE OF DCIT V. S.K. TEKRIWAL[ I.T.A.NO. 1135/KOL/2010 DTD. 21.10.2011 , DCIT V. M/S. CHANDABHOY & JASSOBHOY [I.T.A.NO. 20/MUM/2010 DTD. 08.07.2010] AND SHRI NAREDDRA JATIYA [I.T.A.NO. 119/RJT/2001 DTD. 20.01.2012]. IN VIEW OF THIS ITO WD-1(1) RAJKOT V. DHOLU KCL JPF JV COMPANY I.T.A. NO.605 /RJT/2012/A.Y.06-07 PAGE 4 OF 6 MATTER, WE HAVE NO REASON TO DEVIATE WITH THE FINDING RECORDED BY THE LD. CIT (A) . ACCORDINGLY, SAME UPHELD. EX- CONSEQUENTI, GROUND NO. 1 OF APPEAL IS DISMISSED. 8. GROUND NO. 2 STATED THAT CIT (A) ERRED IN DELETING ADDITION OF RS. 4,28,66,456 ON ACCOUNT OF LATE DEPOSIT OF TDS IN GOVERNMENT ACCOUNT IF PAYMENT IS MADE BEFORE DUE DATE OF FILING OF RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT. 9. THE AO DISALLOWED THE PAYMENT OF RS. 4,28,66,456 AS TDS ON THE SAME WAS MADE BUT DEPOSITED LATE IN GOVERNMENT ACCOUNT . IT WAS NOTICED THAT TDS OF RS. 34,91,766 WAS DEDUCTED UP TO FEBRUARY 2006 WHICH WAS REQUIRED TO BE DEPOSITED BY 31.03.2006 . HOWEVER, AN AMOUNT OF RS. 30,14,766 WAS DEPOSITED IN GOVERNMENT ACCOUNT ON 31.03.2006 AND REMAINING AMOUNT OF RS. 4,76,675 WAS NOT DEPOSITED WITHIN TIME ALLOWED. 10. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT (A). THE LD. CIT (A) HAS DIRECTED THE AO TO VERIFY WHETHER THE ASSESSEE HAS PAID THE SAID TDS WITHIN DUE DATE UNDER SECTION 139(1) OF THE ACT AND AFTER RELYING ON THE ITO WD-1(1) RAJKOT V. DHOLU KCL JPF JV COMPANY I.T.A. NO.605 /RJT/2012/A.Y.06-07 PAGE 5 OF 6 DECISION IN THE CASE OF CIT V. VIRGIN CREATIONS IN I.T.A.NO. 302 OF HON`BLE CALCUTTA HIGH COURT HAS DELETED THE ADDITION. 11. BEING AGGRIEVED, THE REVENUE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LD. CIT (DR) RELIED ON THE ORDER OF THE AO. 12. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT TDS WAS DEPOSITED WITHIN DUE DATE OF FILING OF RETURN OF INCOME UNDER SECTION 139(1) HENCE, NO DISALLOWANCE UNDER SECTION 40(A)(IA) CAN BE MADE AS HELD BY HON`BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. PATEL RAMNIKLAL HIRJI (GUJARAT) TAX APPEAL NO. 605 OF 2011 DTD.23.08.2012 AND ITO WARD 5(3) BARODA V. SUN ENTERPRISE [TAX APPEAL NO. 1454 OF 2011 DTD. 18.09.2012 OF GUJARAT HIGH COURT. [ COPY FILED] 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY DECISION OF HON`BLE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF CIT V. PATEL RAMNIKLAL HIRJI (GUJARAT) TAX APPEAL NO. 605 OF 2011 DTD.23.08.2012 AND ITO WARD 5(3) BARODA V. SUN ENTERPRISE [TAX APPEAL NO. 1454 ITO WD-1(1) RAJKOT V. DHOLU KCL JPF JV COMPANY I.T.A. NO.605 /RJT/2012/A.Y.06-07 PAGE 6 OF 6 OF 2011 DTD. 18.09.2012 OF GUJARAT HIGH COURT. [ COPY FILED] WHEREIN IT WAS HELD THAT DUE TO AMENDMENT IN SECTION 40(A)(IA) BY FINANCE ACT, 2008 WITH EFFECT FROM 1.4.2005, TIME FOR PAYMENT WAS EXTENDED UP TO DUE DATE OF FILING OF RETURN OF INCOME SPECIFIED IN SECTION 139(1) OF THE ACT. THEREFORE, NO DISALLOWANCE UNDER SECTION 40(A)(IA) IS CALLED FOR IF THE TDS DEPOSITED WITHIN DUE DATE OF FILING OF RETURN OF INCOME UNDER SECTION 139(1)OF THE ACT. IN VIEW OF THIS MATTER, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT (A), ACCORDINGLY, SAME IS UPHELD. THIS GROUNDS OF APPEAL IS DISMISSED. 14. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 15. THE ORDER PRONOUNCED IN THE OPEN COURT ON 28.11.2018. SD/- SD/- ( C.M. GARG) (O. P. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT: DATED: 28.11.2018. COPY OF ORDER SENT TO - ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, RAJKOT