ACIT, CHENNAI V. M/s. L.M.S.GANI Mohamed, CHENNAI

ITA 621/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61170 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 23-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAMADITYA IRS
• Assessee Lawyers: G BASKAR
• Keywords: Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI V.DURGA RAO, JUDICIAL MEMBER ITA NO.621(MDS)/2012 ASSESSMENT YEAR: 2008-09 THE ASSISTANT COMMISSIONER OF INCOME-TAX, BUSINESS CIRCLE XI, CHENNAI. VS. M/S. LMS GANI MOHAMED & CO., 5/2, MACFARE LANE, SAMI STREET, PERIAMET, CHENNAI-600 003. PAN AAAFL1458M. (APPELLANT) (RESPONDENT) AND ITA NO.194(MDS)/2012 ASSESSMENT YEAR : 2008-09 M/S.LMS GANI MOHAMED THE ASSISTANT COMMISSIONER & CO., 5/2, MACFARE LANE, VS. OF INCOME-T AX, SAMI STREET, PERIAMET, BUSINES S CIRCLE XI, CHENNAI-600 003. CHENN AI. (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI VIKRAMADITYA, IRS, JCI T ASSESSEE BY : SHRI G.BASKAR, ADVOCATE DATE OF HEARING : 24 TH MAY, 2012 DATE OF PRONOUNCEMENT : 24 TH MAY, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE PRESIDENT THE APPEAL IN ITA NO.621(MDS)/2012 IS FILED BY TH E REVENUE AND THE APPEAL IN ITA NO.194(MDS)/2012 IS F ILED BY THE - - ITA 621 &194 OF 2012 2 ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2008-09. THE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER OF THE COMMI SSIONER OF INCOME-TAX(APPEALS)-IV AT CHENNAI, DATED 5-12-2011 AND ARISE OUT OF THE ASSESSMENT COMPLETED UNDER SECTION 143(3 ) OF THE INCOME-TAX ACT,1961. 2. THE FIRST GROUND RAISED BY THE REVENUE IN ITS A PPEAL IS THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN DELETING THE DISALLOWANCE OF ` 2.57 CRORES MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(IA) OF THE AC T FOR NOT DEDUCTING TAX ON JOB WORK CHARGES. THE COMMISSIONE R OF INCOME-TAX(APPEALS) HAS MADE A DEFINITE FINDING THA T THE PAYMENTS WERE NOT MADE BY THE ASSESSEE TO ANY OUTSI DER. THESE ARE ALL TRANSACTIONS BETWEEN THE HEAD OFFICE AND THE BRANCH OFFICE OF THE ASSESSEE ITSELF. THEREFORE, T HERE IS NO PAYER AND PAYEE FOR THE PURPOSE OF INCOME-TAX ACT. THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS RIGHTLY DEL ETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 3. THE NEXT GROUND RAISED BY THE REVENUE IS AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS ) DELETING THE ADDITION OF ` 1.23 CRORES MADE BY THE ASSESSING OFFICER BY - - ITA 621 &194 OF 2012 3 DISALLOWING THE CLAIM OF BAD DEBTS MADE BY THE ASSE SSEE. AS RIGHTLY POINTED OUT BY THE COMMISSIONER OF INCOME-T AX(APPEALS), THE ISSUE IS COVERED BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TRF LIMITED VS CIT, 323 ITR 39 7. 4. THE APPEAL FILED BY THE REVENUE IS, THEREFORE, LIABLE TO BE DISMISSED. 5. IN THE APPEAL FILED BY THE ASSESSEE THE QUESTIO N IS REGARDING THE DISALLOWANCE MADE UNDER SECTION 40(A) (IA) FOR THE REASON OF NOT DEDUCTING TAX AT SOURCE. IN THIS CAS E IT IS TO BE SEEN THAT TO WHAT EXTENT THE DUES HAVE BEEN PAID BY THE ASSESSEE AND REMAINED PAYABLE BY THE END OF THE PRE VIOUS YEAR. ONCE THESE DETAILS ARE LOOKED INTO, THE ASSESSING O FFICER HAS TO DECIDE THE ISSUE IN THE LIGHT OF THE SPECIAL BENCH DECISION OF THE INCOME-TAX APPELLATE TRIBUNAL, VISAKHAPATNAM, IN TH E CASE OF MERILYN SHIPPING & TRANSPORTS VS. ACIT, REPORTED IN 70 DTR (VISAKHA)(SB)(TRIB) 81. THIS MATTER IS, THEREFORE, REMITTED BACK TO THE ASSESSING OFFICER TO DECIDE AFRESH AS INDICA TED ABOVE. 6. IN RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED AND THE APPEAL FILED BY THE ASSESSEE IS T REATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. - - ITA 621 &194 OF 2012 4 ORDERS PRONOUNCED IN THE OPEN COURT AT THE TIME O F HEARING ON THURSDAY, THE 24 TH OF MAY, 2012 AT CHENNAI. SD/- SD/- (V.DURGA RAO) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 24 TH MAY, 2012. V.A.P. COPY TO: 1. ASSESSEE 2. DEPARTMENT 3. CIT 4. CIT(A) 5. DR 6. GF.