M/s T.D. Mukharjee and others, Ramgarh V. ACIT, Hazaribagh

ITA 63/RAN/2016

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9982 (ITAT-RANCHI)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 29-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY PAL
• Assessee Lawyers: S S AGARWAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI SMC BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 63 /RAN/2016 ASSESSMENT YEAR : 2010 - 2011 M/S. T.D. MUKHERJEE AND OTHERS, WBC, GHATOTAND, DIST: RAMGARH. VS. ACIT, CIRCLE - 2, HAZIRBAG PAN/GIR NO. AAAFT 6646 F (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.S.AGARWAL AR REVENUE BY : SHRI SANJAY PAL , DR DATE OF HEARING : 7 /12/ 2016 DATE OF PRONOUNCEMENT : 7 /12/ 2016 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) - HAZIRBAG , DATED 20.1.2016 , FOR THE ASSESSMENT YEAR 2010 - 2011 . 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.2,64,000/ - MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AS THE ASSESSEE FAILED TO DEDUCT TAX AT SOURCE FROM THE PAYMENTS MADE U/S.194 - I OF THE ACT. 2 ITA NO. 63 /RAN/2016 ASSESSMENT YEAR : 2010 - 2011 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS PAID HIRE CHARGES OF PLANT & MACHINERY AMOUNTING TO RS.9,07,962/ - OUT OF WHICH RS.2,64,000/ - WAS PAID TO GOPAL DEBNATH WITHOUT DEDUCTING TDS THEREFROM. HENCE, BY INVOKING THE PROVISIONS OF SECTION 40( A)(IA) OF THE ACT, HE DISALLOWED DEDUCTION OF RS.2,64,000/ - . 4. ON APPEAL, LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY FOLLOWING THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. CRESCENT EXPORT SYNDICATE, 216 TAXMAN 258 (CA L)OBSERVING THAT THE PROVISIONS OF SECTION 40(A)(IA) ARE APPLICABLE NOT ONLY TO THE AMOUNTS WHICH IS SHOWN AS PAYABLE AT ANY TIME DURING THE RELEVANT PREVIOUS YEAR AND WAS ACTUALLY PAID WITHIN THE PREVIOUS YEAR. 5. LD A.R. OF THE ASSESSEE SUBMITTED THAT A S WILL BE OBSERVED FROM THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS PAID RS.2,64,000/ - TO GOPAL DEBNATH DURING THE YEAR UNDER CONSIDERATION AS HIRE CHARGES TO PLANT AND MACHINERY ON VARIOUS DATES FROM 4.5.2009 TO 31.3.20 10. THUS, NO AMOUNT WAS OUTSTANDING AND PAYABLE AS AT THE END OF THE ACCOUNTING YEAR ENDING ON 31.3.2010. HENCE, IN VIEW OF THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VICTOR SHIPPING SERVICES (P) LTD., (2013) 357 ITR 642(ALL), NO DISALLOWANCE U/S.40(A)(IA) WAS WARRANTED IN THE CASE OF THE ASSESSEE. HE SUBMITTED THAT THE HONBLE HIGH COURT HAS HELD THAT FOR DISALLOWING 3 ITA NO. 63 /RAN/2016 ASSESSMENT YEAR : 2010 - 2011 EXPENSES FROM BUSINESS AND PROFESSION ON THE GROUND THAT TAX HAS NOT BEEN DEDUCTED AT SOURCE, THE AMOUNT SHOULD BE PAYABLE AND NOT IT HAS BEEN PAID BY THE END OF THE YEAR. HE FURTHER SUBMITTED THAT THE SLP FILED AGAINST THE JUDGMENT OF HONBLE ALLAHABAD H IGH COURT HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT VIDE JUDGMENT DATED 2.7.2014 IN CC NO.(S) 8068/2014. HE SUBMITTED THAT WHERE THERE ARE CONTRARY DECISIONS OF HONBLE HIGH COURTS ON AN ISSUE AND NONE OF WHICH IS HONBLE JURISDICTIONAL HIGH COURT, T HEN THE DECISION IN FAVOUR OF THE ASSESSEE SHOULD BE FOLLOWED IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS.VEGETABLE PRODUCTS LTD., 88 ITR 192 (SC). 6. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT THERE IS NO AMOUNTIN G OUTSTANDING AND PAYABLE AT THE END OF THE YEAR. THEREFORE, I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VICTOR SHIPPING SERVICES (P) LTD(SUPRA) DELETE THE DISALLOWANCE OF RS.2,64,000/ - MADE U/S.40(A)(IA) OF THE ACT. THIS GROUND IS ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 7 /12/2016 IN THE PRESENCE OF PARTIES. SD/ - (N.S SAINI) A CCOUNTANT MEMBER RANCHI ; DATED 7 /12 /2016 4 ITA NO. 63 /RAN/2016 ASSESSMENT YEAR : 2010 - 2011 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PS, ITAT, CAMP AT RANCHI 1. THE APPELLANT : M/S. T.D. MUKHERJEE AND OTHERS, WBC, GHATOTAND, DIST: RAMGARH. 2. THE RESPONDENT: ACIT, CIRCLE - 2, HAZIRBAG 3. THE CIT(A) HAZIRBAG 4. CIT , HAZIRBAG 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//