M/s. Balaji Builder, Ahmedabad V. The ACIT.,Circle-9, Ahmedabad

ITA 646/AHD/2010

• Counselvise Citation: 64620514 RSA 2010
• Duration Of Justice: 2 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 15-10-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 26-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A TINKEY
• Assessee Lawyers: VINEET MOONDRA
• Keywords: Reasonable cause

Judgement Text

, , , , D, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, D BENCH . .. . . .. . , !' !' !' !', , , , #$ #$ #$ #$ # ## #. .. .% %% % . .. .&'( &'( &'( &'(, , , , %) * %) * %) * %) * % ' % ' % ' % ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND A. K. GARODIA, ACCOUNTANT MEMBER) ITA NO.646/AHD/2010 [ASSTT.YEAR : 2007-2008] M/S.BALAJI BUILDER C/O. VINIT MOONDRA CHARTERED ACCOUNTANT 201, SARAP, OPP: NAVJIVAN PRESS ASHRAM ROAD, AHMEDABAD-14. PAN : AAGFB 8542 C /VS. ACIT, CIR.9 AHMEDABAD. ( (( (,- ,- ,- ,- / APPELLANT) ( (( (./,- ./,- ./,- ./,- / RESPONDENT) 01 2 3 %/ ASSESSEE BY : SHRI VINEET MOONDRA * 2 3 %/ REVENUE BY : SHRI A. TINKEY 5 2 16)/ DATE OF HEARING : 15 TH OCTOBER, 2012 7&8 2 16)/ DATE OF PRONOUNCEMENT : 02-11-2012 %9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL OF THE ASSESSEE FOR A.Y.2007-2008 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD DATED 25.1.2010. 2. THE EFFECTIVE GROUND OF THE APPEAL OF THE ASSESS EE IS AS UNDER: 1. THE LD.CIT(A) HAS ERRED BY UPHOLDING THE DISALL OWANCE U/S.40(A)(IA) OF RS.5,59,823/- MADE BY THE AO ON AC COUNT OF NON- DEDUCTION OF TDS ON INTEREST PAYMENTS. THE ASSESSE E HAS NOT DEDUCTED TDS ON INTEREST PAYMENTS TO 15 PARTIES AS THE ASSESSEE HAS RECEIVED FORM 15G AND 15H FROM THEM DUE TO WHIC H THEY WERE NOT SUPPOSED TO DEDUCT TDS. THE LD.CIT(A) HAS UPHE LD THE ADDITION ON THE GROUNDS THAT THE ASSESSEE HAS NOT D EPOSITED THE FORM 15G & 15H COLLECTED FROM THE 15 PERSONS WITH T HE CORRECT INCOME TAX DEPARTMENTAL AUTHORITIES. ACCORDING TO THE LD.CIT(A), THE FORMS SHOULD HAVE BEEN DEPOSITED WITH EITHER TH E CIT OR CCIT ITA NO.646/AHD/2010 -2- AS PER THE REQUIREMENTS OF RUE 29C(3) OF THE IT ACT . BUT AS THE ASSESSEE HAS DEPOSITED THE SAME WITH ITO (TDS), THE REQUIREMENT OF LAW IS NOT SATISFIED AND HENCE ADDITION NEEDS TO BE UPHELD. 3. THE LD. LEARNED COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE ASSESSEE HAS FILED FORM NO.15H WITHIN THE STATUTORY PERIOD O N 5.4.2007, AND THEREFORE THERE WAS NO VIOLATION OF THE STATUTORY P ROVISIONS OF LAW. HE SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF TH E ASSESSEE WITH THE DECISION OF THE ITAT, AHMEDABAD IN THE CASE OF ITO VS. ASHABHAI BABARBHAI PATEL & CO. DATED 10.12.2010 WHEREIN HELD THAT THE FORM 15G WAS SUBMITTED AND THAT WHETHER OR NOT THE FORM NO.1 5G SO OBTAINED WAS SENT TO CIT, BARODA TO COMPLY WITH SECTION 197A(2) DOES NOT CHANGE THIS POSITION. THE LEARNED DR HAS OPPOSED THE SUBMISSIO NS OF THE LEARNED COUNSEL OF THE ASSESSEE. HE SUBMITTED THAT IT WAS A STATUTORY REQUIREMENT AS PER THE LAW TO FILE THE FORM NO.15H WITH THE CIT AND FAILURE THEREOF WITHOUT ANY REASONABLE CAUSE JUSTIFY THE DISALLOWAN CE UNDER SECTION 40(A)(IA) OF THE ACT. HE RELIED ON THE ORDERS OF T HE AO AND THE CIT(A). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAVE PE RUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE ASSESSE E HAS FILED THE FORM NO.15H WITHIN FIVE DAYS FROM THE CLOSE OF THE ACCOU NTING PERIOD I.E. ON 5.4.2007 WITH THE ITO (TDS), AHMEDABAD. THE ISSUE I S COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE ITAT, AHME DABAD BENCH IN ITO VS. ASHABHAI BABARBHAI PATEL & CO., (SUPRA) WHEREIN HELD THAT DUE TO SUBMISSION OF FORM NO.15G, THE ASSESSEE WAS NOT REQ UIRED TO DEDUCT TDS FROM THE INTEREST PAYMENT FROM THE PARTY. WHET HER OR NOT FORM NO.15G WAS SENT TO CIT TO COMPLY WITH SECTION 197A( 2) DOES NOT CHANGE THIS POSITION, AND SINCE TAX WAS NOT DEDUCTIBLE FRO M THE INTEREST PAYMENT DUE TO SUBMISSIONS OF THE FORM NO.15G BY THE PARTY, THE DISALLOWANCE UNDER SECTION 40(A)(IA) COULD NOT BE MADE. THE RAT IO OF THIS DECISION ITA NO.646/AHD/2010 -3- CLEARLY APPLIES TO THE FACTS OF THE CASE OF THE ASS ESSEE AND DUE TO SUBMISSION OF FORM NO.15H IN TIME, THERE WAS NO REQ UIREMENT OF DEDUCTING TAX AT SOURCE FROM THE INTEREST PAYMENT M ADE BY THE ASSESSEE. WE BEING IN AGREEMENT WITH THE DECISION OF THE CO-O RDINATE BENCH OF THE ITAT, AHMEDABAD IN ASHABHAI BARBARBHAI PATEL & CO., (SUPRA) HOLD THAT THAT THE DISALLOWANCE UNDER SECTION 40(A)(IA) COULD NOT BE MADE IN THIS CASE, AND ACCORDINGLY THE GROUND OF THE APPEALS OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( # ## #. .. .% %% % . .. .&'( &'( &'( &'( /A.K. GARODIA) %) * /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT VK* C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD