Atreyapurapu Swarna Lakshmi, Visakhapatnam V. THE DCIT, CENTRAL CIRCLE, Vijayawada

ITA 656/VIZ/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2159 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-11-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 06-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G GURUSWAMY
• Keywords: Search and seizure; Validity of assessment; Condonation of delay
• Section: 153A; 194C

Judgement Text

ITA NOS.655,656/VIZAG/2013 & ITA NO.1/VIZAG/2014 SMT. A SWARNA LAKSHMI, VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , ' BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.655&656/VIZAG/2013 & ITA NO.1/VIZAG/2014 ( / ASSESSMENT YEARS : 2008-09, 2010-11 & 2007-08 RESPECTIVELY) SMT. A. SWARNA LAKSHMI VISAKHAPATNAM VS. DCIT , CENTRAL CIRCLE , VIJAYAWADA [ PAN: ADBPA 3951G] ( ) / APPELLANT) ( *+) / RESPONDENT ) - . / APPELLANT BY : SHRI I. KAMASASTRY, AR 12- . / RESPONDENT BY : SHRI G. GURUSWAMY, DR . 6 / DATE OF HEARING : 06.01.2016 . 6 / DATE OF PRONOUNCEMENT : 22.01.2016 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED A GAINST SEPARATE, BUT IDENTICAL ORDERS OF CIT(A), GUNTUR AND IT PERTA INS TO THE ASSESSMENT YEAR 2007-08, 2008-09 & 2010-11. SINCE, THE ISSUES INVOLVED IN THESE ITA NOS.655,656/VIZAG/2013 & ITA NO.1/VIZAG/2014 SMT. A SWARNA LAKSHMI, VISAKHAPATNAM 2 APPEALS ARE COMMON, THEY ARE CLUBBED, HEARD TOGETHE R AND DISPOSED OFF BY WAY OF COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.655/VIZAG/2013 : 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-0 9 ON 29.9.2008 DECLARING TOTAL INCOME OF RS.20,96,140/-. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN THE GROUP CASES OF M/S. MAHA MARUTHI LOGISTICS PVT. LTD., GROUP OF CASES, VISAKHAPATNAM ON 4.2.2010. CONSEQUENT TO THE SEARCH, THE ASSESSEES CASE WAS N OTIFIED TO CENTRAL CIRCLE VIDE NOTIFICATION NO.F.NO.CIT(C)/CR/VSP/CENT RALIZATION/2010-11 DATED 18.2.2011. CONSEQUENT TO THE SEARCH, NOTICE U/S 153A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED AS THE AC T) DATED 29.12.2010 WAS ISSUED TO THE ASSESSEE CALLING FOR RETURN OF IN COME FOR THE ASSESSMENT YEAR 2008-09. IN RESPONSE TO NOTICE, TH E ASSESSEE FILED HER RETURN OF INCOME ON 14.2.2011 DECLARING TOTAL INCOM E OF RS.20,96,140/-. THE CASE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY NOTICE U/S 143(2) OF THE ACT DATED 16.6.2011 WAS ISSUED. IN RESPONSE TO NOTICE, THE ASSESSEES AUTHORIZED REPRESENTATIVE APPEARED FROM TIME TO TIME AND FILED INFORMATION CALLED FOR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS ADMITTED SHORT ITA NOS.655,656/VIZAG/2013 & ITA NO.1/VIZAG/2014 SMT. A SWARNA LAKSHMI, VISAKHAPATNAM 3 RECEIPTS OF RS.25,53,769/-.THEREFORE, ISSUED A SHOW CAUSE NOTICE AND ASKED TO EXPLAIN WHY THE SAME SHOULD NOT BE TREATED AS INCOME OF THE ASSESSEE. IN REPLY, THE ASSESSEE SUBMITTED THAT TH E EXCESS TURNOVER QUANTIFIED BY YOU IS BECAUSE OF THE DIFFERENCE BETW EEN THE TURNOVER ACCOUNTED IN THE BOOKS OF ACCOUNTS AND TURNOVER AS PER THE TDS CERTIFICATES. THE ASSESSEE FURTHER SUBMITTED THAT THE EXCESS TURNOVER REPRESENTS THE ADVANCE RECEIVED FROM THE PARTIES, O N WHICH THE PARTIES HAVE DEDUCTED TDS AS PER THE LAW. BUT, THE ASSESSE E IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, WHEREIN SHE IS ACC OUNTING INCOME ON ACCRUAL BASIS AS AND WHEN THE BILL IS SUBMITTED TO THE PARTIES. THEREFORE, NOT RECOGNIZED ADVANCE RECEIVED AS INCOM E OF THE YEAR. HOWEVER, THE SAME IS ACCOUNTED IN SUBSEQUENT YEAR. TO THIS EFFECT FILED A RECONCILIATION STATEMENT BEFORE THE ASSESSING OFF ICER. THE A.O. AFTER VERIFICATION OF THE DETAILS FURNISHED BY THE ASSESS EE HELD THAT THE ASSESSEE HAS NOT OFFERED ANY SATISFACTORY EXPLANATI ONS FOR SHORT ADMISSION OF RECEIPTS TO THE EXTENT OF RS.25,53,769 /-, THEREFORE, THE DIFFERENCE IS ADDED TO THE INCOME OF THE ASSESSEE. 3. SIMILARLY, THE A.O. NOTICED THAT THE ASSESSEE HA S DEBITED VARIOUS EXPENDITURES, ON WHICH TDS PROVISIONS ARE ATTRACTED , THEREFORE, ASKED TO FURNISH WHETHER TDS HAS BEEN DEDUCTED WHEREVER APPL ICABLE. IN REPLY, ITA NOS.655,656/VIZAG/2013 & ITA NO.1/VIZAG/2014 SMT. A SWARNA LAKSHMI, VISAKHAPATNAM 4 THE ASSESSEE SUBMITTED THAT AS FAR AS ADVERTISEMENT CHARGES IS CONCERNED, THESE EXPENSES ARE ACTUALLY INCURRED TOW ARDS DAILY ALLOWANCES PAID TO DRIVERS, TRIP EXPENSES, OIL AND LUBRICANTS PURCHASED FOR THE VEHICLE. THE ASSESSEE FURTHER SUBMITTED TH AT THE INDIVIDUAL PAYMENTS AND THE AGGREGATE OF SUCH PAYMENTS DOES NO T EXCEED THE SPECIFIED LIMIT AS PER SECTION 194C OF THE ACT, THE REFORE, TDS HAS NOT BEEN DEDUCTED ON SUCH PAYMENTS. THE ASSESSEE FURTH ER SUBMITTED THAT THE EXPENDITURE INCURRED UNDER THESE HEADS HAS BEEN ALREADY PAID DURING THE SAME FINANCIAL YEAR AND NOTHING IS OUTST ANDING AT THE END OF THE BALANCE SHEET DATE. THEREFORE, IN VIEW OF THE SPECIAL BENCH DECISION OF ITAT, VISAKHAPATNAM IN THE CASE OF M/S. MERILYN SHIPPING AND TRANSPORTS VS. ACIT IN ITA NO.477/VIZAG/2008 DATED 29.3.2012 NO DISALLOWANCE CAN BE MADE FOR THE AMOUNTS PAID DURIN G THE FINANCIAL YEAR. THE A.O. AFTER CONSIDERING THE EXPLANATIONS OF THE ASSESSEE DISALLOWED THE AMOUNT U/S 40(A)(IA) OF THE ACT. 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) THE AS SESSEE REITERATED THE ARGUMENTS TAKEN BEFORE THE A.O. THE ASSESSEE FURTH ER SUBMITTED THAT THE DIFFERENCE IN TURNOVER QUANTIFIED BY THE A.O. B ASED ON THE BOOKS OF ACCOUNTS AND TDS CERTIFICATES IS ARISED BECAUSE OF THE ADVANCE RECEIVED ITA NOS.655,656/VIZAG/2013 & ITA NO.1/VIZAG/2014 SMT. A SWARNA LAKSHMI, VISAKHAPATNAM 5 FROM THE CUSTOMERS ON WHICH THEY HAVE DEDUCTED TDS AS PER PROVISIONS OF SECTION 194C OF THE ACT. HOWEVER, THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, WHEREIN SHE IS ACC OUNTING INCOME ON ACCRUAL BASIS AS AND WHEN THE BILL IS SUBMITTED AND ADVANCE FROM CUSTOMER HAS BEEN RECOGNIZED AS INCOME IN THE YEAR IN WHICH BILL IS RAISED. TO THIS EFFECT FURNISHED PARTYWISE RECONCI LIATION STATEMENT, EXPLAINING THE REASONS FOR DIFFERENCE. SIMILARLY, AS FAR AS THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT IS CONCERNED, THE ASSESSEE CONTENDED THAT THE AMOUNTS INCURRED UNDER THESE HEA DS HAS BEEN ALREADY PAID DURING THE SAME FINANCIAL YEAR AND NOT HING IS PAYABLE AT THE END OF THE BALANCE SHEET DATE. THEREFORE, NO D ISALLOWANCE CAN BE MADE U/S 40(A)(IA) OF THE ACT AS HELD BY THE ITAT, VISAKHAPATNAM BENCH IN THE CASE OF M/S. MERILYN SHIPPING & TRANSP ORTS (SUPRA). HOWEVER, THE CIT AFTER CONSIDERING THE EXPLANATIONS OFFERED BY THE ASSESSEE PARTLY ALLOWED THE APPEAL FILED BY THE ASS ESSEE. WHILE DOING SO, THE CIT(A) OBSERVED THAT AS FAR AS THE DIFFEREN CE IN TURNOVER IS CONCERNED, OUT OF THE ADDITIONS OF RS.25,53,769/- A N AMOUNT OF RS.15,41,279/- HAS BEEN DELETED AND THE BALANCE AMO UNT OF RS.10,12,490/- HAS BEEN SUSTAINED. SIMILARLY, THE CIT(A) DELETED THE ADDITIONS UNDER THE HEAD TRANSPORT CHARGES AMOUNTIN G TO RS.9,03,936/-, AMOUNT PAID TO A. RAVI PRASAD AMOUNTING TO RS.3 LAK HS, U/S 40(A)(IA) OF ITA NOS.655,656/VIZAG/2013 & ITA NO.1/VIZAG/2014 SMT. A SWARNA LAKSHMI, VISAKHAPATNAM 6 THE ACT AND CONFIRMED THE ADDITIONS MADE UNDER THE HEAD ADVERTISEMENT CHARGES AND FINANCE CHARGES. 5. AGGRIEVED BY THE CIT(A) ORDER, THE ASSESSEE IS I N APPEAL BEFORE US AND RAISED THE FOLLOWING GROUNDS: 1. THE LD. CIT(A) IS NOT AT ALL CORRECT IN UPHOLDING T HE ASSESSMENT EVEN THOUGH THE ASSESSMENT IS NOT PENDING AS ON THE DATE OF SEARCH AND NONE OF THE ADDITIONS TO THE RETURNED INCOME ARE BASED ANY INCRIMINATING MATERIAL. 2. THE LD. CIT(A) IS NOT CORRECT IN UPHOLDING THE VALI DITY OF THE ASSESSMENT EVEN THOUGH OPPORTUNITY / OF HEARING HAS NOT BE AFFORDED TO THE ASSESSEE BY THE ADDITIONAL CIT BEFORE GRANTING APPROVAL TO THE ASSE SSMENT ORDER. 3. THE LD. CIT(A) IS NOT CORRECT IN UPHOLDING THE ADDI TION OF RS.10,12,419 ON ACCOUNT OF SUPPRESSED/UNACCOUNTED TURNOVER. 4. THE LD. CIT(A) IS NOT CORRECT IN UPHOLDING THE ADDI TIONS MADE BY THE AO UNDER SECTION 40(A)(IA) WITH RESPECT TO THE FOLLOWING AMO UNTS: I. ADVERTISEMENTS - RS.6,96,040. II. FINANCIAL CHARGES - RS.5,29,800. 5. THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR ALTE R ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL. ALL THE GROUNDS OF APPEAL ARE WI THOUT PREJUDICE TO EACH OTHER. 6. FROM GROUND NOS.1&2, THE ASSESSEE HAS CHALLENGED THE VALIDITY OF ASSESSMENT PROCEEDINGS. DURING THE COURSE OF HEARI NG, THE A.R. OF THE ASSESSEE DID NOT PRESS THE GROUND NOS.1&2, CHALLENG ING THE VALIDITY OF THE ASSESSMENT. THEREFORE, GROUND NOS.1 & 2 ARE DI SMISSED AS NOT PRESSED. ITA NOS.655,656/VIZAG/2013 & ITA NO.1/VIZAG/2014 SMT. A SWARNA LAKSHMI, VISAKHAPATNAM 7 7. THE NEXT ISSUE CAME UP FOR OUR CONSIDERATION, IS THE ADDITION OF RS.10,12,490/- ON ACCOUNT OF SUPPRESSED/UNACCOUNTED TURNOVER. THE LD. A.R. SUBMITTED THAT THE UNACCOUNTED TURNOVER QU ANTIFIED BY THE A.O. IS ON ACCOUNT OF ADVANCE RECEIVED BY THE ASSESSEE F ROM THE CUSTOMERS ON WHICH THEY HAVE DEDUCTED TDS U/S 194C OF THE ACT . THE A.O. ARRIVED AT THE DIFFERENCE BETWEEN THE BOOKS OF ACCOUNTS AND TDS CERTIFICATES. THE A.R. FURTHER SUBMITTED THAT THE ASSESSEE HAS FI LED A RECONCILIATION STATEMENT WHEREIN SHE HAS EXPLAINED THE REASONS FOR THE DIFFERENCE AND CONTENDED THAT THE DIFFERENCE IS MAINLY ON ACCOUNT OF ADVANCE FROM CUSTOMERS WHICH WAS NOT RECOGNIZED AS INCOME OF THE YEAR. THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTI NG WHEREIN SHE IS ACCOUNTING ALL INCOME AND EXPENDITURE ON ACCRUAL BA SIS. THE DIFFERENCE REPRESENTS ADVANCE, RECEIVED FROM CUSTOMERS WHICH W AS ACCOUNTED IN SUBSEQUENT YEARS. THEREFORE, THE SAME CANNOT BE CO NSIDERED AS INCOME FOR THE YEAR. ON THE OTHER HAND, LD. D.R. STRONGLY SUPPORTED THE ORDER OF THE CIT(A). 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE A.O. MADE THE ADDITIONS TOWARDS SUPPRESSED/UNACCOUN TED TURNOVER BASED ON DIFFERENCE BETWEEN BOOKS OF ACCOUNTS AND T DS CERTIFICATES. IT ITA NOS.655,656/VIZAG/2013 & ITA NO.1/VIZAG/2014 SMT. A SWARNA LAKSHMI, VISAKHAPATNAM 8 WAS THE CONTENTION OF THE ASSESSEE THAT THE DIFFERE NCE IS MAINLY ON ACCOUNT OF ADVANCE RECEIVED FROM THE CUSTOMERS WHIC H WAS NOT RECOGNIZED AS INCOME FOR THE YEAR. THE ASSESSEE FU RTHER SUBMITTED THAT IT IS THE USUAL PRACTICE THAT THE CUSTOMERS HAVE PA ID ADVANCE AND DEDUCT TDS ON SUCH ADVANCES. THE ASSESSEE IS FOLLOWING ME RCANTILE SYSTEM OF ACCOUNTING WHEREIN SHE IS ACCOUNTING ALL RECEIPTS A ND EXPENDITURE ON ACCRUAL BASIS AS AND WHEN BILL IS RAISED. THE ASS ESSEE HAS ACCOUNTED ALL THE RECEIPTS AND RECONCILED THE TDS CERTIFICATE TO THE BOOKS OF ACCOUNTS AND EXPLAINED THE REASONS FOR THE DIFFERENCE IN TUR NOVER. THE ASSESSEE FURTHER CONTENDED THAT THE DIFFERENCE WAS ACCOUNTED IN THE SUBSEQUENT YEARS AND TO THIS EFFECT, FILED NECESSARY RECONCILI ATION STATEMENT. ON VERIFICATION OF THE PAPER BOOK FILED BY THE ASSESSE E, WE FIND THAT THE ASSESSEE HAS SUBMITTED ACCOUNTS COPIES OF EACH PART IES WITH A RECONCILIATION STATEMENT WHICH IS AVAILABLE IN PAPE R BOOK. ON FURTHER VERIFICATION OF THE RECONCILIATION STATEMENT FILED BY THE ASSESSEE, WE FIND THAT THE DIFFERENCE QUANTIFIED BY THE A.O. IS BASED ON FORM 26AS. THE ASSESSEE CONTENDED THAT SHE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND RECOGNIZED THE INCOME ON ACCRUAL BAS IS. THE A.O. HAS NOT POINTED OUT ANY MISTAKES IN THE METHOD OF ACCOU NTING FOLLOWED BY THE ASSESSEE. HE NEVER REJECTED THE BOOKS OF ACCOU NTS MAINTAINED BY THE ASSESSEE. THE A.O. SIMPLY QUANTIFIED THE DIFFE RENCE BETWEEN BOOKS ITA NOS.655,656/VIZAG/2013 & ITA NO.1/VIZAG/2014 SMT. A SWARNA LAKSHMI, VISAKHAPATNAM 9 OF ACCOUNTS AND FORM 26AS. THE ASSESSEE HAS EXPLAI NED THE DIFFERENCE BY FURNISHING NECESSARY RECONCILIATION. THEREFORE, WE ARE OF THE OPINION THAT THE A.O. WAS NOT CORRECT IN MAKING ADDITIONS, TOWARDS DIFFERENCE IN TURNOVER WITHOUT POINTING OUT ANY MISTAKES IN BOOKS OF ACCOUNTS, THAT TOO BASED ON FORM 26AS. THEREFORE, WE DIRECT THE A .O. TO DELETE THE ADDITIONS TOWARDS DIFFERENCE IN TURNOVER. 9. THE NEXT ISSUE CAME UP FOR OUR CONSIDERATION IS DISALLOWANCE U/S 40(A)(IA) OF THE ACT. THE A.O. DISALLOWED ADVERTIS EMENT CHARGES AND FINANCE CHARGES FOR NON DEDUCTION OF TAX AT SOURCE. THE A.O. WAS OF THE OPINION THAT THESE PAYMENTS ATTRACT TDS PROVISIONS, BUT THE ASSESSEE HAS FAILED TO DEDUCT TDS, THEREFORE, DISALLOWED U/S 40(A)(IA) OF THE ACT. IT WAS THE CONTENTION OF THE ASSESSEE THAT THE EXPE NDITURE INCURRED UNDER THESE HEADS HAS BEEN PAID WITHIN THE FINANCIA L YEAR AND NOTHING IS OUTSTANDING AT THE END OF THE BALANCE SHEET DATE. THEREFORE, NO DISALLOWANCE CAN BE MADE U/S 40(A)(IA) OF THE ACT, IN VIEW OF THE SPECIAL BENCH DECISION OF ITAT VISAKHAPATNAM IN THE CASE OF M/S. MERILYN SHIPPING & TRANSPORTS VS. ACIT (2012) 136 ITD 23. THE LD. D.R. STRONGLY OPPOSED THE CONTENTION OF THE A.R. AND ARG UED THAT THE HONBLE A.P. HIGH COURT SUSPENDED THE OPERATION OF SPECIAL BENCH DECISION, ITA NOS.655,656/VIZAG/2013 & ITA NO.1/VIZAG/2014 SMT. A SWARNA LAKSHMI, VISAKHAPATNAM 10 THEREFORE, DISALLOWANCE U/S 40(A)(IA) OF THE ACT IS APPLICABLE EVEN IF THE AMOUNTS HAS BEEN PAID WITHIN THE FINANCIAL YEAR. 10. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE A.O. DISALLOWED ADVERTISEMENT CHARGES AND FINANCE C HARGES U/S 40(A)(IA) OF THE ACT, FOR NON DEDUCTION OF TDS. THE A.O. WAS OF THE OPINION THAT THE ABOVE EXPENDITURE ATTRACT TDS, BUT THE ASSESSEE HAS FAILED TO DEDUCT TDS, THEREFORE, DISALLOWED THE AMOUNT. THE CONTENTION OF THE ASSESSEE IS THAT THE EXPENDITURE INCURRED UNDER THE SE HEADS HAS BEEN PAID DURING THE SAME FINANCIAL YEAR AND NOTHING IS OUTSTANDING AT THE END OF THE BALANCE SHEET DATE AND HENCE NO DISALLOW ANCE CAN BE MADE U/S 40(A)(IA) OF THE ACT. LD. A.R. DURING THE COUR SE OF HEARING SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED BY THE ITAT, VISAKHAPATNAM SPECIAL BENCH DECISION IN THE CASE OF M/S. MERILYN SHIPPING & TRANSPORTS VS. ACIT (2012) 136 ITD 23 AN D ALSO THE DECISION OF MUKUNDARA ENGINEERS AND CONTRACTORS VS. ACIT IN ITA NO.657/VIZAG/2014. WE HAVE EXAMINED THE COORDINATE BENCH DECISION RELIED UPON BY THE ASSESSEE IN THE LIGHT OF THE FAC TS OF THE PRESENT CASE. WE, FIND THAT THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF MUKUNDARA ENGINEERS AND CONTRACTORS VS. ACIT IN ITA 657/VIZAG/2014 ITA NOS.655,656/VIZAG/2013 & ITA NO.1/VIZAG/2014 SMT. A SWARNA LAKSHMI, VISAKHAPATNAM 11 HAS CONSIDERED THE ISSUE, AND AFTER CONSIDERING THE REVENUE OBJECTION WITH REGARD TO SPECIAL BENCH DECISION OF M/S. MERIL YN SHIPPING & TRANSPORTS (SUPRA) AND ALSO CONSIDERING THE RATIO O F HONBLE A.P. HIGH COURT DECISION IN THE CASE OF JANPRIYA ENGINEERING SYNDICATE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT PORT ION IS REPRODUCED HEREUNDER: WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. CONSISTENT WITH THE VIEW TAKEN BY THE ITAT SPECIAL BENCH VISAKHAPATNAM AND ALSO IN THE LIGHT OF THE VIEW EXP RESSED BY THE HONBLE A.P. HIGH COURT IN THE CASE OF JANAPRIYA ENGINEERIN G SYNDICATE, WE ARE OF THE OPINION THAT THE PROVISIONS OF SECTION 40(A)(IA ) OF THE ACT CANNOT BE MADE APPLICABLE IN RESPECT OF THE AMOUNTS ALREADY P AID BEFORE 31 ST MARCH. IN OTHER WORDS, THE A.O. IS DIRECTED TO RESTRICT THE DISALLOWANCE TO THE AMOUNTS PAYABLE AFTER 31 ST MARCH. WITH THESE OBSERVATIONS, GROUND NO.3 OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED. 11. THE REVENUE DID NOT DISPUTE THE FACT WITH REGAR D TO PAID AND PAYABLE. THE CIT(A) HAS RECORDED FINDING OF THE FA CT THAT THE EXPENDITURE INCURRED UNDER THESE HEADS HAVE BEEN AL READY PAID DURING THE FINANCIAL YEAR. THEREFORE, CONSIDERING THE FAC TS AND CIRCUMSTANCES OF THE CASE AND ALSO RESPECTFULLY FOLLOWING THE COORDI NATE BENCH DECISION IN ITA NO.657/VIZAG/2010 (SUPRA), WE ARE OF THE OPINIO N THAT NO DISALLOWANCE CAN BE MADE ON THE PAYMENTS WHICH HAS BEEN PAID DURING THE FINANCIAL YEAR. THEREFORE, WE DIRECT THE A.O. TO DELETE THE ADDITIONS MADE U/S 40(A)(IA) OF THE ACT. ITA NOS.655,656/VIZAG/2013 & ITA NO.1/VIZAG/2014 SMT. A SWARNA LAKSHMI, VISAKHAPATNAM 12 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ITA NO.656/VIZAG/2013: 13. THE FACTS AND ISSUES INVOLVED IN THIS APPEAL AR E IDENTICAL TO ITA NO.655/VIZAG/2013. THEREFORE, FOR THE REASONS RECO RDED IN THE PRECEDING PARAGRAPHS WE ALLOWED THE APPEAL FILED BY THE ASSESSEE. ITA NO.1/VIZAG/2014: 14. WHEN THIS APPEAL IS TAKEN UP FOR HEARING, THE LD . A.R. OF THE ASSESSEE SUBMITTED THAT THE APPEAL IS TIME BARRED B Y 171 DAYS. THE A.R. SUBMITTED THAT THE ASSESSEE HAS FILED A PETITI ON FOR CONDONATION OF DELAY ALONG WITH AFFIDAVIT GIVING REASONS FOR DELAY IN FILING THE APPEAL. THE A.R. FURTHER SUBMITTED THAT THE DELAY IN FILING THE APPEAL IS BEYOND THE CONTROL OF THE ASSESSEE AND SHE HAS FILED THE A PPEAL ON THE ADVICE OF AN EXPERT, WHO ADVISED TO FILE THE APPEAL AFTER REC EIVING THE CONSEQUENTIAL ORDER GIVING EFFECT TO CIT(A)S ORDER . THEREFORE, SHE HAS FILED THE APPEAL, AFTER RECEIPT OF CONSEQUENTIAL OR DER. THE A.R. FURTHER SUBMITTED THAT THE ASSESSEE COULD NOT FILE THE APPE AL WITHIN THE SPECIFIED PERIOD UNDER THE ACT, BECAUSE OF MISTAKEN OF FACTS AND ALSO ON WRONG ADVICE OF AN EXPERT. THEREFORE, THE DELAY OF 171 D AYS IN FILING THE APPEAL MAY PLEASE BE CONDONED AND ALLOW THE APPEAL ON MERITS. ITA NOS.655,656/VIZAG/2013 & ITA NO.1/VIZAG/2014 SMT. A SWARNA LAKSHMI, VISAKHAPATNAM 13 15. ON THE OTHER HAND, THE LD. D.R. DID NOT OPPOSE THE CONDONATION PETITION. 16. WE HAVE HEARD BOTH THE PARTIES. THE LD. D.R. NEV ER OBJECTED THE CONTENTION OF DELAY. HAVING CONSIDERED THE SUBMISS IONS AND ALSO EXERCISING THE POWER VESTED WITH THE TRIBUNAL U/S 2 53(5) OF THE ACT, WE ARE OF THE OPINION THAT THERE IS A VALID REASON FOR NOT PRESENTING THE APPEAL WITHIN THE TIME SPECIFIED UNDER THE ACT. TH EREFORE, WE, ADMIT THE APPEAL AND PROCEED TO DECIDE THE ISSUES AGITATE D ON MERITS. 17. THE FACTS AND ISSUES INVOLVED IN THIS APPEAL AR E IDENTICAL TO ITA NO.655/VIZAG/2013. THEREFORE, FOR THE REASONS RECO RDED IN THE PRECEDING PARAGRAPHS IN ITA NO.656/VIZAG/2013, WE A LLOWED THE APPEAL FILED BY THE ASSESSEE. 18. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E IN ITA NOS.655 & 656/VIZAG/2013 AND IN ITA NO.1/VIZAG/2014 ARE ALLOWED . THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22 ND JAN16. SD/- SD/- (. ) ( . ) ( V. DURGA RAO ) ( G. MANJUNATHA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER : /VISAKHAPATNAM: > / DATED : 22.01.2016 VG/SPS ITA NOS.655,656/VIZAG/2013 & ITA NO.1/VIZAG/2014 SMT. A SWARNA LAKSHMI, VISAKHAPATNAM 14 . 1 @: A:/ COPY OF THE ORDER FORWARDED TO :- 1. - / THE APPELLANT SMT. ATREYAPURAPU SWARNA LAKSHMI, PROP: SL TRANS FLAT NO.6, MUKUND SUVASA APARTMENTS, 3 RD LANE, DWARAKANAGAR, VISAKHAPATNAM- 530 016. 2. 12- / THE RESPONDENT THE DCIT, CENTRAL CIRCLE, VIJAYAWADA 3. C / THE CIT, VIJAYAWADA 4. C () / THE CIT (A), VIJAYAWADA 5. : 1 H, 6 H , : / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // KL H ( SR.PRIVATE SECRETARY ) 6 H , : / ITAT, VISAKHAPATNAM