JCIT 25(1), MUMBAI V. AJAY ARVNDBHAI KHATRI, MUMBAI

ITA 6636/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62382 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 01-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 15-09-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRADIP KUMAR SINGH
• Assessee Lawyers: JITENDRA SINGH
• Keywords: Additional evidence; Non-deduction of tax
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A,MUMBAI BEFORE SHRI R.S. SYAL (AM) & SHRI S. S. GODARA (JM) I.T.A. NO. 6636/MUM /2010 (A.Y. 2006-07) JT. COMMR. OF INCOME-TAX- 25(1), MUMBAI. VS. SHRI AJAY ARVINDBHAI KHATRI, 30/31, BORIVALI SHOPPING CENTRE, CHANDAWARKAR ROAD, BORIVALI (W), MUMBAI-400 092. PAN: AAEFA7242G. APPELLANT RESPONDENT APPELLANT BY SHRI PRADIP KUMAR SINGH. RESPONDENT BY S/SHRI K.GOPAL & JITENDRA SINGH. DATE OF HEARING 01-05-2012 DATE OF PRONOUNCEMENT 09-05-2012 O R D E R PER R.S. SYAL, AM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 28-06-2010 IN RELATION TO T HE ASSESSMENT YEAR 2006-07. ITA 6636/MUM/2010 AJAY A. KHATRI. 2 2. THE FIRST GROUND IS AGAINST RESTRICTING THE ADDI TION MADE BY THE AO AMOUNTING TO RS.18,29,565/- ON ACCOUNT OF ES TIMATION OF PROFIT TO RS.42,860/-. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE AT THE MATERIAL TIME WAS ENGAGED IN THE BUSINESS OF RE ADYMADE GARMENTS HAVING MAIN BUSINESS CENTRE AT BORIVALI, M UMBAI, WITH BRANCHES AT MALAD, MUMBAI, AND AHMEDABAD. THE ASSES SEE WAS CALLED UPON TO FURNISH THE CLOSING STOCK DETAILS. T HE SAME WAS FURNISHED IN RESPECT OF BORIVALI BRANCH. NO CLOSING STOCK DETAILS IN RESPECT OF OTHER TWO BRANCHES WERE FURNISHED. THE A SSESSEE WAS CATEGORICALLY ASKED TO STATE THE DATES ON WHICH THE GOODS PURCHASED THROUGH THE FOLLOWING BILLS WERE SOLD AND IF NOT SOLD THEN WHERE THE SAME APPEARED IN CLOSING STOCK : (I) PURCHASES MADE FROM AARAMBH VIDE THEIR BILL DATED 18.3.2006 FOR RS.37,960/-. (II) PURCHASES MADE FROM AJANTA TRADING CO. VIDE THEIR BILL DATED 2.3.2006 FOR 606.6 METER CLOTH AT THE RATE OF RS.250/- PER METER. (III) PURCHASES MADE FROM ANAND TRADE LINK VIDE THEIR BILL DATED 4.3.2006 FOR RS.1,56,750/-. (IV) PURCHASES MADE FROM APPLIQUE AND ETHNIC VIDE THEIR BILL DATED 31.3.2006 FOR RS.11,420/- AND RS.12,697/-. ITA 6636/MUM/2010 AJAY A. KHATRI. 3 (V) PURCHASES MADE FROM M/S. BHAPRESH SILK CENTRE VIDE THEIR BILL DATED 27.3.2006 FOR RS.4900/-. (VI) PURCHASES MADE FROM M/S.CHETAN CREATION VIDE THEIR BILL DATED 27.3.2006 FOR RS.29,640/-. 4. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO HOW TH E BILL OF AARAMBH DATED 18.3.2006 FOR RS.37,960/- WAS ENTERED TWICE IN THE PURCHASE ACCOUNT. SINCE THE ASSESSEE COULD NOT CONFIRM AS TO WHETHER THE ABOVE PURCHASES WERE EITHER SOLD IN FUL L OR RECORDED IN THE CLOSING STOCK, THE AO OPINED THAT THE VALUAT ION OF CLOSING STOCK FURNISHED BY THE ASSESSEE WAS NOT CAPABLE OF ACCEPTANCE. INVOKING THE PROVISIONS OF SEC. 145, THE AO APPLIED GROSS PROFIT RATES OF EARLIER YEAR WHICH RESULTED INTO ADDITION OF RS.18,29,565/-. 5. BEFORE THE FIRST APPELLATE AUTHORITY, IT WAS CON TENDED ON BEHALF OF THE ASSESSEE THAT THE AO REQUIRED THE ASS ESSEE TO IDENTIFY THE PURCHASES MADE IN MARCH 2006 ON 8.12.2 008 AND THE ASSESSEE WAS REQUIRED TO COMPLY WITH THE REQUIREMEN T ON 17.12.2008 THEREBY DENYING ADEQUATE OPPORTUNITY OF HEARING. THE ASSESSEE FURNISHED THE DETAILS BEFORE THE LD. CIT(A ) WHICH COULD NOT BE EARLIER MADE AVAILABLE TO THE AO DUE TO PA UCITY OF TIME PROVIDED AT THE ASSESSMENT STAGE. THE LD. CIT(A) RE MANDED THE ITA 6636/MUM/2010 AJAY A. KHATRI. 4 MATTER TO THE AO WITH A DIRECTION TO TAKE SUCH ADDI TIONAL MATERIAL ON RECORD INCLUDING STOCK STATEMENT OF MALAD AND AH MEDABAD BRANCHES. IN THE REMAND REPORT SUBMITTED BY THE AO ON 29.1.2010, HE REPLIED AS UNDER : 1. PURCHASES MADE FROM M/S. AARAMBH WORTH RS.37,960/-. THE ASSESSEE HAS SOLD THE ABOVE GOODS ON DIFFERENT DATES. THE COPIES OF SALES MEMO WAS FILED BY THE ASSESSEE WHICH IS DULY VERIFIED. 2. PURCHASES FROM M/S. AJANTA TRADING COMPANY. PURCHASE OF FABRICS (604.600 MT.) WAS SHOWN AS CLOSING STOCK IN AHMEDABAD STOCK STATEMENTS. THIS WAS ALSO VERIFIED FROM THE STOCK STATEMENT OF AHMEDABAD BRANCH. 3. IN CASE OF PURCHASE OF SUITING FROM ANAND TRADE LINK (950 MT.) AMOUNTING TO RS.1,56,750/- THE ASSESSEE HAS SHOWN THESE ITEMS IN THE STOCK STATEMENT OF AHMEDABAD BRANCH WHICH WAS DULY VERIFIED. 4. PURCHASES MADE FROM APPLIQUE AND ETHNIC WEAR VIDE BILL NO. 683 AND 684 AMOUNTING TO RS.48 PIECE IN THE STOCK STATEMENT OF AHMEDABAD BRANCH WHICH WAS VERIFIED FROM THE STOCK STATEMENT FILED BY THE ASSESSEE. 5. PURCHASES FROM CHETAN CREATION VIDE BILL NO.1595 DATED 27.3.2006 (23 CHURIDAR 2 PC SET) THE ASSESSEE HAS SHOWN THIS QUANTITY OF 23 PC IN THE STOCK STATEMENT OF MALAD BRANCH WHICH WAS VERIFIED. 6. HOWEVER, THE ASSESSEE FAILED TO PRODUCE ANY CASH MEMOS IN RESPECT OF PURCHASES OF 24.50 MT. OF ITA 6636/MUM/2010 AJAY A. KHATRI. 5 RAW SILK AMOUNTING TO RS.4,900/-. THE ASSESSEE HAS STATED THAT THE SAID ITEMS WERE RESOLD BY THEM BEFORE 31.03.2006 VIDE VARIOUS CASH MEMOS BUT IT IS DIFFICULT TO FIND OUT VARIOUS CASH MEMOS CONTAINING SMALL QUANTITIES OF SALE. 6. THE ADDL. CIT, WHILE FORWARDING THE REMAND R EPORT OF THE AO, VIDE HIS LETTER DATED 16.2.2010, SUBMITTED THAT ADE QUATE OPPORTUNITY WAS GIVEN TO THE ASSESSEE DURING THE CO URSE OF ASSESSMENT PROCEEDINGS. HE MADE OUT A CASE THAT THE ASSESSEE FAILED TO FURNISH SALES LEDGER ALONG WITH BREAK-UP OF BILL WISE SALES FROM WHICH IT COULD BE VERIFIED THAT THE SALES MADE WERE ACTUALLY THE SAME WHICH THE AO HAD SPECIFICALLY POINTED OUT. THE SAID REMAND REPORT WAS CONFRONTED TO THE ASSESSEE, WHO ARGUED THAT ALL THE NECESSARY DETAILS WERE FURNISHED BEFORE THE AO TO HIS SATISFACTION EXCEPT THE PURCHASES FROM AARAMBH AMO UNTING TO RS.37,960/- WHICH WAS, BY MISTAKE, ACCOUNTED FOR T WICE AND ONE PURCHASE WORTH RS.4,900/- FOR WHICH THE ASSESSEE CO ULD NOT PRODUCE CASH MEMO. THE LD. CIT(A), OBSERVED THAT T HOUGH THE AO AFTER EXAMINING THE DETAILS FILED BEFORE HIM DURING THE REMAND PROCEEDINGS ACCEPTED THE GENUINENESS OF THE BOOKS E XCEPT FOR TWO DISCREPANCIES, BUT THE ADDL. CIT SUBMITTED ADVERSE COMMENTS WITHOUT HEARING THE ASSESSEE WHILE FORWARDING THE R EPORT. HE CALLED BOTH THE ADDL. CIT AND THE AO. THE CASE WAS DISCUSSED ITA 6636/MUM/2010 AJAY A. KHATRI. 6 WITH THEM IN THE PRESENCE OF THE ASSESSEES REPRESE NTATIVE. THE ADDL. CIT REQUESTED FOR ONE MONTHS TIME TO RE-EXAM INE IN THE LIGHT OF THE OBSERVATIONS MADE BY HIM. THE LD. CIT( A), ACCEDING TO THE REQUEST OF ADDL. CIT, ADJOURNED THE CASE TO 21- 5-2010. UPTO THE SAID DATE, I.E. 21.5.2010, WHEN NO REPORT WAS R ECEIVED BY THE LD. CIT(A), HE POSTED THE CASE FOR HEARING AGAIN ON 21.6.2010 ENABLING THE AUTHORITIES TO FURNISH ANY ADDITIONAL REMAND REPORT, IF DESIRED. ON FURTHER ENQUIRY, IT WAS FOUND BY THE LD. CIT(A) THAT BOTH OF THE AUTHORITIES WERE TRANSFERRED WITHOUT H ANDING OVER ANY NOTE ON THIS ISSUE TO THEIR RESPECTIVE SUCCESSORS. IN THIS BACKDROP OF THE FACTS, THE LD. CIT(A) CAME TO THE CONCLUSION THAT THE AO WAS LARGELY SATISFIED WITH THE CORRECTNESS OF THE BOOKS OF ACCOUNT. HE, THEREFORE, CAME TO HOLD THAT THE BOOKS OF ACCOUNT COULD NOT BE REJECTED. HE, HOWEVER, DIRECTED TO RETAIN THE ADDIT IONS OF RS.37,960/- AND RS.4,900/- DISCUSSED ABOVE AND ORDE RED FOR THE DELETION OF THE REMAINING ADDITION OF RS.17,86,705/ -.THE REVENUE IS AGGRIEVED AGAINST THIS RELIEF ALLOWED IN THE FIR ST APPEAL. 7. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT THE AO REJE CTED THE BOOKS OF ACCOUNT PRIMARILY FOR THE REASON THAT NO CLOSING STOCK DETAILS IN RESPECT OF MALAD AND AHMEDABAD BRANCHES WERE FURNIS HED. THE ITA 6636/MUM/2010 AJAY A. KHATRI. 7 SECOND MAIN REASON WHICH WEIGHED FAVOUR WITH THE A O FOR REJECTING THE BOOKS OF ACCOUNT WAS ENQUIRY ABOUT SI X PURCHASES BILLS, AS NOTED ABOVE, TO SHOW THEIR DESTINATION EI THER IN THE SALES OR THE CLOSING STOCK. IT IS OBSERVED FROM THE IMPUG NED ORDER THAT THE AO DID NOT ALLOW ADEQUATE OPPORTUNITY TO THE AS SESSEE AT THE ASSESSMENT STAGE TO ADDUCE MATERIAL IN ITS SUPPORT. THAT IS THE REASON FOR WHICH THE LD. CIT(A) REMANDED THE MATTER TO THE FILE OF AO FOR CONSIDERING THE FRESH MATERIAL FILED BEFORE HIM. SUCH FRESH MATERIAL, INTER ALIA, STOCK STATEMENT IN RESPECT O F MALAD BRANCH, COPY OF WHICH IS AVAILABLE ON PAGE 51 OF THE PAPER BOOK, AND STOCK STATEMENT OF AHMEDABAD BRANCH, COPY OF WHICH IS AVA ILABLE ON PAGE 54 OF THE PAPER BOOK, WERE FILED BEFORE THE AO . SUCH MATERIAL WAS CONSIDERED BY THE AO DURING THE REMAND PROCEEDINGS ALONG WITH THE OBSERVATIONS MADE BY THE AO DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS IN RE SPECT OF SIX PURCHASE BILLS RELATING TO THE MONTH OF MARCH 2006. THE AO GOT SATISFIED AS IS APPARENT FROM HIS REMAND REPORT DAT ED 29.1.2010 WHICH HAS BEEN EXTRACTED ABOVE EXCEPT ONE PURCHASE BILL OF RS.37,960/- FROM AARAMBH WHICH WAS ENTERED TWICE AN D OTHER PURCHASE FOR RS.4,900/- WHICH WAS MADE IN CASH FOR WHICH THE BILLS COULD NOT BE ADDUCED BY THE ASSESSEE. FROM TH E ABOVE ITA 6636/MUM/2010 AJAY A. KHATRI. 8 DISCUSSION, IT CLEARLY EMERGES THAT THE OBJECTIONS RAISED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS WERE FULLY MET BY THE ASSESSEE IN THE REMAND PROCEEDINGS BY FURNIS HING COPIES OF STOCK STATEMENT IN RESPECT OF AHMEDABAD AND MALAD B RANCHES, TO WHICH NO OBJECTION WAS RAISED BY THE AO IN THE REM AND PROCEEDINGS. FURTHER, THE INQUIRY REGARDING SIX PUR CHASE BILLS WAS ALSO DULY MET WITH BY THE ASSESSEE BY EXPLAINING TH E DESTINATION OF SUCH PURCHASES EITHER IN THE SALES OR IN THE CLO SING STOCK, TO WHICH THE AO HAS NOT RAISED ANY OBJECTION. THUS, IT CAN BE SEEN THAT EXCEPT FOR TWO IRREGULARITIES I.E. RECORDING O F PURCHASE BILLS FOR RS.37,960/- FROM AARAMBH TWICE AND NOT PRODUCING CA SH MEMO IN RESPECT OF PURCHASE MADE FOR RS.4,900/-, THERE R EMAINS NO MATERIAL WITH THE AO TO JUSTIFY THE REJECTION OF BO OKS OF ACCOUNT. THESE TWO MISTAKES ARE NOT SO RELEVANT, WHEN SEEN I N THE ENTIRETY OF FACTS AND CIRCUMSTANCES PREVAILING IN THE INSTAN T CASE, TO WARRANT THE REJECTION OF BOOKS OF ACCOUNT. IN OUR C ONSIDERED OPINION, THE LD. CIT(A) WAS JUSTIFIED IN ACCEPTING THE BOOKS OF ACCOUNT BUT SUSTAINING SPECIFIC ADDITION TO THE TUN E OF RS.42,860/- (RS.37,960 + RS.4,900). WE, THEREFORE, APPROVE THE VIEW TAKEN BY THE LD. CIT(A) IN DELETING THE ADDITI ON OF RS.17.86 LAKHS. ITA 6636/MUM/2010 AJAY A. KHATRI. 9 8. THE SECOND GROUND IS AGAINST RESTRICTING THE ADD ITION MADE U/S.40(A)(IA) ON ACCOUNT OF NON-DEDUCTION OF TAX AT SOURCE ON ADVERTISEMENT PAYMENTS TO RS.3,10,306/- AS AGAINST RS.7,72,530/- MADE IN THE ASSESSMENT ORDER. THE FAC TS APROPOS THIS ISSUE ARE THAT THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE TOWARDS ADVERTISEMENT CHARGES OF RS.7,72,530/- IN R ESPECT OF PAYMENTS MADE TO M/S. PANTHER ADVERTISEMENTS, M/S. OM ADVETISERS AND M/S. JAY AMBI ADVERTISERS. THE AO MA DE DISALLOWANCE U/S.40(A)(IA) TO THE EXTENT OF RS.7,72 ,530/-. APART FROM THAT, THE ASSESSEE ALSO FAILED TO DEDUCT TAX A T SOURCE ON RENT PAYMENT OF RS.1,44,000/- TO SHRI ARVIND S. SHAH, W HICH AMOUNT ALSO CAME TO BE DISALLOWED BY THE AO DURING THE COU RSE OF ASSESSMENT PROCEEDINGS. THE ASSESSEE ARGUED BEFORE THE LD. CIT(A) THAT THE AO DID NOT ALLOW ADEQUATE OPPORTUNI TY TO THE ASSESSEE FOR ADDUCING MATERIAL IN THIS REGARD. ACCO RDINGLY, SOME ADDITIONAL EVIDENCE WAS FURNISHED, WHICH THE LD. CI T(A) TOOK ON RECORD AND CALLED FOR REMAND REPORT FROM THE AO REG ARDING DISALLOWANCE U/S. 40(A)(IA) AT RS.7,72,530/- AND RS .1,44,000/-. THE AO VIDE HIS REMAND REPORT DATED 29.1.2010 ADMIT TED THAT THE ASSESSEE DEDUCTED TAX AT SOURCE IN RESPECT OF PAYME NTS MADE TO M/S. PANTHER ADVERTISEMENTS AS SEEN FROM COPY OF FO RM NO.16A ITA 6636/MUM/2010 AJAY A. KHATRI. 10 SUBMITTED BEFORE HIM. IT WAS ADMITTED BY THE AO THA T THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE IN RESPECT OF OTHER PAYMENTS INCLUDING RENT. THE ADDL. CIT, WHILE FORWA RDING THE REMAND REPORT OF THE AO, COMMENTED THAT ASSESSEE FA ILED TO DEDUCT TAX AT SOURCE AT THE APPROPRIATE RATE WHICH, IN HIS OPINION, WAS 10% U/S. 194J AND NOT 2.2% AS WAS DEDUCTED BY T HE ASSESSEE U/S.194C. A COPY OF THE REMAND REPORT WAS SUPPLIED TO THE ASSESSEE AS WELL. IT WAS STATED ON BEHALF OF TH E ASSESSEE THAT THERE WAS A MISTAKE IN MENTIONING THE CORRECT SECTI ON AS 194C WHICH WAS ON ADVERTISEMENT CONTRACT. AFTER CONSIDER ING THE ENTIRE MATERIAL INCLUDING THE REMAND REPORT, THE LD. CIT(A ) OBSERVED THAT THE ASSESSEE HAD DEDUCTED TAX AT SOURCE ON AMOUNT P AID/CREDITED AT RS.4,62,224/- WHICH WAS DEPOSITED IN TWO INSTALL MENTS VIZ. RS.7,958/- ON 27.1.2006 ON THE PAYMENT OF RS.3.61 L AKHS AND RS.2,211/- ON 21.6.2006 ON THE PAYMENT OF RS.1.00 L AKH. HE, THEREFORE, HELD THAT NO ADDITION SHOULD BE MADE U/S . 40(A)(IA) IN RESPECT OF RS.4,62,224/- AND ACCORDINGLY CONFIRMED THE ACTION OF THE AO IN RESPECT OF THE REMAINING AMOUNT ON WHICH THE ASSESSEE FAILED TO DEDUCT TAX AT SOURCE. THE REVENUE IS AGGR IEVED AGAINST THE RELIEF ALLOWED BY THE LD. CIT(A) TO THE TUNE OF RS.4.62 LAKHS. ITA 6636/MUM/2010 AJAY A. KHATRI. 11 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE LD. AR FAIRLY CONC EDED THAT THE ASSESSEE HAD NOT CHALLENGED THE IMPUGNED ORDER IN R ESPECT OF THE REMAINING DISALLOWANCE SUSTAINED BY THE LD. CIT(A) U/S. 40(A)(IA). HE, HOWEVER, SUPPORTED THE IMPUGNED ORDER TO THE EX TENT OF RELIEF ALLOWED ON PAYMENT OF RS.4.62 LAKHS ON WHICH THE AS SESSEE DEDUCTED TAX AT SOURCE AND PAID ON 27.1.2006 AND 21 .6.2006. IN SO FAR AS THE ADVERTISEMENT EXPENDITURE OF RS.3.16 LAKHS ARE CONCERNED, IT IS AMPLY BORNE OUT FROM TDS CERTIFICA TE IN FORM NO.16A, A COPY OF WHICH IS AVAILABLE AT PAGE 64 OF THE PAPER BOOK, THAT THE ASSESSEE DEDUCTED TAX AT SOURCE @ 2.2%. SU CH AMOUNT WAS PAID/CREDITED TO THE ACCOUNT OF THE PAYEE ON 30 .9.2005. ADMITTEDLY, THIS DEPOSIT IS BEYOND THE PRESCRIBED P ERIOD FOR DEDUCTION AND PAYMENT OF TAX AT SOURCE. RECENTLY, T HE SPECIAL BENCH OF THE TRIBUNAL AT VIZAKHAPATNAM IN M/S. MERI LYN SHIPPING & TRANSPORT CO. VS. ACIT, VIDE ITS MAJORIT Y ORDER HAS HELD THAT SEC. 40(A)(IA) CANNOT BE INVOKED IN RESPE CT OF AMOUNT ACTUALLY PAID WITHIN THE PREVIOUS YEAR AND AS SUCH THERE CANNOT BE ANY DISALLOWANCE U/S. 40(A)(IA). DESPITE THE FAC T THAT THE ASSESSEE DEPOSITED THE AMOUNT OF TAX DEDUCTED AT SO URCE BEYOND THE DUE DATE BUT WITHIN THE YEAR ITSELF, THE RATIO DECIDENDI OF THE ITA 6636/MUM/2010 AJAY A. KHATRI. 12 SPECIAL BENCH ORDER WILL SQUARELY APPLY TO THIS AMO UNT. ACCORDINGLY, THERE CANNOT BE ANY DISALLOWANCE U/S.4 0(A)(IA) IN RESPECT OF SUCH AMOUNT. IN SO FAR AS THE REMAINING AMOUNT OF RS.1,00,497/- IS CONCERNED, THIS AMOUNT WAS CREDITE D TO THE ACCOUNT OF THE PAYEE ON 31.3.2006 AND THE AMOUNT OF TAX DEDUCTED AT SOURCE AMOUNTING TO RS.2,211/- WAS PAID ON 21.1.2006. ON A SPECIFIC QUERY, THE LD. AR ADMITTED THAT GOING BY THE DUE DATE FOR THE PAYMENT OF SUCH TAX DEDUCTED A T SOURCE, THERE WAS A DELAY OF ABOUT ONE MONTH. IN THIS VIEW OF THE MATTER, IT BECOMES CLEAR THAT THE AMOUNT OF RS.1,00,497/- W AS PAYABLE AS AT THE END OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AND THE SPECIAL BENCH ORDER IN THE CASE OF MERILYN SHIPPING TRANSPORT CO. (SUPRA) WILL NOT COM E TO THE RESCUE OF THE ASSESSEE. THE LD. AR ADMITTED TO HAVE NO OBJECTION IF SUCH AMOUNT OF RS.1,00,497 WAS DISALLOWED IN THE CU RRENT YEAR BUT ALLOWED IN THE SUBSEQUENT YEAR IN TERMS OF THE SPECIAL BENCH ORDER PASSED BY THE MUMBAI BENCH OF THE TRIBUNAL O N 9.9.2011 IN THE CASE OF BHARATI SHIPYARD LTD. VS. DCIT HOLDI NG THAT THE AMENDMENT TO SEC. 40(A)(IA) BY THE FINANCE ACT 2010 IS RETROSPECTIVELY APPLICABLE ONLY FROM ASSESSMENT YEA R 2010-11 AND NOT EARLIER. AS SUCH, WE OVERTURN THE IMPUGNED ORDE R TO THE ITA 6636/MUM/2010 AJAY A. KHATRI. 13 EXTENT OF ALLOWING RELIEF IN RESPECT OF RS.1,00,497 /- ON WHICH TAX WAS DEDUCTED AND DEPOSITED THOUGH BEYOND THE PRESCR IBED PERIOD BUT BEFORE THE DUE DATE GIVEN U/S. 139(1) OF THE AC T. ACCORDINGLY, THE DISALLOWANCE MADE U/S.40(A)(IA) IS SUSTAINED IN RESPECT OF RS.1,00,497/- AND THE AO IS DIRECTED TO GRANT DEDUC TION FOR THE SUM IN THE IMMEDIATELY SUCCEEDING YEAR WHEN THE ASS ESSEE DEPOSITED THE AMOUNT OF TAX DEDUCTED AT SOURCE IN T HE EXCHEQUER. THIS GROUND IS THEREFORE PARTLY ALLOWED. 10. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED ON THE 09TH DAY OF MAY, 2012 . SD/- SD/- (S.S. GODARA) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 09TH MAY , 2012. NG: COPY TO : ITA 6636/MUM/2010 AJAY A. KHATRI. 14 1.DEPARTMENT. 2.ASSESSEE. 3 CIT(A)-35, MUMBAI. 4 CIT-25,MUMBAI. 5.DR,A BENCH, MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST. REGISTRAR, ITAT, MUMBAI. ITA 6636/MUM/2010 AJAY A. KHATRI. 15 DETAILS DATE INITIAL S DESIG NATIO N 1. DRAFT DICTATED ON 1-05-12 SR.PS / 2. DRAFT PLACED BEFORE AUTHOR 2-05-12 SR.PS / 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/A M 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/A M 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS / 6. KEPT FOR PRONOUNCEMENT ON SR.PS / 7. FILE SENT TO THE BENCH CLERK SR.PS / 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DISPATCH OF ORDER *