ITO, CHENNAI V. S.C.P.Dhanapal, CHENNAI

ITA 672/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73695 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 27-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 12-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: A S SRIRAMAN
• Section: 143(3)

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL D BENCH, CHENNAI. . . . , . !' !' !' !' , # # # # $% $% $% $% $& $& $& $& BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT & SHRI V. DURGA RAO, JUDICIAL MEMBER $ . / I.T.A.NO.672/MDS/2013 # ' '' / ASSESSMENT YEAR :2009-10 THE INCOME TAX OFFICER, BUSINESS WARD III(2), CHENNAI. VS. SHRI S.C.P. DHANAPAL, NO. 141, S.N. LAKSHMI SREE STREET, JANAKI NAGAR, VALASARAVAKKAM, CHENNAI 600 087. [PAN : AGQPD3799R] ( () () () () / APPELLANT ) ( *+() *+() *+() *+() / RESPONDENT ) () , $ / APPELLANT BY : SHRI S. DASGUPTA, JCIT *+() , $ / RESPONDENT BY : SHRI A.S. SRIRAMAN, ADVOCATE $ , -. / DATE OF HEARING : 27.01.2014 /0' , -. /DATE OF PRONOUNCEMENT : 17.02.2014 1 1 1 1 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) VIII, CHEN NAI DATED 14.12.2012 RELEVANT TO THE ASSESSMENT YEAR 2009-10. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S IN THE BUSINESS OF COMMISSION FROM V CAN NETWORK AND REAL ESTATE BUSIN ESS. THE ASSESSEE HAD FILED HIS RETURN ADMITTING INCOME OF ` .4,96,540/-. THE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.672 672672 672/M/ /M/ /M/ /M/13 1313 13 2 ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT AFTE R FOLLOWING DUE PROCESS UNDER SECTION 143(3) OF THE INCOME TAX ACT. IN THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS O BSERVED THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF ` .16,67,607/- AS AN EXPENSES FOR JCB MACHINE CHARGES. THE AMOUNT HAS BEEN PAID TO M/ S DHANALAKSHMI BHARATHI EARTH MOVERS, DEVAGURU EARTH MOVERS, SKS EARTH MOVERS, SPT EARTH MOVERS AND NRS EARTH MOVERS . THE PAYMENTS DURING THE YEAR EXCEED ` .50,000/- IN EACH CASE AND TDS HAS NOT BEEN DEDUCTED FROM THIS AMOUNT. HENCE, THE ENTI RE EXPENDITURE OF ` .16,67,607/- WAS DISALLOWED BY THE ASSESSING OFFICE R UNDER SECTION 40(A)(IA) OF THE ACT. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFOR E THE LD. CIT(APPEALS) AND DELETED THE ADDITION MADE BY THE A SSESSING OFFICER. 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF ITO V. M/S. THEEKATHIR PRES S IN I.T.A. NO. 2076/MDS/2012 ORDER DATED 18.09.2013 FOR THE ASSESS MENT YEAR 2009- 10. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.672 672672 672/M/ /M/ /M/ /M/13 1313 13 3 6. ON THE OTHER HAND, THE LD. DR HAS FAIRLY ACCEPT ED THAT THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL. 7. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND ALSO GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE ALSO PERUSED THE CASE LAW RELIED ON BY BOTH SIDES AND FIND THAT THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED THE DECISION IN THE CASE OF ITO V. M/S. THEEKATHIR PRESS (SUPRA), IN WHICH THE TRIBUNAL HAS HELD AS UNDER: 3. THE INCOME-TAX APPELLATE TRIBUNAL, VISAKHAPATN AM- SPECIAL BENCH, HAD HELD IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS VS. ADDL. CIT, 16 ITR (TRIB) 1, THAT THE PROVISIONS OF SECTION 40(A)(IA) DO APPLY ONLY TO THOSE AMOUNTS REMAINED PAYABLE BY THE END OF THE PREVIOUS YEAR AND THE SAID PROVISIONS DO NOT APPLY TO THE AM OUNTS ALREADY PAID BY THE ASSESSEE BEFORE THE CLOSE OF THE RELEVANT PREVI OUS YEAR. IN THAT WAY, THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS ) IN THE PRESENT CASE IS CONDUCIVE TO THE DECISION OF THE SPECIAL BE NCH. THE VERY SAME VIEW HAS BEEN UPHELD BY THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. M/S. VECTOR SHIPPING SERVICES(P) LTD. TH E HONBLE ALLAHABAD HIGH COURT, THROUGH THEIR JUDGMENT DATED 9-7-2013 I N ITA NO.122 OF 2013, HAS HELD THAT THE DECISION OF THE SPECIAL BEN CH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS VS. ADD L. CIT IS GOOD LAW. IN THAT WAY, THE PRESENT APPEAL FILED BY THE REVENU E IS LIABLE TO BE DISMISSED. 4. BUT, AT THE SAME TIME, THE LEARNED JOINT COMMIS SIONER OF INCOME- TAX APPEARING FOR THE REVENUE HAS RELIED ON THREE O THER JUDGMENTS RENDERED BY THE HONBLE CALCUTTA HIGH COURT AND GUJ ARAT HIGH COURT, IN WHICH THEIR LORDSHIPS HAVE HELD THAT THE LAW STA TED BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPI NG & TRANSPORTS VS. ADDL.CIT WAS NOT ACCEPTABLE. THE HONBLE CALCUTTA H IGH COURT, THROUGH THEIR JUDGMENT DELIVERED ON 3RD APRIL, 2013 IN ITA NO.20 OF 2013 IN THE CASE OF CIT VS. CRESCENT EXPORT SYNDICA TES, HAS HELD THAT THE ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE C ASE OF MERILYN SHIPPING & TRANSPORTS VS. ADDL.CIT IS NOT ACCEPTABL E. THE SAME VIEW HAS AGAIN BEEN REPEATED BY THE HONBLE CALCUTTA HIG H COURT IN THE CASE OF CIT VS. MD. JAKIR HOSSAIN MONDAL, THROUGH THEIR JUDGMENT DELIVERED ON 4TH APRIL, 2013 IN ITA NO.31 OF 2013. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.672 672672 672/M/ /M/ /M/ /M/13 1313 13 4 5. WE FIND THAT THE JUDGMENT OF THE HONBLE ALLAHA BAD HIGH COURT IS IN FAVOUR OF THE ASSESSEE. AT THE SAME TIME, WE FIN D THAT THE ORDERS OF THE CALCUTTA HIGH COURT AND THE GUJARAT HIGH COURT ARE AGAINST THE ASSESSEE. IN SUCH CIRCUMSTANCES, THE RULE OF JUDICIAL PRECEDE NCE DEMANDS THAT THE VIEW FAVOURABLE TO THE ASSESSEE MUST BE ADOPTED, AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF CIT V. VEGETABLE PRODU CTS LTD., 88 ITR 192. FOLLOWING THE ABOVE FUNDAMENTAL RULE DECLARED BY TH E HONBLE SUPREME COURT, WE HAVE TO FOLLOW THE JUDGMENT OF THE HONBL E ALLAHABAD HIGH COURT, WHICH IS IN FAVOUR OF THE ASSESSEE. ACCORDIN GLY, WE HOLD THAT THE DISALLOWANCE UNDER SECTION 40(A)(IA) APPLIES ONLY T O THOSE AMOUNTS PAYABLE AND NOT TO THOSE AMOUNTS PAID. ACCORDIN GLY, WE UPHOLD THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) IN THE PRESENT CASE. THE APPEAL FILED BY THE REVENUE IS LIABLE TO BE DIS MISSED. 8. THE REVENUE COULD NOT CONTROVERT THE FINDINGS O F THE ABOVE DECISION. THEREFORE, RESPECTFULLY FOLLOWING THE ABO VE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL, WE UPHOLD THE ORD ER OF THE LD. CIT(APPEALS) AND DISMISS THE GROUNDS RAISED BY THE REVENUE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED ON MONDAY, THE 17 TH OF FEBRUARY, 2014 AT CHENNAI. SD/ - SD/ - (DR. O.K. NARAYANAN) VICE-PRESIDENT (V. DURGA RAO) JUDICIAL MEMBER CHENNAI, DATED, THE 17.02.2014 VM/- TO: THE ASSESSEE/A.O./CIT(A)/CIT/D.R.