ACIT 11(1), MUMBAI V. HINDUSTAN THOMPSON ASSOCIATES P.LTD, MUMBAI

ITA 6729/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2606 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 05-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRI

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL H BE NCH, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, JUDICIAL MEMBER, / I .TA NO. 6729/MUM/2014 ( / ASSESSMENT YEAR: 2010-11 THE ACIT - 11(1), AAYAKAR BHAVAN, MUMBAI-400 020 / VS. M/S.HINDUSTAN THOMPSON ASSOCIATES PVT. LTD., PENINSULA CHAMBERS, GANPATRAO KADAM MARG, LOWER PAREL, MUMBAI-400 013 ./ ./ PAN/GIR NO. AAACH 1463M ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI RAHUL RAMAN / RESPONDENT BY: SHRI PANKAJ JAIN / DATE OF HEARING : 31.05.2016 ! / DATE OF PRONOUNCEMENT :13.07.2016 / O R D E R PER C.N. PRASAD, JM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF THE LD. CIT(A)-3, MUMBAI DATED 4.8.2014 PERTAINING TO ASSES SMENT YEAR 2010-11. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT SHORT DEDUCTION OF TAX AT SOURCE WILL NOT ATTRACT THE PROVISIONS OF SE C. 40(A)(IA) OF THE I.T. ACT, 1961? ITA NO. 6729/M/2014 2 2. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT DISA LLOWANCE U/S. 40(A)(IA) OF THE I.T. ACT CANNOT BE MADE WHERE THE TAX DEDUCTED AT SOURCE IS LES THAN THE AMOUNT DEDUCTIBLE AS PER CHAPTER XVIIB OF THE I.T. ACT, 1961? 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE ISSUE, WHETHER THE PROVISIONS OF SEC. 40(A)(IA) ARE ATTRACTED OR NOT, WHEN THERE WAS A SHORT DEDUCTION OF TAX AT SOURCE H AS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE CO-ORDINATE BENCH FOR THE ASSESSMENT YEAR 2008-09 & 2009-10 IN ITA NOS. 6030/ M/2012 DATED 7.2.2014 & 746/M/2014 DATED 19.2.2016. PLACI NG RELIANCE ON THESE DECISIONS, THE LD. COUNSEL FOR THE ASSESSEE S UBMITS THAT THE ISSUE IN APPEAL HAS BEEN SQUARELY COVERED IN FAVOUR OF THE ASSESSEE IN ITS OWN CASE THEREFORE REQUEST FOR SUSTAINING THE O RDER OF THE LD. CIT(A) ON THIS ISSUE. 4. THE LD. DEPARTMENTAL REPRESENTATIVE PLACED RELIA NCE ON THE ORDER OF THE ASSESSING OFFICER. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE DECISION OF THE CO-OR DINATE BENCH IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2008-09 AN D 2009-10. THE CO-ORDINATE BENCH FOR THE ASSESSMENT YEAR 2009-10 IN ITA NO. 746/M/2014 DATED 19.02.2016 CONSIDERED SIMILAR ISSU E AND HELD THAT PROVISIONS OF SEC. 40(A)(IA) HAVE NO APPLICATI ON WHEN THERE IS SHORT DEDUCTION OF TAX OBSERVING AS UNDER: WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL BEFORE US.WE FIND THAT THE HONBLE KERALA HIGH COUR T IN THE CASE OF P V S MEMORIAL HOSPITAL(SUPRA),HAS HELD THAT DEDUCTIO N OF TDS UNDER WRONG PROVISION OF LAW WILL NOT SAVE ASSESSEE FROM DISALLOWANCE U/S. 40(A)(IA)OF THE ACT.HOWEVER,THE KOLKATA HIGH COURT IN THE MATTER OF ITA NO. 6729/M/2014 3 SAMIR TEKRIWAL(SUPRA), HAS HELD THAT EXPENSES ARE N OT LIABLE TO BE DISALLOWED U/S.40(A)(IA)ON ACCOUNT OF SHORT DEDUCTI ON OF TAX.THE HONBLE JURISDICTIONAL HIGH COURT HAS NOT DECIDED T HE ISSUE. THUS,WE ARE FACED WITH TWO DIAGONALLY OPPOSITE VIEWS ABOUT APPLICABILITY OF THE PROVISIONS OF SECTION 40 (A)(IA)OF THE ACT. WE FIND THAT THE HONBLE BOMBAY HIGH COURT HAS IN THE CASE OF ASHOK KUMAR PA REKH(186 IT R212)HAS DEALT WITH THE BINDING PRECEDENCE OF THE H IGH COURT JUDGMENTS.HERE,WE WOULD ALSO LIKE TO REPRODUCE THE A PORTION OF THE JUDGMENT DELIVERED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SIEMENS INDIA LTD.(156ITR11) AND SAME READS AS UNDE R : SO FAR AS THE LEGAL POSITION IS CONCERNED, THE IT O WOULD BE BOUND BY A DECISION OF THE SUPREME COURT A S ALSO BY A DECISION OF THE HIGH COURT OF THE STATE WITHIN WH OSE JURISDICTION HE IS (FUNCTIONING), IRRESPECTIVE OF T HE PENDENCY OF ANY APPEAL OR SPECIAL LEAVE APPLICATION AGAINST THA T JUDGMENT. HE WOULD EQUALLY BE BOUND BY A DECISION OF ANOTHER HIGH COURT ON THE POINT, BECAUSE NOT TO FOLLOW THAT DECI SION WOULD BE TO CAUSE GRAVE PREJUDICE TO THE ASSESSEE. WHERE THERE IS A CONFLICT BETWEEN DIFFERENT HIGH COURTS,HE MUST FOLL OW THE DECISION OF THE HIGH COURT WITHIN WHOSE JURISDICTIO N HE IS (FUNCTIONING), BUT IF THE CONFLICT IS BETWEEN DECIS IONS OF OTHER HIGH COURTS, HE MUST TAKE THE VIEW WHICH IS IN FAVO UR OF THE ASSESSEE AND NOT AGAINST HIM. SIMILARLY, IF THE TRI BUNAL HAS DECIDED A POINT IN FAVOUR OF THE ASSESSEE,HE CANNOT IGNORE THAT DECISION AND TAKE A CONTRARY VIEW, BECAUSE THAT WOU LD EQUALLY PREJUDICE THE ASSESSEE. CONSIDERING THE ABOVE,WE ARE TAKING THE VIEW WHICH IS IN FAVOUR OF THE ASSESSEE.WE ARE FOLLOWING THE JUDGMEN T OF SAMIR TEKRIWAL (SUPRA)OF THE HONBLE KOLKATA HIGH COURT A S WELL AS THE ORDERS OF THE MUMBAI TRIBUNAL DELIVERED BY IT FOR T HE EARLIER YEARS.EFFECTIVE GROUND OF APPEAL IS DECIDE AGAINST THE AO. RESPECTFULLY FOLLOWING THE SAID ORDER, WE UPHOLD TH E ORDER OF THE LD. CIT(A) ON THIS ISSUE AND DISMISS THE REVEN UES APPEAL. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH JULY, 2016. SD/- SD/- (B.R. BASKARAN) (C.N. PRASAD ) ' / ACCOUNTANT MEMBER $ %' /JUDICIAL MEMBER MUMBAI; (' DATED 13 TH JULY, 2016 . % . ./ RJ , SR. PS ITA NO. 6729/M/2014 4 !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. *+ ,%%-. , -.! , / DR, ITAT, MUMBAI 6. , /01 / GUARD FILE. / BY ORDER, *% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI