ACIT, Hyderabad V. Akula Rajaiah, Hyderabad

ITA 678/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9841 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-02-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 04-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V SRINIVAS
• Assessee Lawyers: A V RAGHURAM
• Keywords: Non compliance; TDS
• Section: 40(a)(ia); 43D

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER ITA NO.678/HYD/2010 ASSESSMENT YEAR 2007-08 ASST. COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE 9, HYDERABAD VS SHRI AKULA RAJAIAH, HYDERABAD (PAN AEZPA 5824 R) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.SRINIVAS RESPONDENT BY : SHRI A.V.RAGHUR AM O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 2007-08 IS DIRECTED AGAINST THE ORDER OF THE COMMISSION ER OF INCOME- TAX(APPEALS). 2. GROUNDS OF THE REVENUE IN THIS APPEAL READ AS FO LLOWS- 1. THE LEARNED CIT(A) ERRED IN DELETING THE ADDITI ON MADE ON DISALLOWANCE U/S. 40(A)(IA) OF THE INCOME-TAX AC T. 2. THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE DISALLOWANCE U/S. 40(A)(IA)IS FOR NON COMPLIANCE TO THE PROVISIONS OF TDS AND IS ALLOWABLE IN THE YEAR IN W HICH TAXES ARE PAID. BY REJECTING THE BOOKS AND ESTIMAT ING THE INCOME, THE ASSESSEE CANNOT ESCAPE THE PROVISIO NS OF TDS BY TAKING A PLEA THAT ONCE INCOME IS ESTIMAT ED NO FURTHER DISALLOWANCE OF EXPENDITURE CAN BE MADE. 3. THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE DELETION IS AGAINST THE EMBARGO PLACED IN SECTION 40(A)(IA). ITA NO.678/H/2010 SHRI AKULA RAJAIAH, HYDERABAD 2 3. AT THE OUTSET, LEARNED COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE ISSUE IN THE GROUNDS OF APPEAL OF THE REVENUE IS COVERED IN FAVOUR OF THE ASSESSEE WITH SERIES OF DECISIONS REFERRED TO BY THE CIT(A) SUCH AS (I) OF THE HON'BLE ALLAHABAD HIGH COURT IN CIT V/S. BANWARLAL BANSIDHAR(229 ITR 255); (II) OF THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN CIT V/S. SMT.SANTOSH JAIN(159 T AXMAN 392); (III) OF THE HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT V/S. PURUSHOTHAMLAL TAMARKAR(270 ITR 324); BESIDES THE DECISI ONS OF (A)AHMEDABAD BENCH OF THE TRIBUNAL IN VIKSHRA TRADIN G AND INV. P.LTD. V/S. DCIT(61 TTJ); (B) OF THE JAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF PC MUNDRA V/S. ACIT (80 TTJ 945); (C) SP ECIAL BENCH- (KOLKATA) OF THE TRIBUNAL IN ITO V/S. KENARAM SAHA A ND SUBASH SAHA (301 ITR (AT) 171); AND (D)HYDERABAD BENCH OF THE TR IBUNAL DATED 23.10.2009 IN ITA NO.308/HYD/.2009 IN THE CASE OF TEJ A CONSTRUCTIONS, HYDERABAD V/S. ACIT. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS OPP OSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE SUBMITTED THAT THERE IS NO HARM FOR THE ASSESSEE DUE TO D ISALLOWANCE MADE, AS THE SAME SHALL BE ALLOWABLE IN A SUBSEQUENT Y EAR. HE RELIED ON THE ORDER OF THE ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND TH AT THE ISSUE IN THE GROUNDS OF APPEAL OF REVENUE IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISIONS RELIED UPON BY THE LEARNE D COUNSEL FOR THE ASSESSEE AND REFERRED TO BY THE CIT(A) IN HIS APPELL ATE ORDER. VARIOUS COURTS AND BENCHES OF THE TRIBUNAL HAVE TAKEN A CONSISTENT VIEW THAT ONCE THE INCOME OF AN ASSESSEE IS ESTIMATED AFT ER REJECTING THE BOOKS OF ACCOUNT, THERE IS NO FURTHER SCOPE FOR DISALL OWANCE TO BE ITA NO.678/H/2010 SHRI AKULA RAJAIAH, HYDERABAD 3 MADE UNDER S.40(A)(IA) OR UNDER S.40A(3) OR SIMILAR DISALLOWANCES CONTEMPLATED IN SS.30 TO 43D OF THE ACT. IN THE CIRCUMS TANCES, WE FIND NO MISTAKE IN THE ORDER OF THE CIT(A) ON THIS ISSU E. WE ACCORDINGLY HOLD THAT NO INTERFERENCE WITH THE ORDER O F THE CIT(A) IS CALLED FOR. IT IS ACCORDINGLY CONFIRMED AND THE GROUNDS OF THE REVENUE IN THIS APPEAL ARE REJECTED. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 11.2.2011 SD/- SD/- (AKBER BASHA) (G.C. GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DATED THE 11TH FEBRUARY, 2011 COPY FORWARDED TO: 1. SHRI AKULA RAJAIAH, PLOT NO.443A, ROAD NO.86, J UBILEE HILLS, HYDERABAD-500 033 2. ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 9, HYDERABAD 3. CIT(A)-I, HYDERABAD. 4. COMMISSIONER OF INCOME-TAX(CENTRAL), HYDERABAD 5. THE D.R., ITAT, HYDERABAD. B.V.S.