DCIT (OSD) RG 8(1), MUMBAI V. CALIBRE PERSONNEL SERVICES .P. LTD, MUMBAI

ITA 7347/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92526 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 13-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S B PRASAD
• Assessee Lawyers: C M VAZE
• Keywords: Assessment record; Revised return
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI . . , . , BEFORE SHRI I.P. BANSAL, JM AND RAJENDRA, AM ./ I.T.A. NO.7347/MUM/2013 ( / ASSESSMENT YEAR : 2008-09 DY. COMMISSIONER OF INCOME TAX (OSD), RANGE- 8(1), ROOM NO.260A, 2 ND FLOOR, AAYKAR BHAVAN, MK RAOD, MUMBAI 400 020 / VS. M/S. CALIBRE PERSONNEL SERVICES PVT. LTD., D 2148, OBEROI GARDEN ESTATE, CHANDIVALI FARM ROAD, ANDHERI(E), MUMBAI 400 072 ./ ./ PAN/GIR NO. : AACCC 7025J ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI S.B.PRASAD RESPONDENT BY SHRI C.M.VA ZE ' #$ / DATE OF HEARING : 14/05/2015 ' #$ / DATE OF PRONOUNCEMENT : 14/05/2015 / O R D E R PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE REVENUE AND IT IS DIRECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-16, MUMBAI DATED 10/9/20 13 FOR ASSESSMENT YEAR 2008-09. GROUNDS OF APPEAL READ AS UNDER: 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DIREC TING THE ASSESSING OFFICER TO ALLOW DEDUCTION OF RS.10,16,73,183/- UNDER SECTI ON 40(A)(IA) OF THE ACT ON THE GROUND THAT THE TDS HAS BEEN PAID BY THE ASSESS EE BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME, WITHOUT APPRECIATING T HAT THE PROVISIONS OF SECTION 40(A)(IA) AS AMENDED BY THE FINANCE ACT, 2008 W.R.E .F.01.04.2005 ARE APPLICABLE TO THE ASSESSEE AND THEREFORE, THE C!T(A ) WAS NOT JUSTIFIED IN ALLOWING RELIEF TO THE ASSESSEE ON THE BASIS OF THE AMENDMENT BROUGHT IN BY FINANCE ACT, 2010, W.E.F. 01.04.2010 RELYING ON THE DECISION OF THE HON'BLE ITAT IN THE CASE OF GOLDEN STABLES LIFESTYLES CENTR E PVT. LTD. A.Y. 2005-06 WHICH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND C ONTESTED IN FURTHER APPEAL.' ./ I.T.A. NO.7347/MUM/2013 ( / ASSESSMENT YEAR : 2008-09 2 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DIREC TING THE ASSESSING OFFICER TO ALLOW DEDUCTION OF RS.10,16,73,183/- UNDER SECTI ON 40(A)(IA) OF THE ACT WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE HAD NOT CLAIMED ANY DEDUCTION UNDER SECTION 40(A)(IA) IN ITS ORIGINAL RETURN OF I NCOME AND IN THE TWO REVISED RETURNS FILED BY THE ASSESSEE SUBSEQUENTLY AND, THE REFORE, THE ALLOWANCE OF ANY SUCH DEDUCTION WILL RESULT IN THE ASSESSED INCO ME BEING LOWER THAN THE- RETURNED INCOME WHICH IS CONTRARY TO THE SCHEME OF THE INCOME-TAX ACT, 1961, AS ENVISAGED BY THE DIRECT TAX LAWS (AMENDMENT) ACT , 1987, W.E.F. 01.04.1989 AND AS CLARIFIED IN CBDT'S CIRCULAR NO.5 49 DATED 31.10.1989 WHEREIN IT HAS BEEN STATED AS UNDER:- ' .... UNDER THE NEW PROVISIONS, IN AS ASSESSMENT ORD ER PASSED UNDER SECTION 143(3) IN A SCRUTINY CASE, NEITHER THE INCO ME CAN BE ASSESSED AT A FIGURE LOWER THAN THE RETURNED INCOME, NOT LOSS C AN BE ASSESSED AT A FIGURE HIGHER THAN THE RETURNED LOSS, NOR A FURTHER REFUND CAN BE GIVEN EXCEPT WHAT WAS DUE ON THE BASIS OF THE RETURNED IN COME AND WHICH WOULD HAVE ALREADY BEEN ALLOWED UNDER THE PROVISION S OF SECTION 143(1)(A)(II) ... ' 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DIREC TING THE ASSESSING OFFICER TO ALLOW DEDUCTION OF RS.10,16,73,183/- UNDER SECTI ON 40(A)(IA) OF THE ACT WITHOUT APPRECIATING THAT THE ASSESSEE HAD ALREADY CLAIMED AND AVAILED OF DEDUCTION OF THE SAID AMOUNT IN THE SUBSEQUENT ASSE SSMENT YEAR ON ACTUAL PAYMENT OF TDS IN TERMS OF SECTION 40(A)(IA) OF THE ACT AS APPLICABLE PRIOR TO 01.04.2010.' 2. THE IMPUGNED ORDER HAS BEEN PASSED BY LD. CIT(A) IN PURSUANCE TO DIRECTION GIVEN BY THE TRIBUNAL VIDE ITS ORDER DATE D18/07/2012 IN ITA NO.3047/MUM/2011, WHEREBY LD. CIT(A) WAS DIRECTED T O DECIDE THE ISSUE RELATING TO DISALLOWANCE UNDER SECTION 40(A)(IA) O N MERITS, IF THE SAID ISSUE WAS SPECIFICALLY RAISED DURING THE COURSE OF ASSESS MENT PROCEEDINGS BEFORE AO. THE ASSESSEE HAD FILED REVISED RETURN OF INCO ME DECLARING INCOME OF RS.11,19,85,730/- BY INCLUDING A SUM OF RS.10,16,37 ,183/- DISALLOWED UNDER SECTION 40(A)(IA). HOWEVER, DURING THE COURS E OF ASSESSMENT PROCEEDINGS, ASSESSEE CLAIMED THE AMOUNT ADDED IN THE REVISED RETURN BY DISALLOWANCE UNDER SECTION 40(A)(IA) AMOUNTING TO R S.10,16,37,183/- ON THE GROUND THAT THE SAID AMOUNT WAS DULY PAID BEFORE DU E DATE OF FILING THE RETURN AND THEREFORE, IT WAS ALLOWABLE IN VIEW OF THE DECISION OF MUMBAI ITAT IN THE CASE OF GOLDEN STABLES LIFECENTERS LTD. VS. CIT, (ITA NO.4145/MUM/2005) WHICH DECISION HAS ALSO BEEN REFE RRED BY THE REVENUE IN ITS GROUND NO.1. LD. CIT(A), IN PURSUANCE TO DI RECTIONS OF ITAT HAS GONE THROUGH THE ASSESSMENT RECORD AND HAS FOUND THAT T HIS ISSUE WAS RAISED BY ./ I.T.A. NO.7347/MUM/2013 ( / ASSESSMENT YEAR : 2008-09 3 THE ASSESSEE BEFORE AO AND THUS, LD. CIT(A) HAS PRO CEEDED TO DECIDE THIS ISSUE ON MERITS. THE ASSESSEE HAS MADE SUBMISSION BEFORE LD. CIT(A) THAT SINCE THE TDS AMOUNT WAS PAID BEFORE THE DUE DATE OF FILING THE RETURN THE SAME SHOULD BE ALLOWED IN VIEW OF THE AFOREMENTIONE D DECISION OF TRIBUNAL VIDE WHICH IT WAS HELD THAT AMENDMENT BROUGHT BY TH E FINANCE ACT, 2010 IN SECTION 40(A)(IA) WOULD BE RETROSPECTIVELY APPLICAB LE. ACCEPTING SUCH SUBMISSION OF THE ASSESSEE, LD. CIT(A) HAS DIRECTED THE AO TO DELETE THE DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT IN ALL INSTANCES WHERE TDS HAS BEEN PAID BY THE ASSESSEE BEFORE DUE DATE OF F ILING THE RETURN AFTER DUE VERIFICATION OF THE DATES OF DEPOSITS OF TDS FROM T HE RELEVANT CHALLANS ON RECORD. IT IS AGAINST SUCH FINDING OF LD. CIT(A) T HE REVENUE HAS RAISED AFOREMENTIONED GROUNDS OF APPEAL. 3. LD. DR RELYING UPON THE GROUNDS OF APPEAL SUBMIT TED THAT AMENDMENT BROUGHT BY THE FINANCE ACT, 2010 CANNOT BE APPLIED RETROSPECTIVELY, THEREFORE, COULD NOT BE APPLIED TO IMPUGNED ASSESSM ENT YEAR. THUS, IT WAS PLEADED THAT LD. CIT(A) HAS COMMITTED AN ERROR IN ALLOWING THE IMPUGNED RELIEF TO THE ASSESSEE. IT WAS FURTHER SUBMITTED T HAT LD. CIT(A) DID NOT CONSIDER THE FACT THAT ASSESSEE HAD CLAIMED IMPUGN ED AMOUNT AND HAS AVAILED DEDUCTION OF THE SAID AMOUNT IN SUBSEQUEN T ASSESSMENT YEAR ON ACTUAL PAYMENT OF TDS AND THERE IS NO DIRECTION GI VEN BY LD. CIT(A) TO WITHDRAW THE SAID AMOUNT, IF THE SAME HAS BEEN ALLO WED ON THE BASIS OF ACTUAL PAYMENT MADE IN THE SUBSEQUENT ASSESSMENT YE AR. 4. ON THE OTHER HAND, IT WAS SUBMITTED BY LD. AR TH AT IN ADDITION TO DECISION RELIED UPON BY LD. CIT(A), SUBSEQUENTLY, H ONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NARESH KUMAR ETC.VIDE THEIR ORDER DATED 6/9/2013 IN ITA NO.24 OF 2013 HAVE HELD THAT AMENDMENT BROUGHT BY THE FINANCE ACT, 2010 IN SECTION 40(A)(IA) W.E.F. 1/4/2010 IS RETROS PECTIVE AND IS APPLICABLE TO ASSESSMENT YEAR 2008-09. COPY OF THIS ORDER WAS PLACED ON OUR RECORD AND WAS ALSO GIVEN TO LD. DR. IT WAS FURTHER SUBMI TTED THAT HONBLE GUJARAT ./ I.T.A. NO.7347/MUM/2013 ( / ASSESSMENT YEAR : 2008-09 4 HIGH COURT IN THE CASE OF CIT VS. ASHOK J. PATEL (2 014) 225 TAXMAN 79(GUJ) HAVE ALSO UPHELD THE SIMILAR PROPOSITION WITH THE F OLLOWING OBSERVATIONS: 8.1 NOW, SO FAR AS THE QUESTION NO.2 IN TAX APPEAL NO. 1064 OF 2013 FOR AY 2006-07 LE. DISALLOWANCE OF RS.93,25,426 MADE UNDER SECTION 40(A)(IA) OF THE ACT LE. WITH RESPECT TO RETROSPECTIVE OPERATION OF THE AMENDMENT IN SECTION 40(A)(IA) BY FINANCE ACT, 2010 IS CONCERNED, THE SA ID QUESTION IS SQUARELY COVERED AGAINST THE REVENUE BY DECISION OF THE DIVI SION BENCH OF THIS COURT IN TAX APPEAL NOA12 OF2013 AND ALLIED MATTERS. THE DIV ISION BENCH OF THIS COURT IN TAX APPEAL NOA12 OF20 13 AND ALLIED MATTERS, HAS HELD THAT THE AMENDMENT IN SECTION 40( A)(IA) OF THE ACT BY FINAN CE ACT, 2010 WOULD APPLY RETROSPECTIVELY. 8.2 MR. PARIKH, LEARNED COUNSEL APPEARING ON BEHAL F OF THE REVENUE HAS FAIRLY CONCEDED THAT THE AFORESAID ISSUE IS SQUARELY COVER ED AGAINST THE REVENUE BY THE DIVISION BENCH OF THIS COURT IN TAX APPEAL NOAI 2 OF 2013 AND ALLIED MATTERS. 8.3 NOW, SO FAR AS DISALLOWANCE MADE UNDER SECTION 40(A)(IA) WITH RESPECT TO AY 2005-06 IS CONCERNED, IT APPEARS THAT AS SUCH TH E ASSESSEE PREFERRED APPEAL AND CLAIMED THAT THE SAID EXPENDITURE BE ALL OWED IN THE NEXT ASSESSMENT YEAR WHICH HAS BEEN ACCEPTED BY THE LEAR NED ITAT. THEREFORE, AS SUCH THE QUESTION WITH RESPECT TO DISALLOWANCE UNDE R SECTION 40(A)(IA) WOULD NOT ARISE IN TAX APPEAL NO.1065 OF2013 FOR AY 2005- 06. 4.1 THUS, IT WAS PLEADED BY LD. AR THAT LD. CIT(A) DID NOT COMMIT ANY ERROR IN DIRECTING THE AO TO ALLOW THE IMPUGNED RE LIEF ON THE BASIS OF PAYMENT MADE BEFORE THE DUE DATE OF FILING THE RET URN. LD.AR DID NOT OBJECT TO THE SUBMISSIONS OF LD.DR THAT AO MAY BE DIRECTE D THAT IF ANY PART OF THE IMPUGNED AMOUNT OF RS.10,16,73,183/- WHICH IS ALLO WED IN PURSUANCE OF SUCH DIRECTIONS OF LD. CIT(A) AND HAS BEEN CLAIMED AND ALLOWED IN SUBSEQUENT YEAR ON THE BASIS OF ACTUAL PAYMENT, THE N SUCH ALLOWANCE IN SUBSEQUENT ASSESSMENT YEAR, TO THE EXTENT IT HAS BE EN ALLOWED IN ASSESSMENT YEAR 2008-09, CAN BE WITHDRAWN. 5. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTEN TIONS HAVE CAREFULLY BEEN CONSIDERED. IN VIEW OF AFOREMENTIONED DECISI ON OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS .NARESH KUMAR ETC.(SUPR A) AND HONBLE GUJARAT HIGH COURT DECISION IN THE CASE OF ASHOK J. PATEL(S UPRA), WHEREIN IT HAS BEEN HELD THAT AFOREMENTIONED AMENDMENT BROUGHT BY FINAN CE ACT, 2010 WOULD BE RETROSPECTIVELY APPLICABLE, WE HOLD THAT LD. C IT(A) DID NOT COMMIT ANY ERROR IN ALLOWING THE APPROPRIATE RELIEF TO THE ASS ESSEE. HOWEVER, WE DIRECT ./ I.T.A. NO.7347/MUM/2013 ( / ASSESSMENT YEAR : 2008-09 5 THE AO THAT IF ANY PORTION OF IMPUGNED AMOUNT OF RS .10,16,73,183/- IS ALLOWED TO THE ASSESSEE IN SUBSEQUENT ASSESSMENT Y EAR ON THE BASIS OF ACTUAL PAYMENT THEN, THE SAME MAY BE WITHDRAWN TO T HE EXTENT IT HAS BEEN ALLOWED IN ASSESSMENT YEAR 2008-09. WITH THESE OBS ERVATIONS, IN VIEW OF ABOVE DISCUSSION, WE DISMISS THE REVENUES APPEAL. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/05/2015 ' + ,- 14/05/2015 ' SD/- SD/- (RAJENDRA) . . (I.P.BANSAL) /ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; , DATED 14/05/2015 !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 0# ( ) / THE CIT(A)- 4. 0# / CIT 5. 12 #34 , $ 34 , / DR, ITAT, MUMBAI 6. 5 / GUARD FILE. / BY ORDER, 1# # //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . .VM , SR. PS