Arihant Foam Private Limited, Chandigarh V. ITO, Chandigarh

ITA 761/CHANDI/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9894 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 15-04-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 04-09-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: SAHIL CHADHA
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 761 & 762/CHD/2015 A.Y.: 2011-12 & 2012-13 M/S ARIHANT FOAM P.LTD., VS THE ITO, H.NO. 1422, SECTOR 34-C WARD 4(3), CHANDIGARH. CHANDIGARH. PAN: AACCA9036F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SAHIL CHADHA RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 17.06.2016 DATE OF PRONOUNCEMENT : 21.06.2016 O R D E R BOTH THE APPEALS BY ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(APPEALS)-2 CHANDIGARH D ATED 01.06.2015 FOR ASSESSMENT YEAR 2011-12 AND 2012-13. 2. IN ASSESSMENT YEAR 2011-12, ASSESSEE CHALLENGED THE ADDITION OF RS. 13,78,291/- AND RS. 3,09,872/- ON ACCOUNT OF NON-DEDUCTION OF TDS ON INTEREST TO NON BANKING FINANCIAL COMPANY I.E. M/S BAJAJ FINANCE AN D NON DEDUCTION OF TDS ON INTEREST TO M/S SABSONS AGENCY P. LTD. IN ASSESSMENT YEAR 2012-2013,SIMILAR LY ASSESSEE CHALLENGED THE ADDITION OF RS. 26,98,059/- ON ACCOUNT OF NON DEDUCTION OF TDS ON INTEREST TO NON BANKING FINANCIAL COMPANY I.E. M/S BAJAJ FINANCE. 2 3. THE LD. CIT(APPEALS) NOTED THAT ASSESSEE HAD NOT DEDUCTED TAX AT SOURCE ON THE AMOUNTS DEBITED TO PR OFIT & LOSS ACCOUNT OF RS. 13,78,291/- AND RS. 3,09,872/ - AND RS. 26,98,059/- ON ACCOUNT OF INTEREST PAID TO NON BANKING FINANCIAL COMPANIES. THE ASSESSING OFFICER HAS DISALLOWED THESE AMOUNTS UNDER SECTION 40(A)(IA ) OF THE INCOME TAX ACT. 4. DURING THE APPELLATE PROCEEDINGS, ASSESSEE'S COUNSEL SUBMITTED THAT DISALLOWANCE SHOULD NOT HAVE BEEN MADE IN VIEW OF THE DECISION OF SPECIAL BENCH OF ITAT VISHAKHAPATNAM IN THE CASE OF M/S MERILYN SHIPPING & TRANSPORT IN ITA 477/VIZAG/2008 AND OF ALLAHABAD HIGH COURT IN THE CASE OF M/S VICTOR SHIPPING SERVICE PVT. LTD. 357 ITR 642. 5. THE LD. CIT(APPEALS) NOTED THAT THE ISSUE HAS BEEN DECIDED BY HON'BLE PUNJAB & HARYANA HIGH COURT VIDE ORDER DATED 29.04.2015 IN ITA 716 OF 2009 IN T HE CASE OF M/S PMS DIESELS IN WHICH HON'BLE HIGH COURT HAS HELD THAT , DISALLOWANCE UNDER SECTION 40(A)(IA) IS TO BE MADE EVEN IF THE AMOUNT HAS BEEN PAID BY THE ASSESSEE. IN THIS JUDGEMENT, HON'BLE HIGH COURT HAS CONSIDERED THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF M/S VICTOR SHIPPING SERVICE P. LTD. (SUPRA) AND DECISION OF SPECIAL BENCH OF ITAT VISHAKHAPATNAM BENCH IN THE CASE OF M/S MERILYN SHIPPING & TRANSPORT (SUPRA). THE LD. CIT(APPEALS) , 3 THEREFORE, FOLLOWING THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF M/S PMS DIESELS (SUPRA) CONFIRMED THE DISALLOWANCE AND DISMISSED BO TH THE APPEALS OF THE ASSESSEE. 6. AFTER CONSIDERING RIVAL CONTENTIONS, I AM NOT INCLINED TO INTERFERE WITH THE ORDERS OF THE AUTHOR ITIES BELOW. HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF M/S PMS DIESELS 374 ITR 562 (SUPRA) HELD TH AT PROVISIONS OF SECTION 40(A)(IA) OF THE ACT WOULD C OVER AMOUNT PAYABLE AT ANY TIME DURING THE ACCOUNTING YEAR. THE ISSUE IS, THEREFORE, COVERED AGAINST THE ASSESSEE BY THE DECISION OF JURISDICTIONAL HIGH COU RT. THE LD. COUNSEL FOR THE ASSESSEE DID NOT CONTRIBUTE ANYTHING ON THIS ISSUE AND NO MATERIAL HAVE BEEN PRODUCED BEFORE ME TO CONTRADICT THE FINDINGS RECOR DED BY THE LD. CIT(APPEALS). IN THE ABSENCE OF ANY MAT ERIAL ON RECORD, I AM NOT INCLINED TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW. THIS GROUND IS DISMISSED IN BOTH THE APPEALS. 7. IN ASSESSMENT YEAR 2012-13, ASSESSEE HAD ALSO TAKEN GROUND NO. 2 CHALLENGING THE ADDITION OF RS. 99,579/- ON ACCOUNT OF PERSONAL EXPENSES. THE ASSESSING OFFICER MADE ADDITION OF RS. 2,48,947/- O N ACCOUNT OF PERSONAL EXPENSES, DETAILS OF THE SAME A RE NOTED IN THE APPELLATE ORDER WHICH WERE ABOUT 25% O F THE TOTAL EXPENSES CLAIMED. THE LD. CIT(APPEALS), 4 CONSIDERING THE DETAILS OF THE EXPENSES AND SUBMISSIONS OF THE ASSESSEE, RESTRICTED THE DISALLOWANCE TO 10% ON ACCOUNT OF TELEPHONE, VEHICL E AND RUNNING, REPAIR AND MAINTENANCE, CAR LOAN INTER EST AND DEPRECIATION ETC. NO ARGUMENTS HAVE BEEN MADE BEFORE ME AS TO HOW THE DISALLOWANCE IS EXCESSIVE O R NOT REASONABLE. THEREFORE, THIS GROUND HAS NO MERI T, SAME IS ACCORDINGLY, DISMISSED. 8. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 21 ST JUNE, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD