DCIT, Circle-2(2), Hyderabad V. Ms Hycons Infrastructures India Ltd., Hyderabad

ITA 780/HYD/2014

• Counselvise Citation: 78022514 RSA 2014
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 29-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KIRAN KATTA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.780/HYD/14 : ASSESSMENT YEAR 2009 - 10 DY. COMMISSIONER OF INCOME - TAX CIRCLE 2(2), HYDERABAD V/S. M/S. HYCONS INFRASTRUCTURES INDIA LTD., HYDERABAD (PAN - AACCA 8494 R) (APPELLANT) (RESPONDENT) AND ITA NO.855/HYD/14 : ASSESSMENT YEAR 2009 - 10 M/S. HYCONS INFRASTRUCTURES INDIA LTD., HYDERABAD (PAN - AACCA 8494 R) V/S. DY. COMMISSIONER OF INCOME - TAX CIRCLE 2(2), HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY : S HRI MOHD AFZAL DEPARTMENT BY : SHRI KIRAN KATTA, DR DATE OF HEARING 10 .0 9 .2014 DATE OF PRONOUNCEMENT 12.09.2014 O R D E R PER P.M.JAGTAP, ACCOUNTANT MEMBER : THESE TWO APPEALS, ONE FILED BY THE REVENUE, BEING I TA N O.780/ H YD/2014 AND THE O T HER FIL E D BY THE ASSESSEE, BEING I TA NO.855/ H YD/2014, ARE CROSS APPEALS, WHICH ARE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) - III, HYDERABAD DATED 10.2.2014. I TA NO. 780 & 855 /H YD/201 4 M/S. HYCONS INFRASTRUCTURES INDIA LTD., HYDERABAD 2 REVENU E S APPEAL: 2. IN THE SOLITARY SUBSTANTIVE GROUND RAISED IN ITS APPEAL, THE R E VENU E HAS CHALLENGED THE ACTION OF THE LEARNED CIT(A) IN DELETING THE DISALLOWANCE OF R S .5,69,07,949 MADE BY THE ASSESSING OFFICER UNDER S.40(A)(IA) HOL D ING THAT THE AMENDMENT TO THE SAID PROVI S ION MADE BY THE FIN A NCE ACT, 2010 IS APPLICABLE FOR ASSESSMENT YEAR 2009 - 10, BEING RETROSPECTIVE IN NATURE. 3. THE ASSESSEE IN THE PRESENT CASE IS A COMPA N Y WHICH IS ENGAGED IN THE BUSINESS OF CIVIL CON S TRU C TION/ENGINEERING CONTRACTS. THE RETURN OF IN C OM E FOR THE YEAR U NDER CON S I D ERATION WAS FILED BY IT ON 17.11.2009, DECLARING TOTAL INCOME OF RS .1,04,56,245. FROM THE DETAILS GIVEN IN THE AUDIT REPORT ANNEXED TO THE SAID RETURN, IT WAS NOTICED BY THE ASSESSING OFFICER THAT TAX AT SOU R CE WAS DEDUCTED BY TH E ASSESSEE FROM TH E PAYMENT O F EXPENDITURE AMOUNTING TO RS .5,69,07,949, BUT THE SAME WAS PAID TO TH E CR E DIT OF THE GOVERNMEN T , AFTER THE DUE D A TE AS PRESCRIBED IN THE REL E VANT TDS PROVI S ION S . IN THI S RE G ARD, THE EXPLANATION OFFERED BY THE ASSESSEE THAT THE ENTIRE TDS HAV ING BEEN PAID BY IT BEFORE THE DUE DATE OF FIL I N G O F THE RE T U R N OF INCOME FOR THE YEAR UNDER CON S I D ERATION, NO DI S ALLO W ANCE UNDER S.40(A)(IA) WAS CALLED FOR IN VIEW OF THE AMENDMENT MADE TO THE SAID PROVISION BY THE FINANCE ACT, 2010 WAS NOT FOUND ACCEPTABLE BY THE ASSESSING OFFICER. ACCOR D ING TO HIM, THE SAID AMENDMENT HAVING B E EN MADE BY TH E FIN A NCE ACT, 2010 WITH E FFECT FROM 1.4.2010 , WAS APPLICABLE FROM 2010 - 11 AND NO T TO THE YEAR UNDER CONSIDERATION, VIZ. ASSESSMENT YEAR 2009 - 10. HE , TH E R E FORE, MADE A DISALLOWANCE OF R S .5,69,07,949 BY INVOKING THE PROVISIONS OF S.40(A)(IA) . I TA NO. 780 & 855 /H YD/201 4 M/S. HYCONS INFRASTRUCTURES INDIA LTD., HYDERABAD 3 4. ON APPEAL, THE LEARNED CIT(A) DELETED THE SAID DISALLOWANCE FOLLO W IN G INTER ALIA THE DECISION OF THE H Y D ERABAD B ENCH OF THE TRIBUN A L RENDERED IN THE CASE OF DCIT V/S. IVRCL INFRA STRUCTURES & PROJECTS LTD. (ITA N O.1220/HYD/203) DATED 20.12.2013. 5. WE HAVE H EA RD THE ARGUMENTS OF BO T H THE SIDES AND PERUSED THE RELEVANT MATERIAL ON RECORD. AS AGREED BY THE LEARNED REPRESENTATI V ES OF BOTH THE SIDES, THE ISSUE INVOL V ED I N THIS APPEAL OF THE REVENUE REL A TING TO DISALLO W ANCE UNDER S.40(A)(IA) IS SQUARELY COVERED IN FAVOU R O F THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL RENDERED IN THE CASE OF IVRCL I NFRASTRUCTURE & PROJECTS L TD. (SUPRA), WHEREIN A SIMILAR DISALLOWANCE MADE UNDER S.40(A)(IA) WAS HELD TO BE UNSUSTAINABLE BY THE TR IBUNAL FOLLO W IN G ITS EARLIER DECISION IN THE CA S E OF ADIT V/S. NIPPON JOGESUIDO SEKEI CO. LTD. IN I TA N O.726/ H YD/2013 DATED 6.12.2013, WHEREIN IT WAS HELD AS UNDER - 'WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS ON RECORD AS WELL AS GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. AS HELD BY THE DELHI HIGH COURT IN THE CASE OF CIT VS. RAJINDER KUMAR IN INCOM E TAX APPEAL NO. 65/2013 DATED 1ST JULY, 2013, THE IMPUGNED AMENDMENT TO SECTION 40(A)(IA) PERMITS REMITTANCE OF TDS TO THE CENTRAL GOVERNMENT ACCOUNT ON OR BEFORE THE DUE DATE OF FILING RETURN OF INCOME U/S. 139(1) OF THE ACT IS RETROSPECTIVE IN NATURE. S AME VIEW HAS BEEN TAKEN BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. PEC ELECTRICALS PVT. LTD., IN ITA NO. 263 OF 2013 DATED 12.7.2013. THE ASSESSEE IN PRESENT CASE PAID THE TDS TO THE CENTRAL GO VERNMENT ACCOUNT BEFORE FILING THE RETURN OF INCOME AND THE SAME IS TO BE ALLOWED AS HELD BY THE ABOVE JUDGMENTS. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ACTION OF THE CIT(A) IN DIRECTING THE ASSESSING OFFICER TO DELETE THE ADDITION MADE U/S 40(A) (IA) OF THE ACT AND, THEREFORE, THE ORDER OF THE CIT(A) IS HEREBY UPHELD ON THIS COUNT. THE GROUNDS RAISED BY THE REVENUE IN THIS REGARD ARE DISMISSED.' I TA NO. 780 & 855 /H YD/201 4 M/S. HYCONS INFRASTRUCTURES INDIA LTD., HYDERABAD 4 6. AS THE ISSUE INVOLVED IN THE PRESENT CA S E AS WELL AS ALL THE M AT ERIAL FACTS RELEVANT THERETO ARE SIMILAR TO THE CA S ES OF IVRCL INFRASTRUC T URE & PROJ E CTS L TD. (SUPRA) AND NIPPON JOGESUIDO SEKEI CO. L TD. (SUPRA), WE RESPECTFULLY FOLLOW THE DECISION S O F THE COORDINATE BENCH OF THE TRIBUNAL RENDERED IN THE SAID CA S ES AND UPHOLD THE IMPUGNED ORDER O F THE LEARNED CIT(A) DELETING THE DISALLOWANCE M ADE BY TH E ASSESSING OFFICER, HOL D IN G THAT THE AMENDMENT MADE BY THE FINAN C E ACT, 2010 IS APPLICABLE TO ASSESSMENT YEAR 2009 - 10 AL S O, BEING R E TROSPECTIVE IN NATURE. T HE A PP E AL O F THE R E VENUE IS ACCORDINGLY D ISMISSED. ASSESSEES APPEAL: 7. IN ITS APPEAL, THE ASSESSEE HAS RAISED A SOLITARY ISSUE RELATING TO THE ADDITION OF R S .28,36,026 MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT(A) BY WAY OF DISALLOWANCE MADE ON ACCOUNT OF SALES TAX LI A BILITY . 8. IN THE COMPUTATION OF TOTAL INCOME, A SUM OF R S .75,65,048 HAD BEEN ADDED BACK BY THE ASSESSEE TO THE PROFIT DECL A RED AS PER THE PROFIT & LOSS ACCOUNT. DURIN G THE COU R SE OF ASSESSMENT PROCEEDINGS, A LETTER DA T ED 5.9.2011 W AS FIL E D BY T H E ASSESS EE STATING THA T THE SAID AMOUNT WAS INCLUSIVE OF A SUM OF RS.28,36,026 PERTAINING TO WORKS CONTRACT TAX LIABILITY, WHICH HAD ARISEN DURING THE Y E AR CONSIDERATION AS A CON SE QUENCE OF COMPLETION OF SALES TAX ASSESSMENT. THE ASSESSEE CLAIMED THAT THE SAID AM OUNT SHOULD , THEREFORE , BE ALLOWED AS DE D UC T ION IN THE YEAR UNDER CON S I D ERATION, AS THE LIABILITY FOR WORKS CONTRACT TAX HAD ARISEN IN THAT Y E AR. ALTHOUGH THE ASSESSEE FILED A COPY OF THE RELEVANT SAL E S TAX ASSESSMENT ORDER IN SUPPO R T OF ITS CL A IM, THE ASSESSING OFFICER NOTED THAT THERE WAS FAILURE ON THE P A RT OF THE I TA NO. 780 & 855 /H YD/201 4 M/S. HYCONS INFRASTRUCTURES INDIA LTD., HYDERABAD 5 ASSESSEE TO ADDUCE ANY EVIDENCE TO SHOW THE ACTUAL PAYMENT OF SALES TAX IN THE YEAR UNDER CON S I D E R ATION EITHER IN THE FORM OF CHALLAN OR CERTIFICATE ISSUED BY THE CONCERNED SALES TAX AUTHORI TIES. HE THER E FORE, DID NO T ALLOW THE CLAIM O F TH E ASSESSEE FOR DEDUCTION OF R S .28,36,026, PERTAINING TO WORKS CONTRACT TAX LIABILITY. 9. ON APPEAL, THE LEARNED CIT(A) CONFIRMED THE DISALLOWANCE MA D E BY TH E ASSESSING OFFICER ON THIS ISSUE OBSERVING THAT ALTHOUGH IT WAS STA T ED ON BEHALF O F THE ASSESSEE BEFORE HIM THAT IT COULD P R O D UCE THE EVIDENCE SHOWING THE PAYMENT O F TAX DURING THE YEAR UNDER CON S I D E R ATION, TH E SAME WAS ACTUALLY NOT PRODUCED. 10. WE HAVE HEARD THE ARGUM E N T S OF BOTH SIDES AND ALSO PER USED THE REL EV ANT MATERIAL ON R ECORD. AS SUBMITTED BY THE LEARNED C OUN S EL FOR THE ASSESSEE , NO PROPER AND SUFFI CI ENT OPPORTUNITY WAS GIVEN EITHER BY THE ASSESSING OFFICER OR BY THE LEARNED CIT(A) TO PRODUCE THE RELEVANT EVIDENCE EITHER IN THE FORM OF CHAL LAN OR A CERTIFICATE ISSUED BY THE CONCERNED SALES TAX AUTHO R ITY TO SHOW THAT THE RELEVANT TAX LIABILITY WAS ACTUALLY PAID DURIN G THE YEAR UNDER COSNDIERAT.ION. HE HAS SUBMITTED THAT THE ASSESSEE HAS ACTUALLY PAID A SUM OF RS .14.15 LAKHS AGAINST THE SAID LIABILITY DURING THE Y E AR UNDER CON S I D ERATION AND AN OPPOR T U N ITY MAY B E GIVEN TO TH E ASSESSEE TO P R O D U C E THE DOCU MENT ARY EVIDENCE IN SUP P O R T OF THE SAID PAYM E NT F OR VERIFICATION BY THE ASSESSING OFFICER. SIN C E THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NO T RAISED ANY OBJECTION IN THIS REGARD, WE SET ASIDE THE IMPUGNED ORDERS OF THE REVENUE AUTHORITIES ON THIS ISSUE AND RESTORE THE MATTER TO THE FIL E O F TH E ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE SA M E AFRESH AFTER GIVING ASSESSEE A PROPER AND SUFFI CIENT OPPORTUNITY TO PRODUCE THE P R OOF OF PAYMENT OF SALES TAX LIABILITY. I TA NO. 780 & 855 /H YD/201 4 M/S. HYCONS INFRASTRUCTURES INDIA LTD., HYDERABAD 6 THE APPEAL OF THE ASSESSEE IS ACCORDINGLY TRE A TED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, THE APPEAL O F THE R E VENUE IS DISMISSED, WHEREAS THE APPEAL O F THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 12 TH SEPTEMBER, 2014 SD/ - SD/ - ( SAKTIJIT DEY ) ( P.M.JAGTAP ) JUDICIAL MEMBER ACCOUNTANT MEMBER DT/ - 12 TH SEPTEMBER, 2014 COPY FORWARDED TO: 1. M/S. HYCONS INFRASTRUCTURES INDIA LTD., ELEGANT APARTMENTS, FLAT NO.301, PLOT NO.4 & 5, 6 - 3 - 1238, ASIF AVENUE, RENUKA NAGAR, SOMAJIGUDA, HYDERABAD 500 082. 2 . DY. COMMISSIONER OF INCOME - TAX CIRCLE 2(2) , HYDERABAD 3. 4. COMMISSIONER OF INCOME - TAX(APPEALS) III, HYDERABAD COMMISSIONER OF INCOME - TAX II , HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S