The ITO, Ward-4(3), Ahmedabad V. L.V.J.Products Pvt.Ltd., Ahmedabad

ITA 799/AHD/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2185 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-07-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 19-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: M K PATEL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEM BER INCOME TAX OFFICER, WARD-4(3), OFF. ASHRAM ROAD AHMEDABAD (APPELLANT) VS L.V.J. PROJECTS PVT. LTD 3 RD FLOOR, PRITAMNAGAR, ELLISBRIDGE, AHMEDABAD-380006 PAN: AAACL2741G (RESPONDENT) REVENUE BY: SRI P.L. KUREEL, SR.D.R. ASSESSEE BY: SRI M.K. PATEL, A.R. DATE OF HEARING : 23-07-2013 DATE OF PRONOUNCEMENT : 23-07-20 13 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THIS IS THE REVENUES APPEAL AGAINST THE ORDER OF LD. CIT(A)-III AHMEDABAD DATED 21-12-2012. 2. THE ASSESSING OFFICER WHILE MAKING THIS ADDITION OF RS. 45,17,826/- U/S 40(A)(IA) OF THE ACT HAS OBSERVED AS UNDER:- ITA NO. 799/AHD/2013 ASSESSMENT YEAR 2006-07 I.T.A NO. 799AHD/2013 A.Y. 2006-07 PAGE N O ITO VS. LVJ PROJECTS PVT. LTD. 2 'IN THIS CASE THE ASSESSEE HAD DEDUCTED RS.6,93,548 /- INSTEAD OF ACTUAL DEDUCTIBLE TDS OF RS 7,44,234/-, ON THE SUBS EQUENTLY DEDUCTED THE ABOVE MENTIONED TDS AMOUNT AND DEPOSITED INTO G OVT A/C, ON 28/04/2006. 4. WHEN ASKED EXPLAIN THE MATTER, ASSESSEE HAS SUB MITTED HIS REPLY DATED 07/12/2011 WHICH IS PLACED ON THE RECOR D ASSESSEE VIDE PARA - 2 OF HIS REPLY DATED 07/12/2011 HAS STATED T HAT 'AS REGARDS TO THE QUERY OF YOUR HONOUR IN RESPECT OF DISALLOWANCE OF LABOUR EXPS, OF RS 45,17,826/-, THE ASSESSEE IS SUBMITTING THE FOLLOWING EXPLANATION/JUSTIFICATION. THE ASSESSEE COMPANY HAS DEDUCTED TDS FROM SUB CONT RACTOR @ 1 .05% INSTEAD OF @ 1.122 % UP TO THE MONTH OF FE BRUARY, 2006 AND THE DIFFERENCE OF 0.072 % WAS DEDUCTED IN THE M ONTH MARCH, 2006 AND PAID ON 23/04/2006. HENCE THE ASSESSEE HAS DEPO SITED THE AMOUNT OF TAX AS AND WHEN DEDUCTED AND REQUIRED TO BE DEPO SITED IN TO THE ACCOUNT OF CENTRAL GOVERNMENT' 5. A SHOW-CAUSE NOTICE WAS ISSUED ON 08/12/20 11. THE AUTHORIZED REPRESENTATIVE ATTENDED AND SUBMITTED A REPLY DATED 09/12/2011, WHICH IS PLACED ON THE RECORD. 6. REPLY OF THE ASSESSEE IS DULY CONSIDERED BUT NO T FOUND ACCEPTABLE. IN PARA (2) OF HIS REPLY DATED 09/12/20 11, ASSESSEE HAS QUOTED A DECISION OF HON'BLE ITAT IN CASE OF DCIT V /S. S.K. TEKRIWAL. IT IS WORTH MENTIONING HERE THAT IN THIS CASE THE M AIN ISSUE IS ABOUT SHORT DEDUCTION OF TDS ONLY. WHERE AS IN THE PRESEN T CASE, ASSESSEE HAS DEDUCTED TAX UP TO FEB.2006 BUT FAILED TO DEPOS IT THE SAME WITHIN PRESCRIBED TIME LIMIT INTO GOVT. ACCOUNT FOR EXAMPL E, TDS OF RS 10,431/- WAS MADE ON 25/08/2005 FROM THE PAYMENT MA DE TO MARUTI CONSTRUCTION COMPANY. FROM THE VERIFICATION OF ALL CHALLANS FOR PAYMENTS MADE AND TDS PAYABLE A/C, IT CAN BE SEEN T HAT OUT OF THIS TDS DEDUCTED, NO AMOUNT WAS PAID INTO GOVT A/C UPTO 31/03/2006. SIMILARLY, AN AMOUNT OF RS.29,796/- WAS DEDUCTED ON 02/02/2006 AS TDS FROM MARUTI CONSTRUCTION COMPANY AGAIN BUT WAS NOT DEPOSITED INTO GOVT. A/C. UP TO 31/03/2006. I.T.A NO. 799AHD/2013 A.Y. 2006-07 PAGE N O ITO VS. LVJ PROJECTS PVT. LTD. 3 7. THEREFORE, THE UNDERSIGNED IS SATISFIED THAT ASS ESSEE HAS DEFAULTED THE PROVISIONS OF TDS. ACCORDINGLY RELAT ED PAYMENT OF RS. 45,17,826/- (RS. 6,63,36,297/-* 50686/744234) IS DI SALLOWED AND ADDED BACK TO THE TOTAL INCOME F THE ASSESSEE. 3. AFTER TAKING INTO CONSIDERATION THE SUBMISSION O F THE ASSESSEE LD. CIT(A) DELETED THIS ADDITION BY OBSERVING AS UNDER: - 2.3. I HAVE CONSIDERED THE FACTS OF THE CASE, IN T HIS CASE THE APPELLANT HAD DEDUCTED RS 6,93,548/- INSTEAD OF ACTUAL DEDUCT IBLE TDS OF RS.7,44,234/-. THE APPELLANT HAS ON SUBSEQUENT DATE S DEDUCTED THE ABOVE MENTIONED DIFFERENCE OF TDS AMOUNT AND DEPOSI TED INTO GOVT A/C. ON 28/04/2006. THE AO HAS HELD THAT THE APPELL ANT HAS FAILED TO DEPOSIT THE DEDUCTED TAX TO THE CREDIT OF GOVT'S AC COUNT BEFORE THE LAST DAY OF THE FINANCIAL YEAR IN WHICH THE TAX WAS DEDU CTIBLE AND ADDED THE AMOUNT THE AMOUNT OF RS. 45,17,826/- U/S. 40(A) (IA) OF THE ACT. THE APPELLANT HAS SUBMITTED THAT THE COMPANY HAS DE DUCTED TDS FROM SUB CONTRACTOR @ 1.05% INSTEAD OF @ 1.122 % UP TO T HE MONTH OF FEBRUARY, 2006 AND THE DIFFERENCE OF 0.072 % WAS DE DUCTED IN THE MONTH OF MARCH, 2006 WHICH PAID ON 28/04/2006. HENC E, THE APPELLANT HAS DEPOSITED THE AMOUNT OF TAX AS AND WH EN DEDUCTED AND REQUIRED TO BE DEPOSITED INTO THE ACCOUNT OF CENTRA L GOVERNMENT. THE APPELLANT HAS SUBMITTED THAT THE AMENDMENT IN SEC.4 0(A)(IA) BY FINANCE ACT 2010 W.E.F. 01.04.2010 WHICH PROVIDES T HAT NO DISALLOWANCE SHOULD BE MADE IF TDS WAS PAID BEFORE THE DUE DATE OF FILING OF THE RETURN SHOULD BE HELD TO BE RETROSPEC TIVE IN NATURE. THIS VIEW/SUBMISSION OF THE APPELLANT IS NOW UPHELD BY T HE DECISION OF HON'BLE CALCUTTA HIGH COUNT IN THE CASE OF CIT VS. VIRGIN CREATIONS BY ORDER DATED 23.11.2011 (CIVIL NO. ITAT 302 OF 2011/GA/3200/2011) AND WHICH HAS ALSO BEEN APPLIED IN AN IDENTICAL SITUATION BY 'B' BENCH OF AHMEDABAD ITAT IN THE CAS E OF M/S. ZAM ZAM EXPORTS LTD- IN ITA NO.3258/AHD/2009 FOR ASST. YEAR 2006-07. IF THERE IS A SHORTFALL OF THE TDS DEDUCTED, THE APPEL LANT MAY BE TREATED AS A DEFAULTER U/S.201 BUT NO DISALLOWANCE CAN BE M ADE U/S : 40(A)(IA) OF THE IT ACT. IN VIEW OF THE ABOVE DISCUSSION AND SUBMISSION AND FOLLOWING THE ABOVE DECISIONS, THE AO IS DIRECTED T O DELETE THE SAME ADDITION. THE GROUND OF THE APPELLANT IS ALLOWED. I.T.A NO. 799AHD/2013 A.Y. 2006-07 PAGE N O ITO VS. LVJ PROJECTS PVT. LTD. 4 SINCE LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE B Y PLACING RELIANCE ON THE DECISION OF CALCUTTA HIGH COURT IN THE CASE OF CIT VS. VIRGIN CREATIONS BY ORDER DATED 23.11.2011 (CIVIL NO. ITAT 302 OF 2111/ GA/3200/2011) AND WHICH HAS BEEN FOLLOWED BY AHMEDABAD ITAT IN THE CA SE OF M/S ZAM ZAM EXPORTS LTD. IN ITA NO. 3258/AHD/2009 WE ARE NOT IN CLINED TO INTERFERE WITH THE ORDER PASSED BY LD. CIT(A) AND THE SAME IS HERE BY UPHELD. 4. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (T.R. MEENA) ( D.K. TYAGI) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD : DATED 23/07/2013 AK / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '#