ACIT, Jaipur V. SHRI SHAILENDRA GARG, Jaipur

ITA 804/JPR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5069 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 23-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATEJA CIT DHK
• Assessee Lawyers: ANIL KR SHARMA

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO ] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 804/JP/15 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR CUKE VS. SHRI SHAILENDRA GARG, C/O M/S GARMENT CRAFT INDIA (P) LTD. F-47, MALVIYA INDUSTRIAL AREA, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ACQPG 4440 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI ANIL KR. SHARMA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI O.P. BATEJA ( ADDL. CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27.09.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 27/09/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-II, JAIPUR DATED 24.09.2014 WHEREIN THE REVENUE HAS TAK EN FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT (A) HAS ERRED IN : (1.1) DELETING THE DISALLOWANCE MADE BY THE AO U/S 40(A)(IA) BY TREATING THE DISCOUNT SHOWN BY THE ASSESSEE AS COMMISSION AND FO R NOT DEDUCTING TDS ON THE SAME U/S 194H OF THE IT ACT, 1961. (1.2) HOLDING THAT THERE WAS RELATIONSHIP OF SELLER AND BUYER WHEREAS THE AO HAS SPECIFICALLY DISCUSSED THIS ISSUE WHEREIN THE ADDITION WAS MADE ONLY ITA NO/ 804/JP/15 ACIT, CIRCLE-6, JAIPUR VS. SHRI SHAILENDRA GARG, JA IPUR 2 TO THE EXTENT WHEREIN THE COMMISSION WAS PAID ON BO OKING OF ADVERTISEMENT SPACE. (2) DELETING ADDITION OF RS. 7,25,672/- MADE ON ACC OUNT OF DEPOSITING THE PF/ESI PAYMENT BEYOND THE PRESCRIBED TIME DESPITE T HE FACT THAT AS PER SECTION 36(1)(VA) EMPLOYEES CONTRIBUTION SHOULD HAV E BEEN DEPOSITED IN TIME AS PRESCRIBED IN THE RELEVANT LAW. SECTION 43 B PERMITS DELAYED PAYMENT IS PAID BEFORE FILING OF OI AS PER SECTION 139(1) IN CASE OF EMPLOYERS CONTRIBUTION NOT IN THE CASE OF EMPLOYEE S CONTRIBUTION. 2. IN GROUND NO.1, THE LD. CIT(A) HAS GIVEN HIS FIN DINGS AS UNDER: I HAVE PERUSED THE FACTS OF THE CASE, ASSESSMENT OR DER AND THE SUBMISSIONS OF THE APPELLANT. IT HAS BEEN STATED B Y THE APPELLANT THAT THIS ISSUE IS COVERED IN HIS FAVOUR BY THE ORDER OF THE CIT(A)-II, JAIPUR IN THE CASE OF THE (LATE) FATHER OF THE APPELLANT S HRI BHIM SAIN GARG IN A.Y. 2007-08 & 2008-09 AND ALSO IN THE CASE OF THE APPELLANT IN A.Y. 2009-10 (APPEAL NO. 523/11-12 DATED 07.12.2012). I N THESE APPEAL ORDERS, THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT BY RELYING UPON THE DECISION OF THE ITAT, CUTTACK BENCH IN THE CASE OF ACIT VS. SAMAJ (2001) 77 ITD 358 WHEREIN THE ITAT HELD THAT THIS PAYMENT TO ADVERTISEMENT AGENCIES WAS NOT COVERED U/S 194H SIN CE THIS TRANSACTION BETWEEN THE ASSESSEE AND AGENCIES WAS ENTERED INTO ON A PRINCIPAL TO PRINCIPAL BASIS. RESPECTFULLY FOLLOWING THE ABOVE ORDERS, THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLO WANCE U/S 40(A)(IA) IS NOT SUSTAINED AS THE RELATIONSHIP OF THE APPELLANT WITH THE ADVERTISEMENT AGENCIES IS ONE OF SELLER AND BUYER R ESPECTIVELY AND THE DISCOUNT GIVEN TO THE ADVERTISING AGENCIES IS NOT COMMISSION OR BROKERAGE WITHIN THE MEANING OF SECTION 194H. THI S GROUND IS ALLOWED. 2.1 IT IS NOTED THAT THE COORDINATE BENCH VIDE ITS ORDER IN APPEAL NO. 325/JP/12 DATED 13.02.2015 IN CASE OF THE APPELLANT S FATHER FROM WHOM THE APPELLANT HAS INHERITED THE BUSINESS HAS DECIDED TH E ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT FINDINGS ARE AS UNDER: IN THE CONSIDERATION OF ENTIRETY OF FACTS AND CIRC UMSTANCES, WE HOLD THAT THE AMOUNT PAID BY WAY OF DISCOUNT TO THE ADVERTISE MENT AGENCIES, SPRINGS FROM A RELATIONSHIP ON PRINCIPAL TO PRINCIP AL BASIS AND DOES NOT CONSTITUTE COMMISSION AS CONTEMPLATED BY PROVISIONS OF SECTION 194H OF ITA NO/ 804/JP/15 ACIT, CIRCLE-6, JAIPUR VS. SHRI SHAILENDRA GARG, JA IPUR 3 THE ACT. IN VIEW THEREOF, WE SEE NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN HOLDING THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT ARE NOT APPLICABLE AND THEREBY DELETING THE DISALLOWANCES. THE ORDER OF THE LD. CIT(A) IS UPHELD. 2.2 WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. UNDISPUTEDLY, TH ERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE LD CIT(A) HAS ALLOWED THE RELIEF FOLLOWING THE PAST ASSESSMENT YEARS WHERE THE MATTER HAS BEEN DECIDED IN FAVOUR OF THE APPELLANTS FATHER FROM WHOM THE ASSESSEE HAS INHER ITED THE SAME BUSINESS. BY RESPECTFULLY FOLLOWING THE DECISION OF THE COORD INATE BENCH REFERRED SUPRA, WE SEE NO INFIRMITY IN THE ORDER OF LD CIT(A). THE REVENUES GROUND IS DISMISSED. 3. IN RESPECT OF GROUND NO.2, THE LD. CIT(A) HAS GI VEN HIS FINDINGS STATING THAT ADMITTEDLY, ESI AND PF CONTRIBUTION HAS BEEN PAID BY THE APPELLANT, IN ALL INSTANCES, BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME U/S 13(1). THIS FACT IS THEREFORE, NOT IN DISPUTE. IN VIEW OF THE JUDGEMENTS OF THE RAJASTHAN HIGH COURT IN THE CASE JAIPUR VIDHYUT VITHRAN NIGA M LTD. 265 CTR 62 (RAJ), CIT VS. STATE BANK OF BIKANER AND JAIPUR (2014)99 DTR 1 31 (RAJ.) AND OTHER CASE LAWS ON THIS ISSUE, THE CLAIM OF THE APPELLANT IS ALLOWABLE. WE SEE NO INFIRMITY IN THE ORDER OF LD CIT(A). THE REVENUES GROUND IS DISMISSED. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DI SMISSED. ITA NO/ 804/JP/15 ACIT, CIRCLE-6, JAIPUR VS. SHRI SHAILENDRA GARG, JA IPUR 4 ORDER PRONOUNCED IN THE OPEN COURT ON 27/09 /2016. SD/- SD/- ( KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 27/09/2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CIRCLE-6, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- SHRI SHAILENDRA GARG, JAIPUR 3. VK;DJ VK;QDR@ CIT II, JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-II, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.804 /JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR