EDROOS SYED MOHAMMED ZAKIR, MUMBAI V. ACIT CIR 13(3), MUMBAI

ITA 81/MUM/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9333 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 06-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 04-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA
• Keywords: Question of law; Non-deduction of tax
• Section: 194C

Judgement Text

, BZ BZBZ BZ INCOME TAX APPELLATE TRIBUNAL,MUMBAI - E BENCH , ! ' ' ' ' #$ , # ! BEFORE S/SH.JOGINDER SINGH, JUDICIAL MEM BER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO.81/MUM/2012, % % % % & & & & / ASSESSMENT YEAR-2008-09 EDROOS SYED MOHAMMED ZAKIR, 13, M.A. SARANG MARG, DONGRI, MUMBAI-400009 PAN: AADPE2591D % VS. ACIT CIR 13(3), AAYAKAR BHAVAN, M.K.MARG, MUMBAI-400020 ( '( / APPELLANT) ( )*'( / RESPONDENT) % +, % +, % +, % +, - - - - # ## # / ASSESSEE BY :SHRI PRAKASH PANDIT ! . - # / REVENUE BY : SHRI VIJAY KUMAR BORA % % % % . .. . , / , / , / , / / DATE OF HEARING :04 -02-2015 0& . , / / DATE OF PRONOUNCEMENT :04 -02-2015 % % % % , 1961 . .. . 254(1) # ## # , , , ,, ,, , #1 #1 #1 #1 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, A.M. # ! #$ # % : CHALLENGING THE ORDER DATED 24.10.2011 OF THE CIT(A )-24, MUMBAI, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY A. O. OF RS. 11,05,234/- BY AP PLYING PROVISIONS OF SEC.40(I)(IA) R/W. SEC.200 OF THE INCOME TAX ACT 1961 TO THE GROSS FEES DIVERT ED AT SOURCE BY THE APPELLANT FROM THE FEES PAYABLE TO THE PRINCIPAL TREATING THE SAME AS COMMI SSION WITHIN THE MEANING OF SEC.194H OF THE INCOME TAX ACT 1961. 2. THE REASONS GIVEN BY THE LEARNED CIT(A) FOR CONF IRMING THE ADDITION MADE BY THE OF RS. 11,05,2341- BY APPLYING PROVISIONS OF SEC.40(I)(IA) R/W. SEC.200 OF THE INCOME TAX ACT 1961 TO THE GROSS FEES DIVERTED AT SOURCE BY THE APPELLANT FROM THE FEES PAYABLE TO THE PRINCIPAL TREATING THE SAME AS COMMISSION WITHIN THE MEANING OF SEC.194H O F THE ACT, ARE WRONG, INSUFFICIENT AND CONTRARY TO THE FACTS AND EVIDENCE ON RECORD. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION MADE BY THE A. O. OF RS. 26,75,257/- B Y APPLYING PROVISIONS OF SEC.40(I)(IA) R/W. SEC.200 OF THE INCOME TAX ACT 1961 IN RESPECT OF CO MMISSION, PROFESSIONAL FEES, CONTRACTUAL PAYMENTS ETC, THOUGH THE TOS WAS DEDUCTED AND PAID TO THE GOVERNMENT TREASURY AS PER THE PROVISIONS OF CHAPTER XVII 4. THE REASONS GIVEN BY THE LEARNED CIT (A) FOR CON FIRMING THE ADDITION MADE BY THE A. O. OF RS. 26,75,257/- BY APPLYING PROVISIONS OF SEC.40(I)(IA) R/W. SEC.200 OF THE INCOME TAX ACT 1961 IN RESPECT OF COMMISSION, PROFESSIONAL FEES, CONTRACTU AL PAYMENTS ETC, THOUGH THE TDS WAS DEDUCTED AND PAID TO THE GOVERNMENT TREASURY AS PER THE PROV ISIONS OF CHAPTER XVII, ARE WRONG, INSUFFICIENT AND CONTRARY TO THE FACTS AND EVIDENCE ON RECORD. 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, MODIFY OR OMIT ANY OF THE AFORESAID GROUNDS OF APPEAL AS OCCASION MAY ARISE OR DEMAND. ASSESSEE,AN INDIVIDUAL,DERIVING INCOME FROM RUNNING INSTITUTE OF MANAGEMENT STUDIES AND COMPU -TER COURSES, FILED HIS RETURN OF INCOME ON 31.10.2 006 DECLARING INCOME OF RS. 2.33 LAKHS. THE ASSESSING OFFICER(AO) COMPLETED THE ASSESSMENT ON 2 0.12.2008 DETERMINING THE INCOME OF THE ASSESSEE AT RS. 40.25 LAKHS. 2. THE FIRST EFFECTIVE GROUND OF APPEAL (GS.OA 1 & 2)D EALS WITH THE ADDITION MADE BY THE AO, AMOUNTING TO RS. 11.05 LAKHS,AS PER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT.DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE ASSESS EE HAD DEBITED RS. 30.30 LAKHS UNDER THE 2 ITA NO. 81/M/2012 EDROOS SYED MOHAMMED ZAKIR HEAD COMMISSION PAID,THAT TAX WAS DEDUCTED AT SOURC E ONLY ON AN AMOUNT OF RS. 19.28 LAKHS. HE DIRECTED THE ASSESSEE TO EXPLAIN AS TO WHY TAX WAS NOT DEDUCTED ON BALANCE AMOUNT OF RS. 11.02 LAKHS AND AS TO WHY SAID AMOUNT SHOULD NOT BE DISAL LOWED U/S.40(A)(IA) OF THE ACT.IT WAS ARGUED BY THE ASSESSEE THAT HE HAD NOT DEDUCTED THE TAX AS THE SAID PAYMENT WERE MADE BY THE AGENTS APPOINTED BY THE PRINCIPLE AS PER THE TRIPARTITE AG REEMENT ENTERED INTO AMONG THE SAID AGENTS THE PRINCIPLE AND THE ASSESSEE, THAT THE FIRST APPELLAT E AUTHORITY (FAA) HAD ALLOWED THE SAME ISSUE IN FAVOUR OF THE ASSESSEE IN EARLIER AY.THE AO DID NOT FIND THE CONTENTION OF THE ASSESSEE ACCEPTABLE AND HELD THAT THE RESPONSIBILITY TO PAY COMMISSION TO THE AGENTS WAS THAT ON ASSESSEE AND NOT OF THE PRINCIPLE,THAT HE WAS REQUIRED TO DEDUCT TAX AT SOURCE ON THE COMMISSION PAYMENT AS PER THE PROVISIONS OF SECTION 194H OF THE ACT.AS THE ASSESS EE HAD NOT DEDUCTED TAX AT SOURCE,THE AO, DISALLOWED THE AMOUNT OF RS.11.05 LAKHS,INVOKING TH E PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA). FOLLOWING THE ORDER OF THE TRIBUNA L FOR THE EARLIER YEARS HE UPHELD THE ORDER OF THE AO. BEFORE US,AUTHORISED REPRESENTATIVE (AR) STATED THA T AFTER THE DECISION OF SPECIAL BENCH DELIVERED IN THE CASE OF MERILYN SHIPPING COMPANY (16 ITR (TR IB) 1 THE LEGAL POSITION HAD CHANGED,THAT AT THE END OF THE YEAR NOTHING WAS PAYABLE,THAT PROVIS IONS OF CHAPTER XVII B WERE NOT APPLICABLE BECAUSE PAYMENT HAS ALREADY BEEN MADE.HE RELIED UPO N THE CASES OF M/S VIVIL EXPORTS P. LTD. (ITA NO. 509/M/2011-AY 2007-08 DT. 26.02.20014) AND M/S ARCADIA SHARE & STOCK BROKERS P. LTD. (ITA NO. 1817/M/2013-AY 2006-07 DT. 22.12.2014 ). DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF THE FAA. 4 .WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL BEFORE US. WE FIND THAT IN CASE OF M/S ARCADIA SHARE & STOCK BROKERS P. LTD.(SUPRA)THE ISSUE HAS BEEN DELIBERATED UPON AND DECIDED AS UNDER: 6.WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE RECORD. WE SHALL FIRST TAKE UP THE LAST ALTERNATIVE GROUND, I.E. WHEN THE PAYMENT IS M ADE BY THE ASSESSEE WHETHER SECTION 40(A)(IA) CAN BE ATTRACTED? ON THIS ISSUE THIS VERY BENCH, IN THE CASE OF AMIT NARESH SHAH (ITA NO. 41541 MUML 2013), HAD TAKEN A CONSISTENT STAND THAT IN TH E LIGHT OF THE DECISION RENDERED BY HON'BLE SUPREME COURT, IN THE FORM OF DISMISSAL OF REVENUE' S SLP IN THE CASE OF VECTOR SHIPPING SERVICES (P) LTD. SECTION 40(A)(IA) IS NOT APPLICABLE WITH R EFERENCE TO PAYMENTS ALREADY MADE SINCE THE EXPRESSION 'PAYABLE' HAS TO BE SATISFIED FOR INVOKI NG PROVISIONS OF SECTION 40(A)(IA).THE BENCH, IN THE AFORECITED DECISION, OBSERVED IN THIS REGARD AS UNDER: - '4. BEFORE US, DEPARTMENTAL REPRESENTATIVE(DR) STAT ED THAT ORDER OF THE SPECIAL BENCH DELIVERED IN THE CASE OF MERILYN SHIPPING & TRANSPORTS (SUPRA)HA S BEEN KEPT IN ABEYANCE OF THE HON'BLE ANDHRA PRADESH HIGH COURT, THAT THE HON'BLE GUJARAT HIGH COURT HAD TAKEN A DIFFERENT VIEW. AUTHORISED REPRESENTATIVE (AR) SUPPORTED THE ORDER OF THE FAA. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT EXPENSES RELATED TO PROFESSIONAL FEES, ADVERTISEMENT AND MANAGEMENT WERE DEBITED IN P& L A CCOUNT, THAT SAME WERE PAID. THEREFORE, IN OUR VIEW, NO DISALLOWANCE U/ S 40(::::)(IA) OF THE ACT SHOULD BE MADE. WE FURTHER FIND THAT WHILE DECIDING THE APPEAL IN THE CASE OF JANAPRIYA ENGINE ERS SYNDICATE (I.T.T.A. NO. 352 OF 2014- DT. 24.06.2014) THE HON'BLE ANDHRA PRADESH HIGH COURT H AS CLARIFIED THE ISSUE OF INTERIM STAY GRANTED BY IT IN THE CASE OF MERILYN SHIPPING & TRANSPORTS (SUPRA). WE WILL LIKE TO REPRODUCE THE RELEVANT PART OF THE SAID ORDER AND SAME READS AS UNDER: '4. WE ARE OF THE VIEW THAT UNTIL AND UNLESS THE DE CISION OF THE SPECIAL BENCH IS UPSET BY THIS COURT, IT BINDS SMALLER BENCH AND COORDINATE B ENCH OF THE TRIBUNAL. UNDER THE CIRCUMSTANCES, IT IS NOT OPEN TO THE TRIBUNAL, AS R IGHTLY CONTENDED BY MR. NARASIMHA SARMA, LEARNED COUNSEL, TO REMAND ON THE GROUND OF PENDENCY ON THE SAME ISSUE BEFORE THIS COURT, OVERLOOKING AND OVERRULING, BY NECESSAR Y IMPLICATION, THE DECISION OF THE SPECIAL BENCH. WE SIMPLY SAY THAT IT IS NOT PERMISS IBLE UNDER QUASI JUDICIAL DISCIPLINE'. 3 ITA NO. 81/M/2012 EDROOS SYED MOHAMMED ZAKIR FROM THE CLARIFICATION ISSUED BY THE HON'BLE HIGH C OURT, IT IS CLEAR THAT UNTIL AND UNLESS THE DECISION OF MARILYN SHIPPING & TRANSPORT (SUPRA) IS REVERSED BY THE COURT, IT IS BINDING ON ALL THE BENCHES OF THE TRIBUNAL. WE FIND THAT HON'BLE COURT HAS HELD THAT JUDICIAL DISCIPLINE MANDATES THAT THE DECISION OF THE SPECIAL BENCH HAS TO BE FOLLOWE D BY OTHER BENCHES. AS ON TODAY, THE STAY ORDER GRANTED BY THE HON'BLE COURT HAS BEEN VACATED AND T HE ORDER OF THE SPECIAL BENCH IS BINDING ON OTHER BENCHES OF THE TRIBUNAL. THEREFORE, RESPECTFU LLY FOLLOWING THE SAME, WE HOLD THAT THE FAA WAS JUSTIFIED IN FOLLOWING THE ORDER OF MARILYN SHI PPING & TRANSPORT (SUPRA). CONSIDERING THE FACTS OF THE CASE AND THE CLARIFICATION ISSUED BY T HE HON'BLE ANDHRA PRADESH HIGH COURT ON 24.06.2014 IN THE CASE OF JANAPRIYA ENGINEERS SYNDI CATE, WE DECIDE THE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE AND CONFIRM THE ORDER OF THE FAA.' 7. REVERTING TO THE FACTS ON HAND, THE TAX AUTHORIT IES HAD NOT DISPUTED THE FACT THAT THE ASSESSEE PAID DEPOSITORY CHARGES WITHOUT DEDUCTING THE TAX A ND TAXES ARE ALREADY PAID BY THE RECIPIENT [SEE PARA 3.3 & 3.4 OF THE ORDER PASSED BY THE CIT(A)]. SINCE THE AMOUNT WAS ALREADY PAID AND THE TAXES ARE PAID BY THE RECIPIENT, IN OUR OPINION, TH E DECISION OF THE SPECIAL BENCH IN THE CASE OF MARILYN SHIPPING & TRANSPORTS (SUPRA) IS APPLICABLE AND BY FOLLOWING THE DECISION OF THE ITAT, MUMBAI BENCHES (SUPRA) WE HOLD THAT THE' TAX AUTHOR ITIES HAVE WRONGLY INVOKED PROVISIONS OF SECTION 40(A)(IA) IN THE INSTANT CASE. WE, THEREFOR E, SET ASIDE THE ORDERS PASSED BY THE TAX AUTHORITIES DISALLOWING RS.6,27,4231 -. IN THE LIGH T OF THE DECISION ON MERIT IT IS NOT NECESSARY FOR US TO DEAL WITH THE OTHER ASPECTS URGED BEFORE US S INCE THEY WILL BE OF ACADEMIC IMPORTANCE. SUFFICE TO SAY THAT DISALLOWANCE MADE BY THE AO IS NOT CALL ED FOR IN THE CIRCUMSTANCES OF THE CASE, IN THE LIGHT OF THE DECISION OF THE ITAT (SUPRA),WHICH IN TURN WAS BASED UPON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF VECTOR SHIPPING SERVIC ES (P) LTD. RESPECTFULLY FOLLOWING THE ABOVE, WE DECIDED THE GR OUND NO.1 AND 2 IN FAVOUR OF THE ASSESSEE. 5 .NEXT EFFECTIVE GROUND(GS.OA3&4)DEALS WITH ADDITION MADE BY THE AO OF RS. 22.75 LAKHS. DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THA T ASSESSEE HAD DEFAULTED IN PAYMENT OF TDS, THAT HE HAD NOT DEDUCTED TAX AT SOURCE @ 10.30% AS REQUIRED BY SECTION 194H OF THE ACT IN RESPECT OF THE COMMISSION PAYMENTS, THAT TAX WAS DEDUCTED O N GROSS AMOUNT WITH REGARD TO THE EXPENSES LIKE ADVERTISEMENT, PROFESSIONAL FEES AND PAYMENT T O CONTRACTORS. IT WAS CONTENDED BEFORE HIM THAT THE ASSESSEE HAD DEDUCTED TAX AT SOURCE ON COMMISSI ON @ 5.10%, THAT HE WAS IGNORANT ABOUT CHANGE OF LAW REGARDING ON WHICH TAX WAS REQUIRED T O BE DEDUCTED AT SOURCE. THE AO DISALLOWED EXPENDITURE OF RS. 26.75 LAKHS INVOKING THE PROVISI ONS OF SECTION 40(A)(IA) OF THE ACT. 6. AGGRIEVED BY THE ORDER OF THE FAA. AFTER SUBMITTING THE INSTRUCTION OF THE ASSESSEE, ORDER OF THE FAA HELD THAT THERE WAS SHORT FALL IN DEDUCTION AT SOURCE ON VARIOUS ITEMS OF EXPENDITURE, HE DEFAULTED THE SHORT DEDUCTION AS UNDER: SECTION PARTICULARS NAMES RATE AS PER I.T.ACT NET AMOUNT (RS. TDS DEDUCTED BY ASSESSEE (AS CLAIMED) (RS.) GROSS AMOUNT TDS REQUIRED TO BE DEDUCTED AS PER I.T.ACT. (RS.) 194H COMMISSION ALLANDDIN VIRAJNI 10.30 46,370 4,776 51,146 5,268 194H COMMISSION AMAR TRAVELS 10.30 10,88,120 1,12,124 12,00,244 1,23,625 194H COMMISSION JMV STUDY OVERSEAS 10.30 6,14,061 63,248 6,77,309 69,762.82 194C AD AGENCY RIGHT SOURCE 1.03 5,37,984 5,541 5,43,521 5,598.30 194J PROFESSIONAL FEES CHANDBHAY JESSOB 10.30 80,000 8,240 88,240 9,088.72 4 ITA NO. 81/M/2012 EDROOS SYED MOHAMMED ZAKIR 194C CONTRACTOR SECURITY CHARGES 2.06 1,12,476 2,317 1,14,793 2,364.73 THE FAA HELD THAT ASSESSEE HAD NOT DEDUCTED TAX AND HAD NOT PAID AS PER CHAPTER XVII, THAT THE AO WAS JUSTIFIED IN DISALLOWING THE AMOUNT IN QUEST ION. BEFORE US,AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT THERE WAS SMALL SHORT DEDUCTION OF TAXES,THAT FOR SHORT DEDUCTION OF TAXES PROVISIONS OF SECTION 40(A)(IA) COULD NOT BE APPLIED. HE RELIED UPON THE ORDERS OF 1. PREMIER MEDICAL SUPPLIERS & STORES 53 SOT 263 (KOLK ATA) 2. S.K.TEKRIWAL 48 SOT 515(KOLKATA) 3. CHANDABHOY & JASSOBHOY 49 SOT 448(MUMBAI) 4. EGS SUREY P. LTD. ITA NO. 6281/M/11 DR SUPPORTED THE ORDER OF THE FAA. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT IN THE CASE OF S.K.TEKRIWAL(SUPRA) SIMILAR ISSUE HAS BEEN DECID ED IN FAVOUR OF THE ASSESSEE AND THE ORDER OF S.K.TEKRIWAL HAS BEEN UPHELD BY THE HON'BLE HIGH CO URT OF KOLKATA. IN THE PRESENT CASE BEFORE US THE ASSESSEE HAS DEDU CTED TAX U/S. 194C(2) OF THE ACT BEING PAYMENTS MADE TO SUB-CONTRACTORS AND IT IS NOT A CASE OF NON -DEDUCTION OF TAX OR NO DEDUCTION OF TAX AS IS THE IMPORT OF SECTION 40A(IA) OF THE ACT. BUT THE REVEN UE'S CONTENTION IS THAT THE PAYMENTS ARE IN THE NATURE OF MACHINERY HIRE CHARGES FALLING UNDER THE HEAD 'RENT' AND THE PREVIOUS PROVISIONS OF SECTION 194I OF THE ACT ARE APPLICABLE. ACCORDING T O REVENUE, THE ASSESSEE HAS DEDUCTED TAX @ 1% U/ S. 194C(2) OF THE ACT AS AGAINST THE ACTUAL DEDU CTION TO BE MADE AT 10% U/S. 194I OF THE ACT, THEREBY LESSER DEDUCTION OF TAX. THE REVENUE HAS MA DE OUT A CASE OF LESSER DEDUCTION OF TAX AND THAT ALSO UNDER DIFFERENT HEAD AND ACCORDINGLY DISA LLOWED THE PAYMENTS PROPORTIONATELY BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE LD. CIT, DR ALSO ARGUED THAT THERE IS NO WORD LIKE FAILURE USED IN SECTION 40(A)(IA) OF T HE ACT AND IT REFERRED TO ONLY NON-DEDUCTION OF TAX AND DISALLOWANCE OF SUCH PAYMENTS. ACCORDING TO HIM , IT DOES NOT REFER TO GENUINENESS OF THE PAYMENT OR OTHERWISE BUT ADDITION U/S. 40(A)(IA) CA N BE MADE EVEN THOUGH PAYMENTS ARE GENUINE BUT TAX IS NOT DEDUCTED AS REQUIRED U/S.40(A)(IA) O F THE ACT. WE ARE OF THE VIEW THAT THE CONDITIONS LAID DOWN U/ S.40(A)(IA) OF THE ACT FOR MAKING ADDI TION IS THAT TAX IS DEDUCTIBLE AT SOURCE AND SUCH TAX HAS NOT BEEN DEDUCTED. IF BOTH THE CONDITIONS A RE SATISFIED THEN SUCH PAYMENT CAN BE DISALLOWED U/S.40(A)(IA) OF THE ACT BUT WHERE TAX I S DEDUCTED BY THE ASSESSEE, EVEN UNDER BONAFIDE WRONG IMPRESSION, UNDER WRONG PROVISIONS OF TDS, TH E PROVISIONS OF SECTION 40(A)(IA) OF THE ACT CANNOT BE INVOKED. HERE IN THE PRESENT CASE BEFORE US, THE ASSESSEE HAS DEDUCTED TAX U/S. 194C(2)OF THE ACT AND NOT U/S. 1941 OF THE ACT AND THERE IS NO ALLEGATION THAT THIS TDS IS NOT DEPOSITED WITH THE GOVERNMENT ACCOUNT. WE ARE OF TH E VIEW THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT HAS TWO LIMBS ONE IS WHERE, INTER ALIA, ASSESSEE HAS TO DEDUCT TAX AND THE SECOND WHERE AFTER DEDUCTING TAX, INTER ALIA, THE ASSESSEE HAS T O PAY INTO GOVERNMENT ACCOUNT. THERE IS NOTHING IN THE SAID SECTION TO TREAT, INTER ALIA, THE ASSES SEE AS DEFAULTER WHERE THERE IS A SHORTFALL IN DEDUCTION. WITH REGARD TO THE SHORTFALL, IT CANNOT BE ASSUMED THAT THERE IS A DEFAULT AS THE DEDUCTION IS NOT AS REQUIRED BY OR UNDER THE ACT, B UT THE FACTS IS THAT THIS EXPRESSION, 'ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SU CH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION HAS NOT BEEN PAID ON OR BEFORE THE DUE DA TE SPECIFIED IN SUB-SECTION (1) OF SECTION 139'. THIS SECTION 40(A)(IA) OF THE ACT REFERS ONLY TO TH E DUTY TO DEDUCT TAX AND PAY TO GOVERNMENT ACCOUNT. IF THERE IS ANY SHORTFALL DUE TO ANY DIFFE RENCE OF OPINION AS TO THE TAXABILITY OF ANY ITEM O R THE NATURE OF PAYMENTS FALLING UNDER VARIOUS TDS PR OVISIONS, THE ASSESSEE CAN BE DECLARED TO BE AN ASSESSEE IN DEFAULT U/S. 201 OF THE ACT AND NO D ISALLOWANCE CAN BE MADE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. ACCORDINGLY, WE CONFIRM THE ORDER OF CIT (A) ALLOWI NG THE CLAIM OF ASSESSEE AND THIS ISSUE OF 5 ITA NO. 81/M/2012 EDROOS SYED MOHAMMED ZAKIR REVENUE'S APPEAL IS DISMISSED.' WE FIND NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS CASE AND THEREFORE, WE REFUSE TO ADMIT THE APPEAL. ACCORDINGLY, THE APPEAL IS DISMISSED. IN VIEW OF DISMISSAL OF THE APPEAL ITSELF, THE CONN ECTED APPLICATION HAS BECOME INFRUCTUOUS AND THE SAME IS ALSO DISMISSED. RESPECTFULLY, FOLLOWING THE SAME, 2ND EFFECTIVE GRO UND (GOA 3 & 4) IS DECIDED IN FAVOUR OF THE ASSESSEE. AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS AL LOWED. 2,3% +, 4 5 . 6 . , 7 . ORDER PRONOUNCED IN THE OPEN COURT ON 4TH, FEB RUARY,2015. #1 . 0& # 8 9% 4 QJ QJQJ QJ / , ,, , 201 5 . = SD/- SD/- ( /JOGINDER SINGH) ( #$ / RAJENDRA) ! / JUDICIAL MEMBER # # # # ! ! ! ! / ACCOUNTANT MEMBER / MUMBAI, 9% /DATE: 04.02.2015 SK #1 #1 #1 #1 . .. . ),> ),> ),> ),> ?#>&, ?#>&, ?#>&, ?#>&, / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / '( 2. RESPONDENT / )*'( 3. THE CONCERNED CIT(A)/ @ A , 4. THE CONCERNED CIT / @ A 5. DR E BENCH, ITAT, MUMBAI / >B ),% BZ BZBZ BZ , . . . 6. GUARD FILE/ 2 * >, ), //TRUE COPY// #1 % / BY ORDER, C / DY./ASST. REGISTRAR , /ITAT, MUMBAI