Sh. Ashok Kumar Jain, Ludhiana V. ITO, W-V(1), Ludhiana

ITA 901/CHANDI/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 6770 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 27-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N D GUPTA
• Section: 40(a)(ia)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, SMC, CHANDIGARH , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 900/CHD/2018 / ASSESSMENT YEAR : 2012-13 SH. ASHOK KUMAR JAIN, PROP. RAGHAV INDUSTRIES, G.T. ROAD, MILLER GANJ, LUDHIANA VS. THE ITO, WARD V(1), LUDHIANA ./PAN NO: AANPJ0868N / APPELLANT /RESPONDENT ./ ITA NO. 901/CHD/2018 / ASSESSMENT YEAR : 2013-14 SH. ASHOK KUMAR JAIN, PROP. RAGHAV INDUSTRIES, G.T. ROAD, MILLER GANJ, LUDHIANA VS. THE ITO, WARD V(1), LUDHIANA ./PAN NO: AANPJ0868N / APPELLANT /RESPONDENT ! /ASSESSEE BY : SH. ASHWANI KUMAR, CA ' ! / REVENUE BY : SH. N.D.GUPTA, SR. DR # $ % /DATE OF HEARING : 19.12.2018 &'() % / DATE OF PRONOUNCEMENT : 19.12 .2018 / ORDER THE PRESENT APPEALS HAVE BEEN PREFERRED BY THE ASSE SSEE AGAINST THE ORDER DATED 07.05.2018 OF THE COMMISSIONER OF INCOM E TAX(APPEALS)-2, LUDHIANA [HEREINAFTER REFERRED TO AS CIT(A)]. FIRST WE SHALL TAKE UP APPEAL OF THE ASSESSEE RELATING TO ASSESSMENT YEAR 2012-13 IN ITA NO. 900/CHD/2018. ITA NO. 900 & 901-CHD-2018- SH. ASHOK KUMAR JAIN, LUDHIANA 2 ITA NO.900/CHD/2018 (A. (A.Y. 2012-13): 2. THE ASSESSEE IN THIS APPEAL HAS RAISED TWO EFFEC TIVE GROUNDS OF APPEAL:- 1. THAT ORDER PASSED U/S 250(6) OF THE INCOME-TAX ACT, 1961 BY THE LD. CIT(A) -2, LUDHIANA IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED TO ARBITRARILY UPHOLD THE ACTION OF THE LD. ASSESSING OFFICER IN DISALLOWING A SUM OF RS. 6,74,616/- BY RESORT TO PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 2. THAT HE WAS FURTHER NOT JUSTIFIED TO UPHOLD A DISALLOWANCE OF RS. 1,53,811/- OUT OF TOTAL DISALLO WANCE OF RS. 3,85,776/- OUT OF INTEREST ACCOUNT BY RESORT TO PROVISIONS OF SECITON36(1)(III). 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE HAS STATED AT BAR THAT AS PER THE INSTRUCTIONS OF THE CLIENT, HE DOES NOT PRESS GROUND NO.2 OF THE APPEAL. GROUND NO.2 OF THE APPEAL IS, THEREFORE, DISMISSED AS NOT PRESSED. 3. NOW THE ONLY GROUND LEFT FOR ADJUDICATION IS GR OUND NO.1 OF THE APPEAL WHICH RELATES TO THE DISALLOWANCE MADE BY TH E ASSESSING OFFICER OF RS. 6,74,616/- FOR NON-DEDUCTION OF TDS UNDER THE P ROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 4. AT THE OUTSET , LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THOUGH THE ASSESSEE HAD NOT DEDUCTED TDS ON THE AFORESAID PAYMENTS MADE TO CERTAIN PARTIES, DETAILS OF WHICH HAVE BEEN GIVEN A T PAGE 4 OF THE IMPUGNED ORDER OF THE CIT(A), HOWEVER, THE RESPECTIVE PAYEE S HAVE TAKEN INTO ACCOUNT THESE RECEIPTS WHILE COMPUTING THEIR INCOME AND HAVE FILED THE INCOME TAX RETURNS AND THE DUE TAXES HAVE BEEN PA ID. HE HAS INVITED THE ITA NO. 900 & 901-CHD-2018- SH. ASHOK KUMAR JAIN, LUDHIANA 3 ATTENTION OF THE TRIBUNAL TO THE PROVISIONS OF SECT ION 201 OF THE INCOME TAX ACT AND HAS SUBMITTED THAT IN SUCH AN EVENT THE ASSESSEE CANNOT BE TERMED AS ASSESSEE IN DEFAULT. FURTHER, INVITING ATTENTION TO THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT, THE LD. CO UNSEL FOR THE ASSESSEE HAS SUBMITTED THAT WHERE THE ASSESSEE IS NOT TO BE DEEM ED AS ASSESSEE IN DEFAULT, THE PROVISIONS OF SECTION 40(A)(IA) OF TH E ACT WILL NOT BE ATTRACTED. 4. THE LD. DR, ON THE OTHER HAND, HAS SUBMITTED THA T AS PER THE PROVISIONS, THE ASSESSEE WAS REQUIRED TO FURNISH A CERTIFICATE FROM THE C.A. TO SHOW THAT THE RESPECTIVE PAYMENTS HAVE BEEN TAKE N INTO ACCOUNT BY THE PAYEES FOR THE PURPOSE OF TAXATION. THE LD. DR HA S FURTHER SUBMITTED THAT SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT IS P ROSPECTIVE IN NATURE APPLICABLE FROM 1.7.2012. THAT THE AFORESAID PROVI SIONS CANNOT BE APPLIED RETROSPECTIVELY. IN REBUTTAL, THE LD. COUNSEL FOR THE ASSESSEE HAS R ELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. ANSAL LAND MARK TOWNSHIP PRIVATE LIMITED [2015] 377 ITR 635 (DELHI)., 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE ALSO GONE THROUGH THE RECORD. AS PER THE AMENDED PROVISION OF SECTI ON 40(A)(IA) OF THE ACT, IF THE ASSESSEE IS NOT DEEMED TO BE ASSESSEE IN DEF AULT AS PER THE PROVISIONS OF SECTION 201 OF THE ACT, THE DISALLOW ANCE U/S 40(A)(IA) OF THE ACT IS NOT ATTRACTED IN RESPECT OF PAYMENTS MADE WI THOUT TDS. SO FAR AS THE RETROSPECTIVE APPLICABILITY OF THESE PROVISIONS O F THE ACT IS CONCERNED, THE ISSUE IS NOW SETTLED BY THE DECISION OF THE HON 'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP PRIVA TE LIMITED (SUPRA) ITA NO. 900 & 901-CHD-2018- SH. ASHOK KUMAR JAIN, LUDHIANA 4 AND FURTHER BY THE DECISION OF THE HON'BLE JURISDIC TIONAL PUNJAB & HARYANA HIGH COURT IN THE CASE OF PCIT-2, CHANDIGARH VS. M/S MOBISOFT TELESOLUTIONS PRIVATE LIMITED IN ITA NO. 495 OF 20 17 (O&M) ORDER DATED 3.10.2018, WHEREIN, THE FINDINGS SO ARRIVED AT BY T HE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNS HIP PRIVATE LIMITED, (SUPRA) HAVE BEEN REAFFIRMED. NO DISTINGUISHING CASE LAW HAS BEEN PUT BEFORE US BY THE DEPARTMENT. 6. SO FAR AS THE PLEA THAT THE ASSESSEE HAS NOT FI LED THE RELEVANT CERTIFICATE OF THE C.A., THE LD. COUNSEL FOR THE AS SESSEE HAS SUBMITTED THAT THOUGH THE ASSESSEE HAD CONTACTED THE AFORESAID PAR TIES AND THEY HAVE DISCLOSED THAT THE RECEIPTS HAVE BEEN TAKEN INTO AC COUNT, HOWEVER, THERE WAS SOME RELUCTANCE ON THE PART OF THE PARTIES TO F URNISH THE CERTIFICATE FROM THE ACCOUNTANT. THE LD. COUNSEL FOR THE ASSES SEE HAS SUBMITTED THAT HE WILL FURNISH THE SAID CERTIFICATE BEFORE THE ASS ESSING OFFICER. 7. IN VIEW OF THIS, THE MATTER IS RESTORED TO THE F ILE OF THE ASSESSING OFFICER TO EXAMINE AFRESH THE CONTENTION OF THE A SSESSEE AND IF IT IS FOUND THAT THE RESPECTIVE PAYEES HAVE TAKEN INTO ACCOUNT THE RECEIPTS RECEIVED FROM THE ASSESSEE, FILED THEIR RETURNS, PAID THE D UE TAXES, THEN THE IMPUGNED DISALLOWANCE U/S 40(A)(IA) OF THE ACT WILL NOT BE ATTRACTED. WITH THE ABOVE OBSERVATIONS, THE APPEAL OF THE ASSE SSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 901/CHD./2018 (A.Y. 2013-14) 8. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED IN WRITING THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING THIS APP EAL, AS ITA NO. 900 & 901-CHD-2018- SH. ASHOK KUMAR JAIN, LUDHIANA 5 SUCH, HE INTENDS TO WITHDRAW THE PRESENT APPEAL. THE LD. DR HAS NO OBJECTION FOR THE SAID WITHDRAWAL. IN VIEW OF THE ABOVE, PERMISSION IS HEREBY GRANTE D TO THE ASSESSEE TO WITHDRAW THE APPEAL. CONSEQUENTLY, THIS APPEAL OF THE ASSESSEE IS HEREBY DISMISSED AS WITHDRAWN ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT IMM EDIATELY ON COMPLETION OF HEARING. ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 19.12. 2018 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR