Pradeep R.Chavan, Aurangabad V. Asstt.CIT, Aurangabad

ITA 914/PUN/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62758 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-07-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 16-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH VERMA
• Section: 263; 63; 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO. 914/PN/2010 (ASSESSMENT YEAR 2005-06) PRADEEP BHANUDAS CHAVAN, PROP: M/S. SUPRIYA CONSTRUCTIONS, 317, LABH CHAMBERS, STATION ROAD, AURANGABAD .. APPELLANT PAN NO.AEIPC 6539E VS. ACIT, CIRCLE-2, AURANGABAD .. RESPONDENT ASSESSEE BY : SRI S.N. PURANIK DEPARTMENT BY : SRI MUKESH VERMA CIT DATE OF HEARING : 12-07-2012 DATE OF PRONOUNCEMENT : 17-07-2012 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 29-03- 2010 PASSED U/S. 263 OF THE INCOME TAX ACT BY THE C IT, AURANGABAD RELATING TO THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE IN HIS GROUNDS OF APPEAL HAS CHALLE NGED THE ORDER OF THE CIT, AURANGABAD IN DISALLOWING RS. 24,16,315/- BEING PAY MENTS MADE TO SUB CONTRACTORS BY INVOKING THE PROVISIONS OF SECTION 2 63 OF THE INCOME TAX ACT. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE, AN INDIVIDUAL, IS ENGAGED IN THE BUSINESS OF CONSTRUCTION. ASSESSMENT IN THIS C ASE WAS COMPLETED U/S.143(3) ON 16-04-2007 DETERMINING THE TOTAL INCOME AT RS. 11,4 1,300/- AS AGAINST RS. 7,50,700/- DECLARED BY THE ASSESSEE. SUBSEQUENTLY, THE LEARNED CIT CALLED FOR THE RECORDS AND NOTED THAT THE ASSESSEE HAS DEBITED SUB CONTRACT CHARGES TO THE TUNE OF RS. 27,50,915/- ON WHICH TDS IS DEPOSITED LATE AS P ER THE PROVISIONS OF SECTION 200 2 (1). HE NOTED THAT AS PER THE PROVISIONS OF SECTIO N 40(A)(IA) THE EXPENSES ON ACCOUNT OF SUB CONTRACT CHARGES IS NOT ALLOWABLE TO THE TUNE OF RS. 27,56,915/- . THE AO HAS DISALLOWED ONLY RS. 3,40,600/- IN RESPEC T OF M/S. RACHANA ENGINEERING AND BALANCE SUB CONTRACT CHARGES RS. 24 ,16,315/- REMAINED TO BE ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. HE NCE, THERE IS UNDER ASSESSMENT OF RS. 24,16,315/- U/S. 40(A)(IA). HE, THEREFORE, ISS UED NOTICE U/S.263 TO THE ASSESSEE AND ASKED HIM TO EXPLAIN AS TO WHY AN AMOUNT OF RS. 24,16,315/- SHOULD NOT BE ADDED TO THE TOTAL INCOME SINCE ACCORDING TO HER TH E ASSESSMENT ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND OBSE RVING THAT THE ASSESSEE HAS DEDUCTED THE TDS LATE AND THEREFORE THE PROVISIONS OF SECTION 40(A)(IA) ARE APPLICABLE SHE DIRECTED THE AO TO DISALLOW THE SUB- CONTRACT CHARGES TO THE TUNE OF RS. 24,16,315/-. AGGRIEVED WITH SUCH ORDER OF THE CIT, THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO PAGE 53A OF THE PAPER BOOK AND SUBMITTED THAT TDS OF RS. 25,034/- WAS DEPOSITE D ON 19-07-2005. HE SUBMITTED THAT THE DUE DATE OF FILING OF RETURN IN THE INSTANT CASE WAS 31-10-2005. REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. H.A. DEVELOPERS VIDE ITA NO. 370/2009 ORDER DAT ED 27-04-2012 FOR ASSESSMENT YEAR 2005-06 HE SUBMITTED THAT THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL WHEREI N IT HAS BEEN HELD THAT AMENDMENT TO THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT BY THE FINANCE ACT 2010 IS RETROSPECTIVE FROM 01-04-2005. CONSEQUENTL Y ANY PAYMENT OF TDS DURING PREVIOUS YEAR RELATING TO AND FROM ASSESSMENT YEAR 2005-06 CAN BE MADE TO THE GOVERNMENT ON OR BEFORE THE DUE DATE OF FILING OF R ETURN OF INCOME U/S. 139(1) OF THE ACT. SINCE IN THE INSTANT CASE THE ASSESSEE HA S ADMITTEDLY PAID THE TDS BEFORE 3 THE DUE DATE OF FILING OF RETURN OF INCOME, THEREFO RE, NO DISALLOWANCE U/S. 40(A)(IA) CAN BE MADE. THE LEARNED DR ON THE OTHER HAND RELI ED ON THE ORDER OF THE CIT. 5. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDER OF THE LEARNED CIT AND THE PAPER BOOK FILED O N BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BE FORE US. THERE IS NO DISPUTE TO THE FACT THAT THE TDS OF RS. 25,034/- HAS BEEN DEPO SITED ON 19-07-2005 WHICH IS PRIOR TO THE DUE DATE OF FILING OF THE RETURN U/S.1 39(1) WHICH IN THE INSTANT CASE IS 31-08-2005. WE FIND THE COORDINATE BENCH OF THE TR IBUNAL IN THE CASE OF H.A. DEVELOPERS (SUPRA) HAS HELD THAT AMENDMENT TO THE P ROVISIONS OF SECTION 40(A)(IA) OF THE ACT BY THE FINANCE ACT 2010 IS RETROSPECTIVE FROM 01-04-2005. CONSEQUENTLY ANY PAYMENT OF TDS DURING PREVIOUS YEA R RELEVANT TO AND FROM ASSESSMENT YEAR 2005-06 CAN BE MADE TO THE GOVERNME NT ON OR BEFORE THE DUE DATE FOR FILING THE RETURN OF INCOME U/S.139(1) OF THE I NCOME TAX ACT. SINCE IN THE INSTANT CASE THE ASSESSEE HAS DEPOSITED THE TDS BEF ORE THE DUE DATE OF FILING THE RETURN, THEREFORE, IN OUR OPINION, NO DISALLOWANCE U/S.40(A)(IA) OF THE ACT CAN BE MADE ON ACCOUNT OF LATE DEPOSIT OF TDS TO THE CREDI T OF THE CENTRAL GOVERNMENT. IN THIS VIEW OF THE MATTER, THE ORDER PASSED BY THE CIT U/S. 263 IS SET-ASIDE AND THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 17 TH DAY OF JULY 2012 SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 17 TH JULY 2012 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT, AURANGABAD 4. THE D.R, A PUNE BENCH 5. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE 4