Shri Prakashchandra Shivbalak Yadav, Ahmedabad V. The Income tax Officer,Ward-9(4), Ahmedabad

ITA 927/AHD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60563 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 27-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: M K PATEL
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER I.T.A. NO. 927/ AHD/2012 (ASSESSMENT YEAR 2008-09) PRAKASHCHANDRA SHIVBALAK YADAV, 4/13,SAMRAT NAGAR, ISANPUR, NARODA, NAROL HIGHWAY, AHMEDABAD-382443 VS. ITO, WARD 9(4), AHMEDABAD PAN/GIR NO. : AAQPY7331Q (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI M K PATEL, AR RESPONDENT BY: SHRI O P BATHEJA, SR. DR DATE OF HEARING: 26.06.2012 DATE OF PRONOUNCEMENT: 06.07.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A) XV, AHMEDABAD DATED 22.02.2012 FOR THE ASSES SMENT YEAR 2008- 09. THE GROUNDS NO.1, 2 & 3 ARE INTERCONNECTED WHI CH ARE AS UNDER: 1. THE LEARNED C.I.T. (APPEALS) ERRED IN LAW AND ON FACTS TO DECIDE THE APPEAL EX-PARTY DESPITE THE FACT THAT TH E APPELLANT HAD SOUGHT THE ADJOURNMENT OF THE HEARING ON 22.02.12. 2. THE LD C.I.T. (APPEALS) ERRED IN LAW AND ON FAC TS TO UPHOLD THE DISALLOWANCE OF RSL,75,337/- OUT OF INTEREST EXPENS ES U/S 40(A)(IA) OF THE ACT. 3. THE LD C.I.T. (APPEALS) ERRED IN LAW AND ON FA CTS TO UPHOLD THE DISALLOWANCE OF RS23,85,890/- OUT OF FREIGHT AND TR UCK HIRE CHARGES U/S 40(A)(IA) OF THE ACT. I.T.A.NO.927 /AHD/2012 2 2. IT WAS SUBMITTED BY THE LD. A.R. THAT THE ENTIRE AMOUNT ON WHICH NO TDS WAS DEDUCTED, WAS PAID BY THE ASSESSEE BY TH E YEAR END AND NO AMOUNT WAS OUTSTANDING AS ON 31.03.2008 AND THEREFO RE, AS PER THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF MERILYN SHIPPING & TRANSPORTS AS REPORTED IN 136 ITD 23 (VI SHAKHAPATNAM) (SB), NO DISALLOWANCE U/S 40(A)(IA) IS JUSTIFIED. HE ALSO SUBMITTED A COPY OF TRIBUNAL DECISION IN THE CASE OF N K JEWELLERS I N I.T.A.NO. 638/AHD/2009 DATED 27.04.2012 AND POINTED OUT THAT IN THAT CASE ALSO THE TRIBUNAL HAS DECIDED SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THIS VERY JUDGMENT OF SPECIAL BENCH OF THE TRIBUNAL . AT THIS JUNCTURE, FIRST WE WANTED TO SEE AS TO WHETHER ANY AMOUNT IS OUTSTANDING OR NOT IN RESPECT OF WHICH DISALLOWANCE WAS MADE BY THE A.O. U/S 40(A)(IA). IT WAS SUBMITTED BY THE LD. A.R. THAT FOR VERIFICATION OF THIS FACTUAL ASPECT, THE MATTER MAY BE RESTORED TO THE FILE OF THE A.O. FOR A FRESH DECISION BY FOLLOWING THIS DECISION OF SPECIAL BENCH OF THE TRI BUNAL. 3. LD. D.R. SUPPORTED THE ORDERS OF AUTHORITIES BEL OW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE JUDGEMENTS CITED BY THE LD. A.R. WE FIND THAT NOW, AS PER THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL, PROVISIONS OF SEC TION 40(A)(IA) OF THE INCOME TAX ACT, 1961 ARE APPLICABLE ONLY TO THE AMO UNT OF EXPENDITURE WHICH ARE PAYABLE AS ON 31 ST MARCH OF THE RELEVANT PREVIOUS YEAR AND THIS PROVISION CANNOT BE INVOKED TO DISALLOW THOSE EXPEN DITURE WHICH HAVE BEEN ACTUALLY PAID DURING THE PREVIOUS YEAR WITHOUT DEDUCTION OF TDS. IN THE PRESENT CASE, ALTHOUGH THIS IS THE CONTENTION O F THE ASSESSEE THAT ENTIRE AMOUNT OF THIS EXPENDITURE FOR WHICH DISALLOWANCE W AS MADE BY THE A.O., HAD BEEN ACTUALLY PAID DURING THE PREVIOUS YE AR ENDED ON I.T.A.NO.927 /AHD/2012 3 31.03.2008 BUT NO EVIDENCE IS AVAILABLE BEFORE US I N SUPPORT OF THIS CONTENTION AND THIS CONTENTION WAS NEVER RAISED BEF ORE THE AUTHORITIES BELOW AND HENCE, WE FEEL THAT IN THE INTEREST OF JU STICE, THIS MATTER SHOULD GO BACK TO THE FILE OF THE A.O. FOR A FRESH DECISIO N. WE, THEREFORE, SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND RES TORE THIS MATTER BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION. THE A.O . SHOULD EXAMINE THE FACTUAL ASPECT AS TO WHETHER THE ENTIRE EXPENDITURE FOR WHICH THE DISALLOWANCE WAS MADE BY HIM U/S 40(A)(IA) WAS ACTU ALLY PAID IN THE PREVIOUS YEAR ENDED ON 31.03.2008 OR ANY AMOUNT OF EXPENDITURE IS OUTSTANDING AS ON THAT DATE. WE WANT TO MAKE IT CL EAR THAT THE BURDEN IS ON THE ASSESSEE TO BRING EVIDENCE BEFORE THE A.O. I N SUPPORT OF THIS CONTENTION THAT THE ENTIRE AMOUNT WAS PAID BEFORE 3 1.03.2008. AFTER EXAMINING HIS FACTUAL ASPECT, THE A.O. SHOULD DECID E THIS ISSUE IN THE LIGHT OF THIS DECISION OF SPECIAL BENCH OF THE TRIBUNAL C ITED BY THE LD. A.R. AND IN THE LIGHT OF ANY OTHER JUDGEMENT OF HONBLE HIGH COURT, IF AVAILABLE BY THAT TIME ON THIS ISSUE. NEEDLESS TO SAY, ADEQUATE OPPORTUNITY OF BEING HEARD SHOULD BE ALLOWED TO THE ASSESSEE BY THE A.O. 5. IN THE RESULT, GROUNDS 1-3 ARE ALLOWED FOR STATI STICAL PURPOSES. 6. THE REMAINING ONE GROUND IS GROUND NO.4, WHICH I S AS UNDER: 4. THE LD C.I.T. (APPEALS) ERRED IN LAW AND ON FA CTS TO UPHOLD THE DISALLOWANCE OF RSL,99,255/- OUT OF CONVEYANCE AND SALARY EXPENSES. 7. IT IS SUBMITTED BY THE LD. A.R. THAT DISALLOWANC E WAS MADE BY THE A.O. TO THE EXTENT OF 20% OF EXPENSES IN RESPECT OF CONVEYANCE EXPENSES, SALARY AND BONUS BUT LD. CIT(A) HAS DELETED THE PAR T DISALLOWANCE AND UPHELD THE DISALLOWANCE TO THE EXTENT OF 5% OF THE TOTAL EXPENSES OF CONVEYANCE, SALARY AND BONUS. IT WAS HIS SUBMISSIO N THAT THIS DISALLOWANCE IS ON HIGHER SIDE. I.T.A.NO.927 /AHD/2012 4 8. LD. D.R. SUPPORTED THE ORDER OF LD. CIT(A). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT IT IS NOTED BY LD. CIT(A) IN PARA 8 OF HIS ORD ER THAT IT IS MENTIONED BY THE A.O. IN THE ASSESSMENT ORDERS THAT THE ASSESSEE WAS ASKED TO FURNISH COPY OF ACCOUNTS OF EXPENSES BUT THE SAME HAS NOT B EEN PRODUCED. IT IS ALSO NOTED BY HIM THAT ASSESSEE HAS DEBITED CONVEYA NCE EXPENSES OF RS.22.95 LACS AND SALARY & BONUS OF RS.17.40 LACS A ND HE TREATED THE SAME ON HIGHER SIDE BECAUSE THE SAME WAS NOT VERIFI ABLE IN THE ABSENCE OF BOOKS. BEFORE LD. CIT(A) OR BEFORE US ALSO, NO SUC H COPY OF ACCOUNTS OF EXPENSES WAS FURNISHED. STILL LD. CIT(A) HAS RESTR ICTED THE DISALLOWANCE TO THE EXTENT OF 5% OF THESE EXPENSES ONLY. CONSID ERING THE FACTS OF THE PRESENT CASE, WE DO NOT FIND ANY REASON TO INTERFER E IN THE ORDER OF LD. CIT(A) ON THIS ISSUE. THIS GROUND OF THE ASSESSEE IS REJECTED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS PA RTLY ALLOWED FOR STATISTICAL PURPOSE. 11. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- SD./- (KUL BHARAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD I.T.A.NO.927 /AHD/2012 5 1. DATE OF DICTATION 27/6 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28/6. OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S.4/7 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6/7 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.6/7 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 06/07/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .