THE DCIT, Visakhapatnam V. Srinivasa Ferro Alloys :Ltd., Visakhapatnam

ITA 94/VIZ/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8828 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 02-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI G. MANJUNATHA, HONBLE ACCOUNTANT MEMBER ITA NO. 94 / VIZ /201 6 (ASST. YEAR : 20 07 - 08 ) DCIT, CIRCLE - 4(1), VISAKHAPATNAM V . M/S. SRINIVASA FERRO ALLOYS LTD. , MIG - 225, TPT COLONY, NORTH EXTENSION LAYOUT, SEETAMMADHARA, VISAKHAPATNAM PAN NO. AADCS 1439 B (APPELLANT) (RESPONDENT) C.O.NO. 30/VIZ/2016 ( ITA NO. 94 / VIZ /201 6 ) (ASST. YEAR : 20 07 - 08 ) M/S. SRINIVASA FERRO ALLOYS LTD., MIG - 225, TPT COLONY, NORTH EXTENSION LAYOUT, SEETAMMADHARA, VISAKHAPATNAM V . DCIT, CIRCLE - 4(1), VISAKHAPATNAM PAN NO. AADCS 1439 B (APP LICANT ) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SHRI M.N. MURTHY NAIK - DR DATE OF HEARING : 06 / 01 /201 7 . DATE OF PRONOUNCEMENT : 25 / 01 /201 7 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER ITA NO. 94/VIZ/2016 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 2 , 2 ITA NO. 94 / VIZ /201 6 & C.O.NO.30/VIZ/2016 VISAKHAPATNAM , DATED 11 / 12 /201 5 FOR THE ASSESSMENT YEAR 2007 - 08 . C.O.NO. 30/VIZ/2016 IS A CROSS OBJECTION FILED BY THE ASSESSEE IN ITA NO. 94/VIZ/2016. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF FERRO ALLOYS PRODUCTS LIKE SILICO, MANGANESE AND FERRO MANGANESE . IN THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER NOTED THAT THE ASSESSEE FAILED TO DEDUCT TDS IN RESPECT OF CERTAIN PAYMENTS MADE TO M/S. METALLIC ALLOY , DELHI; M/S. HITECH WEIGHING SYSTEMS; M/S. DUROCAST AND TO VARIOUS OTHER PARTIES AGGREGATING IN ALL TO 22,00,687/ - . THE ASSESSING OFFICER CALLED THE ASSESSEE TO EXPLAIN WHY DISALLOWANCE SHOULD NOT BE MADE UNDER SECTION 40(A)(IA) OF THE ACT. IN RESPONSE, THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFIC ER THAT PAYMENTS MADE WERE MOSTLY IN THE NATURE OF HIRE CHARGES AND ARE NOT LIABLE FOR TDS. ALTERNATIVELY, IT WAS SUBMITTED THAT EXPENDITURE WAS ALREADY PAID NOT PAYABLE AS CONTEMPLATED UNDER SECTION 40(A)(IA) OF THE ACT. HOWEVER, THE ASSESSING OFFICER HAS NOT AGREED WITH THE EXPLANATION SUBMITTED BY THE ASSESSEE AND DISALLOWED AN AMOUNT OF 22,00,687/ - UNDER SECTION 40(A)(IA) OF THE ACT. 3 . ON APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) , IT WAS SUBMITTED TH A T THE ISSUE INVOLVED IN THIS APPEAL IS COVERED BY THE DECISION OF THE ITAT, VISAKHAPATNAM BENCH IN THE CASE OF MUKUNDARA ENGINEERS & CONTRACTORS IN ITA NO. 657/VIZ/2014 , DATED 22/07/2015 . 3 ITA NO. 94 / VIZ /201 6 & C.O.NO.30/VIZ/2016 THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE EXPL ANATION OF THE ASSESSEE, HE DIRECTED THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE TO AMOUNTS PAYABLE AFTER 31 ST MARCH. 4 . THE REVENUE IS NOW IN APPEAL BEFORE THE TRIBUNAL . 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW . IN THIS CASE , COMMISSIONER OF INCOME TAX (APPEALS) BY FOLLOWING THE DECISION OF THE HON'BLE HIGH COURT IN THE CASE OF JANAPRIYA ENGINEERING SYNDICATE VIDE ORDER DATED 24/06/2016 AND ALSO THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF MUKUNDARA ENGINEERS & CONTRACTORS (SUPRA) , DIRECTED THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE TO AMOUNT S PAYABLE AFTER 31 ST MARCH . THE RELEVANT PORTION OF THE ORDER IS EXTRACTED HEREUNDER: - 5. DURING THE APPEAL HEARING THE AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE PAYMENTS WERE ALREADY MADE AND THEREFORE THE PROVISIONS OF SECTION 40(A)(IA) WOULD NOT BE ATTRACTED. IN SUPPORT, THE AUTHORIZED REPRESENTATIVE RELIED ON THE DECISIO N OF THE HON'BLE ITAT, VISAKHAPATNAM BENCH IN THE CASE OF MUKUNDARA ENGINEERS AND CONTRACTORS IN ITA NO. 657/VIZAG/2014 DATED 22/07/201 5 WHEREIN THE HON'BLE TRIBUNAL FOLLOWED THE SPECIAL BENCH DECISION IN THE CASE OF MERLYN SHIPPING IN THE LIGHT OF THE VIEW EXPRESSED BY THE HON'BLE A.P. HIGH COURT IN THE CASE OF JANAPRIYA ENGINEERING SYNDICATE AND HELD T HAT THE PROVISION OF SECTION 40(A)(IA) OF THE ACT CANNOT BE MADE APPLICABLE IN RESPECT OF THE AMOUNTS ALREADY PAID BEFORE 31 ST MARCH, AND THE A.O. WAS DI RECTED TO RESTRICT THE DISALLOWANCE TO THE AMOUNTS PAYABLE AFTER 31 ST MARCH. IN THE LIGHT OF THE DECISION RENDERED BY THE JURISDICTIONAL VIZAG BENCH, THE A.O. IS DIRECTED TO RESTRICT DISALLOWANCE TO AMOUNTS PAYABLE AFTER 31 ST MARCH. 6 . WE FIND THAT THE COMMISSIONER OF INCOME TAX (APPEALS) BY FOLLOWING THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF MUKUNDARA ENGINEERS & CONTRACTORS (SUPRA) WHEREIN THE TRIBUNAL BY 4 ITA NO. 94 / VIZ /201 6 & C.O.NO.30/VIZ/2016 FOLLOWING THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF JANAPRIYA ENGINEERING SYNDICATE (SUPRA) , HAS DIRECTED THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE TO AMOUNTS PAYABLE AFTER 31 ST MARCH , HENCE, W E FIND NO INFIRMITY IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). THUS, THIS G ROUND OF APPEAL RAISED BY THE REVENUE IS DISMISSED. 7 . C.O.NO. 30/VIZ/2016 FILED BY THE ASSESSEE IS IN SUPPORT OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). AS THE ASSESSEE HAS NO GRIEVANCE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), THE CROSS OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS, HENCE, DISMISSED. 8 . IN THE RESULT, APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON TH IS 2 5 T H DAY O F JANUARY , 201 7 . S D / - S D / - ( G. MANJUNATHA ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 5 T H JANUARY , 201 7 . VR/ - 5 ITA NO. 94 / VIZ /201 6 & C.O.NO.30/VIZ/2016 COPY TO: 1 . THE ASSESSEE. M/S. SRINIVASA FERRO ALLOYS LTD., MIG - 225, TPT COLONY, NORTH EXTENSION LAYOUT, SEETAMMADHARA, VISAKHAPATNAM 2 . THE REVENUE - DCIT, CIRCLE - 4(1), VISAKHAPATNAM 3 . THE CIT - 2, VISAKHAPATNAM . 4 . THE CIT(A) - 2, VISAKHAPATNAM. 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., VISAKHAPATNAM