Kallolini Senapati, Bhubaneswar V. ITO, Bhubaneswar

ITA 95/CTK/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7553 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-11-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 10-03-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUVENDU DUTTA
• Assessee Lawyers: S K AGARWA L LA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.95 /CTK/2015 ASSESSMENT YEAR : 2010 - 2011 KALLOLINI SENAPATI, PLOT NO.696/13, GGP NEW BANK COLONY, RASULGARH, BHUBANESWAR. VS. ITO, WARD 2(2), 3 RD FLOOR, AAYAKAR BHAVAN, BHUBANESWAR. PAN/GIR NO. AOKPS 5166 F (APPELLANT ) .. ( RESPONDENT ) ITA NO.147/CTK/2015 ASSESSMENT YEAR :2010 - 2011 ITO, WARD 2(2), 3 RD FLOOR, AAYAKAR BHAVAN, BHUBANESWAR. VS. KALLOLINI SENAPATI, PLOT NO.696/13, GGP NEW BANK COLONY, RASULGARH, BHUBANESWAR PAN/GIR NO. AOKPS 5166 F (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.K.AGARWALLA, AR REVENUE BY : SHRI SUVENDU DUTTA , DR DATE OF HEARING : 1 7 /11 / 2016 DATE OF PRONOUNCEMENT : 17 /11 / 2016 2 ITA NO.95/CTK/2015 ITA NO.147/CTK/2015 ASSESSMENT YEAR :2010 - 2011 O R D E R THESE ARE CROSS APPEAL S FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE ORDER OF CIT(A) - II, BHUBANESWAR , DATED 30.1.2015 , FOR THE ASSESSMENT YEAR 2010 - 2011 . 2. IN GROUND NOS.1 AND 2 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE L D CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.5,15,994/ - MADE BY THE ASSESSING OFFICER U/S.40(A)(IA) OF THE ACT. 3. THE SOLE GROUND OF APPEAL TAKEN BY THE REVENUE IS THAT THE LD CIT(A) ERRED IN DELETING THE ADDITION OF RS.25,21,152/ - MADE BY THE ASSESSIN G OFFICER U/S.40(A)(IA) OF THE ACT. 4. SINCE COMMON ISSUE IS INVOLVED IN BOTH THE APPEALS, THEY WERE HEARD TOGETHE R AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER OBSERVED THAT ON EXAMINATION OF BOOKS OF ACCOUNT, IT IS FOUND THAT THE ASSESSEE HAS DEBITED IN THE PROFIT AND LOSS ACCOUNT AN AMOUNT OF RS. 31,12,397/ - UNDER THE HEAD COMMISSION & CLAIM PAID. HE OBSERVED THAT THE ASSESSEE HAS NOT DEDUCTED THE TDS ON PAYMENT OF COMMISSION AS 3 ITA NO.95/CTK/2015 ITA NO.147/CTK/2015 ASSESSMENT YEAR :2010 - 2011 PER THE PROVISIONS OF SECTION 194H OF THE ACT AND, THEREFORE, BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE A CT, THE ASSESSING OFFICER DISALLOWED DEDUCTION OF RS.30,37,136/ - . 6. ON APPEAL, THE LD CIT(A) PARTLY CONFIRMED THE ACTION OF THE ASSESSING OFFICER AND WHILE DOING SO, HE OBSERVED THAT THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS VICT OR SHIPPING SERVICES (P) LTD., (2013) 357 ITR 642 (ALL) UPHOLDING THE POSITION THAT THE PROVISIONS OF SECTION 40(A)(IA) COULD BE EMPLOYED TO DISALLOW THE IMPLICATED EXPENSES ON WHICH TDS PROVISIONS WERE APPLICABLE ONLY IF SUCH EXPENSES ACTUALLY REMAINED PA YABLE AND HAD ACTUALLY NOT BEEN PAID IS NOT DIRECTLY BINDING IN THIS JURISDICTION. 7. AT THE TIME OF HEARING, LD A.R. OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES WHEREAS LD D.R. SUPPORTED THE ASSESSING OFFICER. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIALS AVAILABLE ON RECORD. I FIND THAT HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VICTOR SHIPPING SERVICES (P) LTD., (2013) 357 ITR 642(ALL), HAS HELD THAT FOR DISALLOWING EXPENSES FROM BUS INESS AND PROFESSION ON THE GROUND THAT TAX HAS NOT BEEN DEDUCTED AT SOURCE, THE AMOUNT SHOULD BE PAYABLE AND NOT IT HAS BEEN PAID BY THE END OF THE YEAR. THE SLP FILED AGAINST THE 4 ITA NO.95/CTK/2015 ITA NO.147/CTK/2015 ASSESSMENT YEAR :2010 - 2011 JUDGMENT OF HONBLE ALLAHABAD HIGH COURT HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT VIDE JUDGMENT DATED 2.7.2014 IN CC NO.(S) 8068/2014. I ALSO FIND THAT IN THE CASE AT HAND NO AMOUNT WAS OUTSTANDING AND PAYABLE AS AT THE END OF THE ACCOUNTING YEAR . THEREFORE, IN VIEW OF THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF VICTOR SHIPPING SERVICES (P) LTD (SUPRA), NO DISALLOWANCE U/S.40(A)(IA) WAS WARRANTED IN THE CASE OF THE ASSESSEE . FURTHER, WHEN THERE ARE CONFLICTING VIEWS OF DIFFERENT HIGH COURTS ON AN ISSUE AND NONE OF WHICH IS OF THE HONBLE JURISDICTIONAL HI GH COURT THEN VIEW FAVAOURABLE TO THE ASSESSEE SHOULD BE FOLLOWED. MY VIEW FINDS SUPPORT FROM THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS.VEGETABLE PRODUCTS LTD., 88 ITR 192 (SC). THEREFORE, I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AN D RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VICTOR SHIPPING SERVICES (P) LTD(SUPRA ) DELETE THE ADDITION OF RS.5,15,994/ - SUSTAINED BY THE LD CIT(A) AND CONFIRM THE ORDER OF LD CIT(A) DELETING THE ADDI TION OF RS.25,21,152/ - U/S./40(A)(IA) OF THE ACT. 9. GROUND NOS.3 & 4 OF THE APPEAL TAKEN BY THE ASSESSEE READ AS UNDER: 3. THAT THE LD CIT(A) IS WRONG IN CONFIRMING THE SALESMAN INCENTIVE OF RS.1820 ON ESTIMATED BASIS WHICH IS LIABLE TO BE DELETED . 4. T HAT THE LD AUTHORITIES BELOW ARE WRONG IN DISALLOWING THE DONATION AND SUBSCRIPTION OF RS.1531/ - WHICH IS LIABLE TO BE DELETED. 5 ITA NO.95/CTK/2015 ITA NO.147/CTK/2015 ASSESSMENT YEAR :2010 - 2011 10. AT THE TIME OF HEARING, LD A.R. OF THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING THESE GROUNDS OF APPEAL A N D ALSO MADE ENDORSEMENT IN THE GROUNDS OF APPEAL APPENDED TO FORM 36 TO THIS EFFECT. HENCE THE SAME ARE DISMISSED AS NOT PRESSED. 11. IN THE RESULT, THE APPEAL F ILED BY THE ASSESSEE IS PARTLY ALLOWED AND THE APPEAL FILED BY THE REVENUE IS DISMISSED ORDER PRONOUNCE D IN THE OPEN COURT ON 1 7 /11 /2016 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 17 /11 /2016 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK 1. THE REVENUE : ITO, WARD 2(2), 3 RD FLOOR, AAYAKAR BHAVAN, BHUBANESWAR. 2. THE ASSESSEE: KALLOLINI SENAPATI, PLOT NO.696/13, GGP NEW BANK COLONY, RASULGARH, BHUBANESWAR 3. THE CIT(A) - II, BHUBANESWAR 4. CIT , BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//