M/s Orbit Medicare (I) Limited, Hyderabad V. ITO, Ward-16(1), Hyderabad

ITA 96/HYD/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9037 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 31-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: P MURALI MOHAN RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.96/HYD/2013 ASSESSMENT YEAR: 2007-08 M/S. ORBIT MEDICARE (I) LTD., HYDERABAD PAN AACCS8155R VS. INCOME TAX OFFICER, WARD 16(1) HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. P. MURALIMOHAN RAO FOR REVENUE : MR. RAJAT MITRA DATE OF HEARING : 26.11.2014 DATE OF PRONOUNCEMENT : 02.01.2015 ORDER PER B. RAMAKOTAIAH A.M: THIS APPEAL IS BY ASSESSEE AGAINST THE ORDER OF LD.CIT(A)-V, HYDERABAD DATED 12-07-2012 ON THE ISSU E OF DISALLOWANCE U/S.40(A)(IA) OF THE I.T.ACT. ASSESSE E RAISED FIVE GROUNDS IN THE APPEAL AND ALSO FILED ADDITIONAL GRO UNDS CONTESTING THAT PROCEEDINGS U/S.201(1) ARE NOT INIT IATED AND FURTHER THE TDS HAS BEEN PAID AND TAXED IN OTHERS H AND, SO DISALLOWANCE DOES NOT ARISE. THESE ADDITIONAL GROU NDS BEING LEGAL IN NATURE AND DOES NOT REQUIRE EXAMINATION OF ANY FRESH FACTS, ARE ADMITTED. WE HAVE HEARD LD. COUNSEL AND LEARNED DEPARTMENTAL REPRESENTATIVE AND AR AT OUR INSTANCE FILED DETAILS OF LEDGER COPIES IN PAPER BOOK. 2. BRIEFLY STATED FACTS ARE THAT ASSESSEE DEBITED AN AMOUNT OF RS.82,75.638 TOWARDS INTEREST ON UNSECURE D LOANS 2 ITA.NO.96/HYD/2013 M/S. ORBIT MEDICARE (I) LTD., HYDERABAD IN THE P & L A/C. NOTICING THAT THE AMOUNTS ARE OU TSTANDING AT THE END OF THE YEAR AND NO TDS WAS DEDUCTED ON T HE AMOUNTS AT THE TIME OF CREDIT, ASSESSING OFFICER IN VOKED PROVISIONS OF SECTION 40(A)(IA) AND DISALLOWED THE SAME. BEFORE LD.CIT(A), IT WAS CONTENTED THAT THE AMOUNT WAS NOT OUTSTANDING AND SO PRINCIPLES LAID DOWN BY THE SPEC IAL BENCH OF ITAT IN THE CASE OF M/S. MERLYN SHIPPING AND TRA NSPORTS VS. ACIT, RANGE-1, VISAKHAPATNAM VIDE ITA NO.477/VIZ/20 08 DT. 29-03-2012 WILL APPLY. FURTHER, IT WAS CONTENTED T HAT THE TDS AMOUNT WAS REMITTED BY SISTER CONCERN FROM THEIR FU NDS AND NECESSARY CERTIFICATES ISSUED TO THE PARTIES WERE F ILED IN SUPPORT. THE LD.CIT(A) HOWEVER, DID NOT ACCEPT AND REJECTED THE CONTENTIONS STATING AS UNDER : 4.3. I HAVE CONSIDERED CAREFULLY THE FACTS AND EVI DENCE. THE A.O. MADE THE AFOREMENTIONED ADDITION UNDER SEC TION 40(A)(IA) OF THE ACT BECAUSE THE AMOUNTS IN QUESTIO N WERE DEBITED TOWARDS INTEREST ON SECURED AND UNSECURED L OANS AND WERE OUTSTANDING I.E., UNPAID AS ON 31.03.2007. IN OTHER WORDS, THE AMOUNT IN QUESTION WAS PAYABLE AS ON AFOREMENTIONED DATE. THE ARGUMENT OF THE APPELLANT THAT THE AMOUNTS WERE PAID IS NOT VALID BECAUSE THE APPELLANTS OWN BOOKS OF ACCOUNT SHOWN THE AMOUNTS AS PAYABLE AND THERE IS NO EVIDENCE OR ANY BANK ENTRY TO SHOW THAT THE PAYMENT HAD BEEN MADE. FURTHER, THE ARGUMENT OF THE APPELLANT REGARDING PAYMENT HAVING BEEN MADE BY THE SISTER CONCERN IS NEITHER BORNE FROM TH E RECORD NOR FROM ANY EVIDENCE. THE APPELLANT IS NOT EVEN BEEN ABLE TO IDENTIFY THE SISTER CONCERN. IN ANY CA SE, THE RELEVANT ENTRY MUST APPEAR IN THE BOOKS OF ACCOUNT OF THE APPELLANT AND THE AMOUNTS CANT THEN BE REFLECTED A S PAYABLE. 4.3.1. RELIANCE ON THE AFOREMENTIONED ORDERS OF THE ITAT, VIZAG BENCH WILL NOT HELP THE CASE OF THE APPELLANT BECAUSE THE AFOREMENTIONED ORDER CLEARLY STATES THA T THE AMOUNTS WHICH ARE PAYABLE WILL HAVE TO BE ADDED BAC K UNDER SECTION 40(A)(IA) OF THE ACT. GIVEN THE ABOVE FACTS AND CIRCUMSTANCES, I HOLD THAT THE ADDITION OF RS.82,75,638/- MADE BY THE A.O. IS CORRECT AND NO INTERFERENCE IS CALLED FOR. 3 ITA.NO.96/HYD/2013 M/S. ORBIT MEDICARE (I) LTD., HYDERABAD 3. AFTER CONSIDERING THE RIVAL CONTENTIONS AND DOCUMENTS PLACED ON RECORD, WE ARE OF THE OPINION T HAT THE ASSESSING OFFICER AND CIT(A) DID NOT CONSIDER THE F ACTUAL POSITION AND DECIDED ONLY ON LEGAL PRINCIPLES. AS S UBMITTED AND AS EVIDENCED BY THE ENTRIES IN THE BOOKS OF ACC OUNT PLACED BEFORE US, ASSESSEE DID PROVIDE THE AMOUNTS IN THE BOOKS OF ACCOUNT AS INTEREST PAYABLE ON UNSECURED LOANS AND CLAIMED IN P&L A/C. AT THE SAME TIME, SINCE THEY DID NOT HAVE SUFFICIENT FUNDS, ASSESSEE SISTER CONCERN M/S.CDR HEALTHCARE L TD., MADE THE TDS PAYMENTS AND PASSED RELEVANT LEDGER ENTRIES . ASSESSEE DID ISSUE THE FORM NO.16A TO THE PARTIES A ND THE PARTIES ALSO CLAIMED THE AMOUNTS ACCORDINGLY. SINC E, TDS WAS DEDUCTED AND PAID ON BEHALF OF ASSESSEE TO THE REVE NUE, DISALLOWANCE U/S.40(A)(IA) DOES NOT ARISE. MOREOVE R, PROCEEDINGS U/S.201(1) WERE ALSO NOT INITIATED WHIC H INDICATE THAT TDS HAS BEEN MADE. HOWEVER, THESE LEDGER COPI ES AND FORM 16A ISSUED WERE NEITHER EXAMINED BY ASSESSING OFFICER NOR CONSIDERED BY LD.CIT(A). IN VIEW OF THIS, WE R ESTORE THE ISSUE TO THE FILE OF ASSESSING OFFICER TO EXAMINE T HE DOCUMENTS AND GIVE RELIEF AS PER THE PROVISIONS OF ACT AND FA CTS. THE GROUNDS ARE CONSIDERED ALLOWED FOR STATISTICAL PURP OSES. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 02.01.2015. SD/- (SAKTIJIT DEY) JUDICIAL MEMBER SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 02 ND JANUARY, 2015 VBP/- 4 ITA.NO.96/HYD/2013 M/S. ORBIT MEDICARE (I) LTD., HYDERABAD COPY TO : 1. M/S. ORBIT MEDICATE (I) L TD., HYDERABAD. C/O. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6- 3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD-500 082. 2. THE INCOME TAX OFFICER, WARD - 16(1), HYDERABAD. 3. CIT(A) - V, HYDERABAD. 4. CIT - IV, HYDERABAD 5. THE D.R. ITAT B BENCH, HYDERABAD.