Addl.CIT, Central Range-3, Hyderabad, Hyderabad V. M/s Hill County Properties Limited, Hyderabad

MA 166/HYD/2014

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 2783 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 18-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: S RAMA RAO
• Keywords: Rectification of order; Corroborative evidences
• Section: 37(1); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER M.A. NOS. 166 AND 167/HYD/2014 (IN ITA NOS. 1373 & 1404/H/13 ASSESSMENT YEAR: 2008-09) ADDL. COMMISSIONER OF INCOME-TAX, ...APPLICANT CENTRAL RANGE 3, HYDERABAD. VS. M/S HILL COUNTY PROPERTIES LTD., RESPONDENT (FORMERLY KNOWN AS M/S MAYTAS PROPERTIES LTD.),HYDERABAD. (PAN AAELM 2732Q) APPELLANT BY : SRI RAMAKRISHNA BANDI RESPONDENT BY : SRI S. RAMA RAO DATE OF HEARING : 06/02/2015 DATE OF PRONOUNCEMENT : 13/02/2 015 ORDER PER SAKTIJIT DEY, J.M.: M.A. NO. 166/HYD/2014 THIS MISCELLANEOUS APPLICATION FILED BY THE DEPART MENT SEEKING RECTIFICATION SUPPOSED TO HAVE CREPT INTO T HE ORDER DATED 06/06/2014 PASSED BY THE TRIBUNAL IN ITA NO. 1373/HYD/2013. 2. AS STATED IN THE M.A. AND ALSO SUBMITTED BY LD. DR, AO DISALLOWED EXPENDITURE OF RS. 26,72,773 AND RS. 14, 80,251 U/S 37(1) OF THE ACT, IN ABSENCE OF SUPPORTING EVIDENCE TO PROVE THE GENUINENESS OF THE EXPENDITURE. IT WAS SUBMITTED, T HE DRP DELETED THE ADDITIONS MADE BY TREATING THE SAME AS 2 M.A. NOS. 166 & 167/HYD/2014 M/S HILL COUNTY PROPERTIES LTD. DISALLOWANCE U/S 40(A)(IA) FOR SHORT DEDUCTION OF T DS. HOWEVER, ITAT IN THE IMPUGNED ORDER HAS NOT ADJUDICATED THIS ISSUE. 3. THE LEARNED AR INVITING OUR ATTENTION TO ANNEXUR E X AT PARA 13.1 OF DRAFT ASSESSMENT ORDER AND SPECIFICALL Y TO ITEMS OF EXPENDITURE MENTIONED AT SL. NO. 22, 23, 24 & 25 SU BMITTED THAT AO HAS DISALLOWED THESE EXPENDITURES TOTALING TO RS. 26,72,773 U/S 40(A)(IA) FOR THE REASON THAT ASSESSE E HAS DEDUCTED TAX AT LOWER RATE. SIMILARLY, AS FAR AS TH E EXPENDITURE OF RS. 14,80,251 IS CONCERNED, LD. AR INVITING OUR ATTENTION TO PARA 24.9 OF DRAFT ASSESSMENT ORDER SUBMITTED THAT DISALLOWANCE WAS MADE U/S 40(A)(IA) OF THE ACT BECA USE OF SHORT DEDUCTION OF TAX AT SOURCE. LD. AR SUBMITTED THAT S INCE ITAT APPROVED THE ORDER OF DRP BY FOLLOWING THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN CASE OF CIT VS. S.K. TEKRIWAL IN JUDGMENT DATED 3 RD DECEMBER, 2012, THERE CANNOT BE ANY MISTAKE APPARENT ON THE FACE OF RECORD AS PER THE O RDER OF THE TRIBUNAL. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIALS ON RECORD. THE SPECIFIC GRIEV ANCE OF THE DEPARTMENT IN THE M.A. IS, TRIBUNAL HAS NOT DECIDED THE ISSUE RELATING TO GROUND NO. 2 AS RAISED IN DEPARTMENTS APPEAL. HOWEVER, AS CAN BE SEEN FROM THE ANNEXURE X IN PA RA 13.1 OF THE DRAFT ASSESSMENT ORDER, THE AO WHILE EXAMINING THE ALLOWABILITY OF INDIVIDUAL EXPENDITURE CLEARLY MENT IONED AGAINST THE EXPENDITURE APPEARING IN SL.NOS. 22, 23, 24 & 2 5 TOTALLING TO RS. 26,72,773 THAT THEY ARE TO BE DISALLOWED U/S 40(A)(IA) FOR SHORT DEDUCTION OF TAX. IN FACT, THE AFORESAID FACTUAL POSITION ALSO BECOMES CLEAR FROM THE FINDING OF THE DRP IN P ARA 4.3.3. OF ITS ORDER. THAT BEING THE CASE, GROUND NO. 2 RAISED BY THE DEPARTMENT THAT THE DRP HAS NOT GIVEN ITS FINDING R EGARDING THE 3 M.A. NOS. 166 & 167/HYD/2014 M/S HILL COUNTY PROPERTIES LTD. DISALLOWANCE OF THESE PAYMENTS U/S 40(A)(IA) OF THE ACT IS ITSELF ERRONEOUS. SIMILARLY, AS FAR AS THE EXPENDITURE OF RS. 14,80,251 IS CONCERNED, AO HAS DISALLOWED THE SAME U/S 40(A)( IA) OF THE ACT FOR SHORT DEDUCTION OF TAX AND DRP WHILE CONSID ERING BOTH THE DISALLOWANCES MADE BY AO FOLLOWED THE ORDER OF THE HONBLE CALCUTTA HIGH COURT IN CASE OF CIT FS. S.K. TEKRIWA L (SUPRA) AND HELD THAT NO DISALLOWANCE CAN BE MADE U/S 40(A)(IA) OF THE ACT FOR SHORT DEDUCTION OF TAX. THE TRIBUNAL WHILE DISM ISSING THE DEPARTMENTS APPEAL HAS APPROVED THE AFORESAID VIEW OF THE DRP, WHICH IS EVIDENT FROM THE OBSERVATIONS MADE IN PARA 78 OF THIS ORDER. IN THE AFORESAID VIEW OF THE MATTER, WE DO NOT FIND ANY MISTAKE IN THE ORDER OF THE TRIBUNAL. THEREFOR E, THE M.A. FILED BY THE DEPARTMENT IS DEVOID OF MERIT, HENCE, DISMISSED. M.A. NO. 167/HYD/2014 5. THE AFORESAID M.A. HAS BEEN FILED BY THE DEPARTM ENT SEEKING RECTIFICATION OF MISTAKE CREPT INTO THE ORD ER OF THE TRIBUNAL IN ITA NO. 1404/HYD/2013 DATED 06/06/2014. 6. AS STATED IN M.A. AND ALSO CONTENDED BY LD. DR W HILE DEALING WITH THE ISSUE OF DISALLOWANCE OF AN AMOUNT OF RS. 1,48,97,232, THE TRIBUNAL IN PARA 13 OF ITS ORDER H AS REMITTED THE MATTER BACK TO THE FILE OF AO FOR FRESH CONSIDE RATION AFTER EXAMINING THE EVIDENCE FILED BY ASSESSEE. HOWEVER, IN PARA 17 OF ITS ORDER, THE TRIBUNAL DIRECTED AO NOT TO DISAL LOW THE PAYMENTS MADE BY WAY OF CHEQUE AND FURTHER DIRECTED AO TO DISALLOW 10% OF THE EXPENSES INCURRED IN CASH. 7. THE LD. DR SUBMITTED THAT DIRECTIONS OF THE TRIB UNAL BEING CONTRADICTORY, THERE IS A MISTAKE APPARENT ON THE F ACE OF RECORD. THE LEARNED AR, ON THE OTHER HAND, SUBMITTED BEFORE US THAT THE DISALLOWANCE OF RS. 1,48,97,232 WAS MADE U/S 37 (1) OF THE 4 M.A. NOS. 166 & 167/HYD/2014 M/S HILL COUNTY PROPERTIES LTD. ACT FOR LACK OF SUPPORTING EVIDENCE. HOWEVER, IN PU RSUANCE TO THE DIRECTION OF THE TRIBUNAL, AO VERIFIED THE DETA ILS OF EXPENDITURE AND HAVING FOUND THEM TO BE INCURRED TH ROUGH CHEQUE PAYMENTS AND GENUINE HAS ALLOWED THE EXPENDI TURE IN THE CONSEQUENTIAL ORDER PASSED BY HIM ON 09/09/2014 . A COPY OF THE CONSEQUENTIAL ORDER PASSED BY AO WAS ALSO PL ACED ON RECORD. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIALS ON RECORD. THOUGH, THE CONTEN TION OF THE DEPARTMENT THAT DIRECTIONS OF THE TRIBUNAL IN PARAS 13 & 17 IN RELATION TO THE DISALLOWANCE OF EXPENDITURE OF RS. 1,48,97,232 IS CONFLICTING, APPEARS TO SOME EXTENT TO BE CORRECT, HOWEVER, ON PERUSAL OF THE CONSEQUENTIAL ORDER DATED 09/09/2014 PASSED BY AO, A COPY OF WHICH IS PLACED ON RECORD, IT BECOMES CLEAR THAT AO AFTER EXAMINING THE DETAILS OF EXPENDITURE SUBMI TTED BY ASSESSEE FOUND THEM TO BE GENUINE AS ALL THE PAYMEN TS WERE THROUGH BANKING CHANNEL, HENCE, ACCEPTED THEM. IN T HE AFORESAID VIEW OF THE MATTER, THE ISSUE RAISED IN M .A. BECOMES INCONSEQUENTIAL. ACCORDINGLY WE DISMISS THE M.A. 9. IN THE RESULT, BOTH THE M.AS. FILED BY THE DEPAR TMENT ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 13/02/2015. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 13 TH FEBRUARY, 2015 KV 5 M.A. NOS. 166 & 167/HYD/2014 M/S HILL COUNTY PROPERTIES LTD. COPY TO:- 1) M/S HILL COUNTY PROPERTIES LTD., BACHUPALLY, HYDERABAD 500 072 2) ADDL. CIT, CENTRAL RANGE 3, HYDERABAD 3) DRP, HYDERABAD 4) THE CIT(CENTRAL), HYDERABAD 4) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYD . S.NO DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER