Karuna Estates & Developers, Visakhapatnam V. Income Tax Officer, Ward-1(2), Visakhapatnam

MA 33/VIZ/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9813 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 02-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Section: 40(a)(ia)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER M .A.NO. 3 3 /VIZ/ 201 8 (ARISING OUT OF I.T.A.NO. 435 /VIZ/201 8 ) ( / ASSESSMENT YEAR: 20 1 2 - 20 1 3 ) KARUNA ESTATES & DEVELOPERS D.NO.28 - 5 - 4, YELLAMMATHOTA SURYABHAGH VISAKHAPATNAM [PAN : AAHFK8180C] VS. INCOME TAX OFFICER, WARD - 1(2) VISAKHAPATNAM ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : S RI I.KAMA SASTRY, AR / RESPONDENT BY : SMT. SUMAN MALIK, DR / DATE OF HEARING : 07 . 12. 2018 / DATE OF PRONOUNCEMENT : 07 . 12 .2018 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: TH IS MISCELLANEOUS APPLICATION IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE ITAT VIDE I.T.A. NO.435/VIZ/2016 D ATED 11 . 07 .201 8 FOR THE ASSESSMENT YEAR (A.Y.) 20 12 - 13 . 2 M .A. NO . 33 /VIZ/201 8 KARUNA ESTATES & DEVELOPERS, VISAKHAPATNAM 2. IN THIS CASE, BOTH THE REVENUE AND THE ASSESSEE FILED THE CROSS APPEALS AND THE ISSUE INVOLVED IN THIS CASE WA S DISALLOWANCE U/S 40(A)(IA ) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS ACT). THE ASSESSING OFFICER (AO) MADE 100% DISALLOWANCE OF THE EXPENDITURE DEBITED TO PROFIT & LOSS ACCOUNT FOR NON - DEDUCTION OF TAX AT SOURCE U/S 40(A)(IA) OF THE ACT. ON APPEAL BEFORE THE COMMISSIO NER OF INCOME TAX (APPEALS) [CIT(A)], THE LD.CIT(A) UPHELD THE ORDER OF THE AO. THE ASSESSEE RAISED A GROUND IN THIS APPEAL CHALLENGING THE ORDER OF THE CIT(A) AGAINST UPHOLDING OF THE ORDER OF THE AO AND REQUESTED TO RESTRICT THE DISALLOWANCE TO 30% AS P ER THE AMENDMENT TO FINANCE ACT W.E.F. 01.04.2015. THE TRIBUNAL HAS CONSIDERED THE GROUND AND DECIDED THE ISSUE AGAINST THE ASSESSEE, HOLDING THAT THE RESTRICTION OF DISALLOWANCE AT 30% IS APPLICABLE ONLY W.E.F. 01.04.2015, BUT NOT RETROSPECTIVELY. PARA N O.7.2 OF THE ORDER OF THIS TRIBUNAL ADJUDICATING THE ASSESSEES APPEAL ON THIS GROUND READS AS UNDER : 7.2. THE ASSESSEE ALSO RAISED ANOTHER GROUND STATING THAT AS PER SECTION 40(A)(IA) THE DISALLOWANCE REQUIRED TO BE MADE AT 30% OF THE SUM PAYABLE BUT NO T THE ENTIRE AMOUNT. THE AMENDMENT TO SECTION 40(A)(IA) OF THE ACT TO RESTRICT THE DISALLOWANCE @ 30% ON THE SUM PAYABLE CAME INTO EFFECT WITH FINANCE ACT 2014 W.E.F.1.4.2015. THE AMENDMENT WAS NOT MADE RETROSPECTIVELY. THEREFORE, THE SUBMISSION OF THE ASSESSEE IS NOT ACCEPTABLE SINCE THE AMENDMENT IS PROSPECTIVE IN NATURE. ACCORDINGLY, THE GROUND NO.1 OF THE ASSESSEE IN ITS CROSS APPEAL TO RESTRICT THE DISALLOWANCE @30% IS NOT TENABLE AND DISMISSED. 3 M .A. NO . 33 /VIZ/201 8 KARUNA ESTATES & DEVELOPERS, VISAKHAPATNAM 3. THE ASSESSEE FILED MISCELLANEOUS APPLICATION STATING THAT THE LD.AR WAS UNDER THE IMPRESSION THAT THE ENTIRE MATTER WOULD BE REMITTED BACK TO THE FILE OF THE AO FOR REDOING THE SAME SINCE THE REVENUES APPEAL WAS REMITTED TO AO AND ACCORDINGLY REQUESTED TO RECALL THE ORDER TO READJUDICATE THE ISSUE. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. DURING THE APPEAL HEARING, THOUGH THE ASSESSEE RAISED THE GROUND WITH REGARD TO DISALLOWANCE OF THE EXPENDITURE U/S 40(A)(IA) AT 30%, THE LD.AR HAS NOT MADE ANY ARGUMENT ON THIS GROUND. THEREFORE, THE ITAT HAS DECIDED THE ISSUE AS PER THE INFORMATION AVAILABLE ON RECORD AS PER LAW AND HELD THAT AMENDMENT IS PROSPECTIVE BUT NOT RETROSPECTIVE IN NATURE. WHILE GIVING THE RULING THAT ITAT HAS CONSIDERED THE PROVISIONS OF THE STATUT E AND THE INFORMATION AVAILABLE ON RECORD AND TAKEN A DECISION HOLDING THAT THE AMENDMENT MADE IN THE FINANCE ACT, 2014 RESTRICTING THE EXPENDITURE TO 30% IS MADE APPLICABLE FROM 01.04.2015, BUT NOT APPLICABLE FOR EARLIER ASSESSMENT YEAR, THEREFORE, THERE IS NO MISTAKE WHICH REQUIRE MODIFICATION U/S 254(2). ACCORDINGLY, MISCELLANEOUS APPLICATION OF THE ASSESSEE IS DISMISSED. 4 M .A. NO . 33 /VIZ/201 8 KARUNA ESTATES & DEVELOPERS, VISAKHAPATNAM 5. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE ASSESSEE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON 7 TH D ECEMBER , 2018. S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : . 1 2 .2018 L.RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE APPELLANT KARUNA ESTATES & DEVELOPERS, D.NO.28 - 5 - 4, YELLAMMATHOTA, SURYABHAGH, VISAKHAPATNAM 2 . / THE RESPONDENT INCOME TAX OFFICER, WARD - 1(2) , VISAKHAPATNAM 3. THE PR. COMMISSIONER OF INCOME TAX - 1 , VISAKHAPATNAM 4 .THE COMMISSIONER OF INCOME TAX (APPEALS) , VIJAYAWADA 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM