Dy.CIT, Circle-3(1), Hyderabad V. M/s Seaways & Shipping & Logistics Limited, Hyderabad

MA 58/HYD/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0244 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-05-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 22-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: V SIVA KUMAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B : HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER MA.NO. 58/HYD/2013 ARISING OUT OF ITA.NO.1093/HYD/2012 - ASSESSMENT YEAR 2007-2008 DCIT, C IRCLE 3 (1) HYDERABAD. VS. M/S. SEAWAYS SHIPPING & LOGISTICS LTD. HYDERABAD PAN AADCS0845B (APPL IC ANT) (RESPONDENT) APPL IC ANT BY: SMT. AMISHA S. GUPT RESPONDENT BY: SHRI V.SIVA KUMAR DATE OF HEARING: 1 9 .04.2013 DATE OF PRONOUNCEMENT: 10 .0 5 .2 013 ORDER PER SMT. ASHA VIJAYARAGHAVAN, J.M. THIS MA HAS BEEN FILED BY THE REVENUE ON THE FOLLO WING GROUNDS : 2. WHILE COMPLETING THE ASSESSMENT FOR THE A.Y. 200 7-08, THE ASSESSING OFFICER DISALLOWED CERTAIN ITEMS OF EXPEN DITURE OBSERVING THAT ASSESSEE COMPANY HAD NOT DEDUCTED TAX AT SOURCE ON THE SAID EXPENDITURE AND THUS VIOLATED THE PROVISIONS OF SEC TION 40(A)(IA). THE CIT(A) BASING ON THE DECISION OF THE HONBLE SPECIA L BENCH, ITAT, VISAKHAPATNAM IN THE CASE OF M/S. MERILYN SHIPPING AND TRANSPORT IN ITA. NO. 477/VIZ/2008, ALLOWED THE ASSESSEES APPEA L. IN THE ABOVE REFERRED CASE, THE ITAT HAD HELD THAT SEC. 40(A)(IA ) IS APPLICABLE TO THE EXPENDITURE WHICH IS PAYABLE AS OF 31 ST MARCH AND DOES NOT APPLY TO EXPENDITURE WHICH HAS ALREADY BEEN PAID DURING TH E YEAR. AGAINST THE ORDER OF THE CIT(A), THE DEPARTMENT FILED FURTHER A PPEAL AND THE ITAT DISMISSED REVENUES APPEAL HOLDING THAT THERE IS NO INFIRMITY IN THE ORDER OF THE CIT(A) AS THE CIT(A) HAS MERELY DIRECT ED THE ASSESSING 2 OFFICER TO VERIFY THE AMOUNTS PAID/PAYABLE BY THE A SSESSEE IN THE LIGHT OF THE SPECIAL BENCH DECISION OF THE VIZAG BENCH OF ITAT IN THE CASE OF MERLYIN SHIPPING TRANSPORT & OTHERS, 136 ITR 23 (SB ) (VIZAG). THE HONBLE HIGH COURT OF A.P. PASSED INTERIM SUSPENSI ON ORDER ON 08-10- 2012 SUSPENDING THE SPECIAL BENCH DECISION IN THE C ASE OF MERILYIN SHIPPING & TRANSPORTS ON THE ISSUE OF DISALLOWANCE U/S. 40(A)(IA). THIS DECISION WAS NOT CONSIDERED BY THE HONBLE TRIBUNA L IN THE ORDER DATED 18.10.2012 IN THE PRESENT CASE FOR THE A.Y. 2007-08 THOUGH THE ORDER OF THE HONBLE AP HIGH COURT WAS PASSED PRIOR TO PASSI NG OF THE ORDER BY THE HONBLE ITAT. HENCE, IT IS A MISTAKE APPARENT F ROM THE RECORD REQUIRING ACTION UNDER SECTION 254(2) OF THE INCOME TAX ACT, 1961. 3. FURTHER THE LEARNED DR SUBMITTED THAT THERE IS N O MERIT IN THE PLEA OF THE LEARNED COUNSEL AS THE ASSESSEES C ASE IS NOT SUPPORTED BY THE DECISION OF THE SPECIAL BENCH DECI SION OF THE ITAT, VIZAG (SUPRA) AS THIS JUDGMENT HAS BEEN OVER RULED BY THE HONBLE KOLKATA HIGH COURT IN THE CASE OF CIT, KOLKATA-XI VS. CRESCENT EXPORT SYNDICATES VIDE ITA NO. 20 OF 2 013, G.A.NO. 190 OF 2003, JUDGMENT DATED 3 RD APRIL, 2013 WHEREIN IT WAS HELD THAT THE VIEWS EXPRESSED IN THE CASE OF ME RLYIN SHIPPING AND TRANSPORTS WERE NOT ACCEPTABLE. THE K OLKATA HIGH COURT HAS FOLLOWED THE SAID JUDGMENT IN THE CA SE OF CIT VS. MD. JAKIR HOSSAIN MODAL VIDE ITAT NO. 31 OF 200 3, G.A. NO. 320 OF 2013, JUDGMENT DATED 4 TH APRIL, 2013. THEREFORE, THE LEARNED DR SUBMITTED THAT NO STAY SHALL BE GRANTED TO THE ASSESSEE. 4. THE LEARNED COUNSEL APPEARING ON BEHALF OF THE A SSESSEE SHRI V.SIVAKUMAR VEHEMENTLY ARGUED RELYING ON THE DECISI ON OF HONBLE GUJARAT HIGH COURT IN THE CASE OF ACIT VS. SAURASHT RA KUTCH STOCK EXCHANGE LTD. 262 ITR 146 AND CONTENDED THAT IN THE ABSENCE OF DECISION OF THE JURISDICTIONAL HIGH COURT, THE SPEC IAL BENCH DECISION IN THE CASE OF M/S. MERLYIN SHIPPING AND TRANSPORT IN 3 ITA.NO.477/VIZAG/2008 HAS TO BE FOLLOWED. IN THE CA SE OF SAURASHTRA KUTCH STOCK EXCHANGE LTD. (SUPRA) THE GUJARAT HIGH COURT HELD WHILE SUMMING-UP AT PAGE 162 AS FOLLOWS : (F) NON-CONSIDERATION OF A JUDGMENT OF THE JURISDI CTIONAL HIGH COURT WOULD ALWAYS CONSTITUTE A MISTAKE APPARENT FR OM THE RECORD, REGARDLESS OF THE JUDGMENT BEING RENDERED P RIOR TO OR SUBSEQUENT TO THE ORDER PROPOSED TO BE RECTIFIED. HOWEVER, IN THIS CASE, THE A.P. HIGH COURT HAS NOT YET RENDERED ITS JUDGMENT. 5. WE FIND THAT IN THE CASE OF SAGAR COOPERATIVE CE NTRAL BANK LTD. VS. CIT 186 ITR 292 THE MADHYA PRADESH HIGH COURT H AS DEALT WITH THE ISSUE THAT AS LONG AS THE MATTER IS PENDING CONSIDE RATION BEFORE THE SUPREME COURT AND IS NOT SETTLED THERE IS A DEBATAB LE POINT OF LAW INVOLVED AND HENCE, THE ORDER OF RECTIFICATION IS N OT VALID. IN THE CASE OF SAGAR COOPERATIVE CENTRAL BANK LTD. (SUPRA) FIRSTLY , THERE WAS NO ORDER BY THE HIGH COURT ON THE DATE WHEN THE APPELLATE OR DER OF THE TRIBUNAL WAS PASSED AND SECONDLY ON THE DATE WHEN THE TRIBUN AL PURPORTED TO RECTIFY THE SO CALLED MISTAKE APPARENT FROM THE REC ORD THE MATTER WAS ALREADY PENDING BEFORE THE SUPREME COURT TO BE RESO LVED AND SETTLED BY THAT COURT. THEREFORE, IT CANNOT BE SAID THAT THE P OINT IS NOT DEBATABLE AND IT INVOLVES A LONG DRAWN PROCESS OF REASONING T O ESTABLISH THAT THERE WAS AN ERROR APPARENT IN THE TRIBUNALS ORDER. HENC E, IT WAS HELD THAT THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS TO BE DISMISSED. 6. IN THE INSTANT CASE BEFORE US, THOUGH THE A.P. H IGH COURT HAS PASSED INTERIM SUSPENSION ON 8.10.2012 AND THE KOLK ATA HIGH COURT HAS PASSED THE ORDER INFAVOUR OF THE REVENUE, THE M ATTER IS STILL NOT DECIDED BY THE A.P. HIGH COURT BEING THE JURISDICTI ONAL HIGH COURT AND HENCE, APPLYING THE RATIO OF THE DECISION IN THE CA SE OF SAGAR COOPERATIVE CENTRAL BANK LTD. VS. CIT 186 ITR 292 ( SUPRA) THE REVENUES MISCELLANEOUS APPLICATION THAT THERE IS A MISTAKE APPARENT 4 ON RECORD REQUIRING ACTION UNDER SECTION 254 (2) O F THE I.T. ACT IS TO BE DISMISSED. HOWEVER, BOTH THE PARTIES ARE AT LIBERTY TO FILE M.AS AT SUCH TIME WHEN THE DECISION IS RENDERED BY THE A.P. HIGH COURT. 7. IN THE RESULT, MA OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH MAY, 2013. SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER ( ASHA VIJAYARAGHAVAN ) JUDICIAL MEMBER HYDERABAD, DATED THE 10 TH MAY, 2013 VBP/- COPY TO 1. M/S. SEA WAYS SHIPPING & LOGISTICS LTD. (FORMERLY SEAWAYS SHIPPING LTD.) PLOT NO.731, ROAD NO.36, JUBILEE HIL LS, HYDERABAD PAN AADCS0845B 2. DCIT, CIRCLE 3(1), 7 TH FLOOR, B BLOCK, IT TOWERS, AC GUARDS, HYDERABAD. 3. CIT(A) - IV , HYDERABAD 4. CIT - III , HYDERABAD 5. DR B BENCH, ITAT, HYDERABAD