ITO 18(2)(4), V. HARISH ANUPCHAND MEHTA,

MA 641/MUM/2012

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0355 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2006-2007
• Appeal Filed On: 12-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A K GHOSH
• Section: 194C; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'H' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER MA NO. 641/MUM/2012 (ARISING OUT OF ITA NO. 4460/MUM/2011) (ASSESSMENT YEAR: 2006-07) INCOME TAX OFFICER - 18(2)(4) SHRI HARISH ANUPCHAN D MEHTA ROOM NO. 109, 1ST FLOOR 6, SHREE GURUNIWAS BUILDING PIRAMAL CHAMBERS, LALBAUG VS. GOKHALE ROAD NORTH, DADAR (W) MUMBAI 400012 MUMBAI 400028 PAN - AAEPM5838L APPLICANT RESPONDENT APPLICANT BY: MISS NEERAJA PRADHAN RESPONDENT BY: SHRI A.K. GHOSH DATE OF HEARING: 26.04.2013 DATE OF PRONOUNCEMENT: 26.04.2013 O R D E R PER D. MANMOHAN, V.P. BY THIS APPLICATION THE REVENUE SEEKS RECALL OF THE ORDER DATED 09.05.2012 FOR RECONSIDERATION ON MERITS. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT IN RESPECT OF CERTAIN EXPENDITURE THERE IS NO EVIDENCE OF DEDUCTION OF TAX AT SOURCE AND HENCE THE ENTIRE EXPENDITURE DESERVES TO BE DISALLOWED UNDER SECTION 40(A)(IA) OF THE ACT. BEFORE THE LEARNED CI T(A) THE CASE OF THE ASSESSEE WAS THAT THE DISALLOWANCE UNDER SECTION 40(A)(IA) I S NOT IN ACCORDANCE WITH LAW. THE LEARNED CIT(A) CALLED FOR REMAND REPORT FR OM THE AO. THE AO, IN THE REMAND REPORT, STATED THAT THE REPRESENTATIVE OF TH E ASSESSEE HAS SUBMITTED PARTY-WISE DETAILS OF EXPENSES ON WHICH TAX IS DEDU CTIBLE AND COPY OF THE ACCOUNTS IN RESPECT OF TDS. THE AO FURTHER NOTICED THAT TDS WAS CREDITED ON THE LAST DAY OF THE YEAR I.E., 31.03.2006 AND AS SESSEE DEPOSITED THE TAX IN THE MONTH OF APRIL, 2006, WHICH IS BEYOND THE TIME STIPULATED AND THEREFORE DISALLOWANCE UNDER SECTION 40(A)(IA) IS IN ACCORDAN CE WITH LAW. THE CASE OF THE ASSESSEE WAS THAT AN INDIVIDUAL IS NOT REQUIRED TO DEDUCT TAX AT SOURCE MA NO. 641/MUM/2012 SHRI HARISH ANUPCHAND MEHTA 2 UNDER SECTION 194C FOR THE YEAR UNDER CONSIDERATION . HOWEVER, BY FINANCE ACT, 2007 W.E.F. 01.06.2007 CLAUSE (K) OF SUB-SECTI ON (1) WAS INTRODUCED WHEREBY AN INDIVIDUAL OR HUF IS LIABLE TO DEDUCT TA X UNDER SECTION 194C. SINCE THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TAX U NDER SECTION 194C FOR THE YEAR UNDER CONSIDERATION, PROVISIONS OF SECTION 40(A)(IA) CANNOT BE APPLIED. THE LEARNED CIT(A) NOTICED THAT PRIOR TO I NTRODUCTION OF CLAUSE (K) OF SUB-SECTION (1) TO SECTION 194C ASSESSEE WAS NOT RE QUIRED TO DEDUCT TAX UNDER SECTION 194C AND HENCE PROVISIONS OF SECTION 40(A)(IA) CANNOT BE APPLIED. 3. AN APPEAL WAS FILED BY THE REVENUE CONTENDING THAT DISALLOWANCE UNDER SECTION 40(A)(IA) WAS MADE NOT ONLY ON THE GR OUND THAT TAX IS DEDUCTIBLE BUT ALSO ON ACCOUNT OF FAILURE OF THE AS SESSEE TO SUBSTANTIATE THE CLAIM OF EXPENDITURE. IN OTHER WORDS, APPEAL WAS FI LED ON TWO ASPECTS I.E.; (A) EVEN AS PER THE PROVISIONS, AS IT STOOD IN THE RELE VANT FINANCIAL YEAR, THE ASSESSEE IS LIABLE TO DEDUCT TAX AT SOURCE AND FAIL URE TO DEDUCT TAX IS ATTRACTED BY PROVISIONS OF SECTION 40(A)(IA), AND ( 2) THE ASSESSEE FAILED TO SUBSTANTIATE THE CLAIM OF EXPENDITURE AS SUCH. 4. THE BENCH NOTICED THIS ASPECT IN PARA 7 OF ITS ORDE R AND BY TAKING INTO CONSIDERATION THE REMAND REPORT OF THE AO IT WAS HE LD THAT THERE IS NO DISPUTE WITH REGARD TO GENUINENESS OF THE EXPENDITU RE. THE BENCH ALSO OBSERVED THAT AMENDMENT TO SECTION 194C IS EFFECTIV E FROM 01.06.2007 AND HENCE NOT APPLICABLE TO THE PERIOD UNDER CONSIDERAT ION. 5. IN THE OPINION OF THE AO, THE ABOVE MENTIONED ORDER OF THE TRIBUNAL SUFFERS FROM A MISTAKE APPARENT FROM RECORD BECAUSE THE ASSESSEE COULD NOT FURNISH DOCUMENTARY EVIDENCE TO PROVE THAT THE ASSE SSEE DEDUCTED TAX AT SOURCE AND THE EXPENDITURE IS GENUINE. 6. WE HAVE HEARD THE LEARNED D.R. AS WELL AS THE LEARN ED COUNSEL FOR THE ASSESSEE IN THIS REGARD. ADMITTEDLY THE LEARNED CIT (A) CONSIDERED THIS ISSUE AND UPON OBTAINING REMAND REPORT FROM THE AO IT WAS NOTED THAT THE GENUINENESS OF THE EXPENDITURE IS NOT IN DISPUTE. S INCE NO MATERIAL WAS PLACED ON RECORD TO CONTRADICT THIS FINDING AND THE TRIBUNAL HAVING SUSTAINED THE ORDER OF THE CIT(A), THE ORDER OF THE TRIBUNAL CANNOT BE STATED MA NO. 641/MUM/2012 SHRI HARISH ANUPCHAND MEHTA 3 TO CONTAIN ANY MISTAKE APPARENT FROM RECORD. WE, TH EREFORE, REJECT THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH APRIL, 2013. SD/- SD/- (RAJENDRA SINGH) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 26 TH APRIL, 2013 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 29, MUMBAI 4. THE CIT 18, MUMBAI CITY 5. THE DR, H BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.