RINGFEDER POWER TRANSMISSION INDIA PVT. LTD.,KANCHIPURAM V. ACIT, LTU CIRCLE-1, CHENNAI

ITA 2961/CHNY/2024

AI Insights

The case involves Ringfeder Power Transmission India Private Limited, the appellant, contesting an order from the Commissioner of Income Tax (Appeals) which added Rs.7,79,000/- to their income for the assessment year 2023-24 under section 40(a)(ia) of the Income Tax Act. The appellant argued that this amount was incorrectly added as it was already disallowed in a previous assessment under section 40(a)(ib). The Tribunal examined the procedural history, including the initial disallowance by the Assessing Officer and the subsequent revision by the appellant in their audit report. The Tribunal concluded that the addition was not in sync with the statutory provisions, which only allow a 30% disallowance under section 40(a)(ia).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470330 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2023-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. RAGHUPATHY
• Assessee Lawyers: R.M.NARAYANAN; VIJAY
• Keywords: Set aside
• Section: 250; 143(1); 40(a)(ia)

Judgement Text

"Page - 1 - of 5 आयकर अपीलीय अधिकरण, ‘‘ए’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI श्री एबी टी. वर्की, न्यायिर्क सदस्य एवं श्री अयिताभ शुक्ला, लेखा सदस्य क े समक्ष BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2961/Chny/2024 निर्ाारण वर्ा /Assessment Years: 2023-24 Ringfeder Power Transmission India Private Limited. Plot No.4, Door No.220, Mount Poonamallee High Road, Kattupakkam, Chennai-600 056. [PAN: AADC R8118C] Asst. Commissioner of Income Tax, LTU, Circle-1, Chennai. (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Shri R.M.Narayanan, CA & Mr.Vijay Narayanan, CA प्रत्यर्थी की ओर से /Revenue by : R.Raghupathy, Addl.CIT सुिवाई की तारीख/Date of Hearing : 17.02.2025 घोर्णा की तारीख /Date of Pronouncement : 26.03.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M : This appeal is filed by the assessee against the order bearing DIN & N ITBA/APL/S/250/2024-25/1066843525(1) dated 19.07.2024 of the Learned Commissioner of Income Tax [herein after “CIT(A), for the assessment years 2023-24. Through the aforesaid appeal the assessee has challenged order u/s 250 dated 19.07.2024 passed by Addl/JCIT(A)- 4, Bengaluru. ITA No. 2961/Chny/2024 Page - 2 - of 5 2.0 It has been noted that there is a delay of 53 days in the case, in filing of this appeal before the tribunal. In its affidavit the assesse has pleaded that the assesse had inadvertently taken a deficient understanding of the order of the Ld.CIT(A) and that took “allowed” as full relief whereas the same was not the case. It was submitted that the direction of the Ld.CIT(A) of adding the amount of Rs.7,79,000/- went initially unnoticed and once it was fully comprehended the delay had occurred. All these activities contributed to the delay which was neither willful nor wanton. The assesse submitted that there will not be case of any non-compliance now. We have considered the justification put forth by the assesse and we are satisfied with their adequacy. We are also conscious of the fact that no litigant gains by intentionally delaying its own matters. The Ld. DR did not pose any serious objections to the delay. Accordingly, we hereby condone the delay and proceed to adjudicate this appeal. 3.0 The only issue raised by the assessee, through its grounds of appeal, in this case is regarding an addition of Rs.7,79,000/- u/s 40(a)(ia) ordered by Ld.CIT(A). ITA No. 2961/Chny/2024 Page - 3 - of 5 4.0 The Ld. Counsel for the assessee submitted that the professional fees was paid to one M/s.Velumuthu Associates of Rs. 11,12,500/- and by mistake the same was shown as claimed u/s 40(a)(ib). However, Ld.AO of CPC in his order u/s 143(1) had disallowed the amount of Rs. 11,12,500/- both u/s 40(a)(ia) and u/s 40(a)(ib) thus reducing refund payable to the assessee. The assessee subsequently revised its audit report under Form 3CD on 09.04.2024 showing the correct position of disallowance u/s 40(a)(ia). The Ld. Counsel submitted that the Ld.First Appellate Authority in para 4.5 of his order directed the Ld.AO to delete the addition but make another addition of Rs.7,79,000/-. The Ld. DR relied upon the order of lower authorities. 5.0 We have heard rival submissions in the light of material available on records. At the outset, we deem it necessary to reproduce the relevant part of the order of Ld.First Appellate Authority:- “…The appellant in its arguments has stated that the CPC has disallowed the professional fees twice u/s. 40(a)(ia) (i.e. Rs.3,33,750/-) and u/s 40(a)(ib) (i.e. Rs.11,12,750/-). The argument of the appellant cannot be accepted, as the appellant has suo-motto disallowed only a sum of Rs.3,33,750/- u/s 40(a)(ia) in its return of income. However, as ITA No. 2961/Chny/2024 Page - 4 - of 5 the appellant has taken a remedial action by filing the revised Form 3CD on 09.02.2024 by correctly mentioning the disallowance of Rs.11,12,750/- u/s 40(a)(ia) in the tax audit report. Ao is directed to delete the addition of Rs.11,12,750/- u/s 40(a)(ib) and add back only the differential amount of Rs.7,79,000/- (Rs.11,12,750-3,33,750) u/s 40(a)(ia) to the total income of the appellant, as the amount of Rs.3,33,750 have been already disallowed by the appellant….” 5.1 It is the case of the assessee that section 40(a)(ia) mandates only 30% disallowance and hence the direction to add back only the differential amount of Rs.7,79,000/- is not in sync with the contemporaneous statutory provisions. We find sufficient force in the arguments of the appellant assessee in as much as section 40(a)(ia) mandates only 30% disallowance and hence the direction of Ld.CIT(A) cannot be sustained. Accordingly, we set aside the order of the lower authorities and direct the Ld.AO to delete the addition of Rs.7,79,000/-. All the grounds of appeal raised by the assessee on this issue are therefore allowed. ITA No. 2961/Chny/2024 Page - 5 - of 5 6.0. In the result, the appeal of the assessee is allowed. Order pronounced on 26th , March-2025 at Chennai. Sd/- ( एबी टी. वकी) (ABY T VARKEY) न्यानयक सदस्य / Judicial Member Sd/- (अयिताभ शुक्ला) (AMITABH SHUKLA) लेखा सदस्य /Accountant Member चेन्नई/Chennai, नदिांक/Dated: 26th , March-2025. KB/- आदेश की प्रनतनलनप अग्रेनर्त/Copy to: 1. अपीलार्थी/Assessee: 2. प्रत्यर्थी/Revenue 3. आयकर आयुक्त/CIT - Chennai 4. नवभागीय प्रनतनिनर्/DR 5. गार्ा फाईल/GF "