M/s Alishan Realcon Pvt. Ltd, Bhubaneswar v. ITO, Khurda

ITA 119/CTK/2010 | 2005-2006
Pronouncement Date: 09-03-2011

Appeal Details

RSA Number 11922114 RSA 2010
Assessee PAN AADCA5451D
Bench Cuttack
Appeal Number ITA 119/CTK/2010
Duration Of Justice 11 month(s) 3 day(s)
Appellant M/s Alishan Realcon Pvt. Ltd, Bhubaneswar
Respondent ITO, Khurda
Appeal Type Income Tax Appeal
Pronouncement Date 09-03-2011
Appeal Filed By Assessee
Bench Allotted SMC
Date Of Final Hearing 02-02-2011
Next Hearing Date 02-02-2011
Assessment Year 2005-2006
Appeal Filed On 05-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK (SMC) BENCH CUTTACK . . . SHRI K.S.S.PRASAD RAO JUDICIAL MEMBER / I.T.A.NO. 119/CTK/2010 / AS SESSMENT YEAR 2005 - 06 M/S.ALISHAN REALCON PVT. LTD. 262 SAHEED NAGAR BHUBANESWAR PAN: AADCA 5451 D - - - VERSUS - INCOME - TAX OFFICER KHURDA WARD KHURDA. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SH RI D.K.MOHANTY AR / FOR THE RESPONDENT: / SHRI S.C.MOHANTY AR / ORDER . . . SHRI K.S.S.PRASAD RAO JUDICIAL MEMBER . THIS APPEAL IS FILED BY THE ASSESSEE HAVING BEEN AGGRIEVED BY THE ORDER DT.11.2.2010 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) FOR ASSESSMENT YEAR 2005 - 06 IN THE CASE OF THE ASSESSEE. 2. GROUNDS NO.1 AND 4 ARE GENERAL IN NATURE AND NEED NO SPECIFIC ADJUDICATION AND THEY ARE DISMISSED AS SUCH. 3. GROUND NO.3 RELATES TO ADD ITION OF 7 152 U/S.36(1)(VA) PERTAINING TO CONTRIBUTION TO EPF. AT THE TIME OF HEARING NOTHING WAS ARGUED ON THIS GROUND BY THE LEARNED AR OF THE ASSESSEE. THEREFORE GROUND NO.3 IS DISMISSED AS SUCH. I.T.A.NO. 119/CTK/2010 2 4. THE ONLY GROUND REMAINS TO BE CONSIDERED NOW IS GROUND NO. 2 WHICH RELATES TO DISALLOWANCE OF EXPENDITURE ON PAYMENT OF COMMISSION AMOUNTING TO 1 13 000 U/S.40(A)(IA) OF THE INCOME - TAX ACT 1961. 5. THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF REAL ESTATE. THE ASSESSEE COMPANY IS MAINTAIN ING REGULAR BOOKS OF ACCOUNT IN THE COURSE OF BUSINESS CONFORMING TO THE PROVISIONS OF COMPANIES ACT. THE ASSESSEE IS ASSESSED TO INCOME - TAX SINCE ITS INCEPTION AND FILING RETURNS REGULARLY. THE RETURN FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WAS FILED ON 31.10.2005 DISCLOSING TOTAL INCOME OF 2 10 792 ACCOMPANIED BY THE P & L ACCOUNT BALANCE SHEET SCHEDULES FORMING PART OF THE BALANCE SHEET AUDITORS REPORT AS PER THE PROVISIONS OF THE INCOME - TAX ACT 1961. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE ALONG WITH ITS ACCOUNTANT APPEARED FRO M TIME TO TIME WITH RELEVANT BOOKS OF ACCOUNT DOCUMENTS LEDGER ACCOUNTS SUPPORTED WITH VOUCHERS FOR EXPENSES ETC. ON VARIOUS DATES. WHILE COMPLETING THE ASSESSMENT THE ASSESSING OFFICER ADDED AN AMOUNT OF 2 15 177 TO THE TOTAL INCOME OF THE ASSESSEE WHICH INCLUDES DISALLOWANCE OF PAYMENT OF COMMISSION OF 1 13 000 U/S.40(A)(IA) OF THE ACT . AGGRIEVED WITH THIS THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A) AND GOT PART RELIEF. STILL AGGRIEVED THE ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUNA L FOR FURTHER RELIEF . 6. NOW ADVERTING THE DISPUTE RAISED IN GROUND NO.3 THE RELEVANT FACTS ARE THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF AMOUNT OF 1 13 000 PAID AS COMMISSION PAID TO BROKERS WHO APPROACHES THE LAND OWNERS AND NEGOTIATED THE SALES O F LAND TO THE ASSESSEE BY THEM. THE ASSESSING OFFICER DISALLOWED THE SAME ON THE GROUND THAT THE ASSESSEE HAS NOT DEDUCTED TAX AT I.T.A.NO. 119/CTK/2010 3 SOURCE THEREBY CONTRAVENED THE PROVISIONS CONTAINED IN SECTION 40(A)(IA) OF THE INCOME - TAX ACT 1961. IN APPEAL THE LEARNED CI T(A) CONFIRMED THE SAME. CHALLENGING THIS DISALLOWANCE THE LEARNED AR OF THE ASSESSEE CONTENDED BEFORE THE TRIBUNAL THAT THE PROVISIONS CONTAINED IN SECTION 40(A)(IA) OF THE ACT STATES THE AMOUNT PAYABLE BUT NOT PAID ALREADY. I N SUPPORT OF HIS CONTENTION HE RELIED ON THE FOLLOWING AUTHORITIES APART FROM THE PROVISIONS CONTAINED IN SECTION 40(A)(IA) OF THE ACT. A ) M/S.NEW LIFE DIAGNOSTICS V.ITO IN ITA NO.284/CTK/2008 DT.31.8.2009 (COPY PLACED ON RECORD) B ) CIT V.MOTHER INDIA REFRIGE RATIONINDUSTRIES (P) LTD (1985) 48 CTR (SC) 176 : 155 ITR 711 (SC) C ) JAIPUR VIDYUT VITARAN NIGAM LTD. V. DCIT (2009) 123 TTJ (JP) 888 D ) M/S. TEJA CONSTRUCTIONS V. ACIT IN ITA NO.308/HYD/2009 DT.23.10.2009 (COPY PLACED ON RECORD) AND E ) CBDT CIRCULAR NO. 5 OF 2005 DT.15.7.2005 [197 CTR (ST) 1]. IN ALL THESE DECISIONS THE CONCLUSION REACHED BY DIFFERENT FORUMS IS THAT THE PROVISIONS CONTAINED IN SECTION 40(A)(IA) APPLIES TO THE AMOUNTS PAYABLE BUT NOT PAID. IN THE PRESENT CASE ON HAND THE AMOUNT HAS ALREADY BEEN PAID BY THE ASSESSEE ADMITTEDLY. THEREFORE THE PROVISIONS OF SECTION 40(A)(IA) IS NOT AT ALL APPLICABLE FOLLOWING THE RULE OF LIBERAL CONSTRUCTION OF TAXING PROVISIONS. THEREFORE THE LEARNED AR OF THE ASSESSEE SOUGHT DELETION OF THE DISALLOWANCE MAD E BY THE LOWER AUTHORITIES. CONTRARY TO THIS THE LEARNED DR VEHEMENTLY ARGUED IN SUPPORT OF THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. 7. ON PERUSAL OF THE ABOVE STATED ORDERS OF THE TRIBUNAL AS WELL AS THE DECISIONS OF HONBLE SUPREME COURT AND THE C BDT CIRCULAR NO.5 OF 2005 DT.15.7.2005 I AM OF THE CONSIDERED VIEW THAT THE STAND TAKEN BY THE I.T.A.NO. 119/CTK/2010 4 ASSESSEE THAT THE TDS AS MENTIONED IN SECTION 40(A)(IA) IS ONLY ON AMOUNTS REMAINED PAYABLE BUT NOT THE AMOUNTS PAID ALREADY IS CORRECT . THEREFORE RESPECTF ULLY FOLLOWING THE RULE OF PRECEDENCE THE DISALLOWANCE MADE BY THE DEPARTMENTAL AUTHORITIES IS NOT SUSTAINABLE FOR LEGAL SCRUTINY AND HENCE THE SAME IS HEREBY DIRECTED TO BE DELETED BY ALLOWING THE GROUND RAISED BY THE ASSESSEE IN THIS REGARD. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 09.03.2011 SD/ - ( . . . ) (K.S.S.PRASAD RAO) JUDICIAL MEMBER. ( ) DATE: 09.03.2011 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : M/S.ALISHAN REALCON PVT. LTD. 262 SAHEED NAGAR BHUBANESWAR. 2 / THE RESPONDENT: INCOME - TAX OFFICER KHURDA WARD KHURDA. 3 . / THE CIT 4 . ( )/ THE CIT(A) 5 . / DR CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY / BY ORDER [ ] SENIOR PRIVATE SECRETARY ( ) ( H.K.PADHEE ) SENIOR.PRIVATE SECRETARY.