M/s. B. Nanji A, Ahmedabad v. ITO, Ward-3(3)(12), Ahmedabad

ITA 1858/AHD/2018 | 2012-2013
Pronouncement Date: 13-05-2021 | Result: Allowed

Appeal Details

RSA Number 185820514 RSA 2018
Assessee PAN AAKFB3025G
Bench Ahmedabad
Appeal Number ITA 1858/AHD/2018
Duration Of Justice 2 year(s) 8 month(s) 13 day(s)
Appellant M/s. B. Nanji A, Ahmedabad
Respondent ITO, Ward-3(3)(12), Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 13-05-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 13-05-2021
Last Hearing Date 23-03-2020
First Hearing Date 23-03-2020
Assessment Year 2012-2013
Appeal Filed On 30-08-2018
Judgment Text
SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH AHMEDABAD ( CONVENED THROUGH VIRTUAL COURT ) BEFORE SHRI PRADIP KUMAR KEDIA ACCOUNTANT MEMBER & SMT. MADHUMITA ROY JUDICIAL MEMBER ./ I.T.A. NO. 1858/AHD/2018 ( ASSESSMENT YEAR : 2012-13) M/S. B. NANJI A. MEHTA LODHA & CO. CHARTERED ACCOUNTANTS 105 SAKAR-1 NEAR GANDHIGRAM RAILWAY STATION OFF ASHRAM ROAD AHMEDABAD - 380009 / VS. THE INCOME TAX OFFICER WARD -3(3)(12) PRATYAKSH KAR BHAVAN AMBAWADI AHMEDABAD 380015 ./ ./ PAN/GIR NO. : AAKFB3025G ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI P. D. SHAH A.R. / RESPONDENT BY : SHRI KAMLESH MAKWANA SR.D.R. DATE OF HEARING 23/03/2021 !'# / DATE OF PRONOUNCEMENT 13/05/2021 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX ITA NO. 1858/AHD/18 [M/S. B. NANJI A. VS. ITO] A.Y. 2012-13 - 2 - (APPEALS)-3 AHMEDABAD (CIT(A) IN SHORT) DATED 2 7.02.2018 ARISING IN THE ASSESSMENT ORDER DATED 26.03.2015 PA SSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3) R.W.S. 147 O F THE INCOME TAX ACT 1961 (THE ACT) CONCERNING AY 2012-13. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE REA D HEREUNDER: 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND FA CTS BY PASSING WITHOUT GIVING PROPER OPPORTUNITY OF HEARIN G AND CONSIDERING THE MATERIAL ON RECORD AND THEREFORE TH E ID.AO SHOULD BE DIRECTED TO DELETE THE ADDITION/DISALLOWA NCES MADE AND ACCEPT THE RETURNED INCOME. 2. THAT THE LEARNED C1T(A) HAS ERRED IN LAW AND FA CTS BY CONFIRMING THE DISALLOWANCE OF INTEREST OF RS. 15 0 0 681/- UNDER SECTION 40(A)(IA) OF THE ACT AND THEREFORE T HE LEARNED AO SHOULD BE DIRECTED TO ALLOW THE SAID INTEREST EX PENSE WHILE COMPUTING THE TOTAL INCOME. 3. BRIEFLY STATED THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN CONSTRUCTION DEVELOPMENT AND SELLING OF REAL ESTAT E ETC. THE ASSESSEE FILED RETURN OF INCOME FOR AY 2012-13 DECL ARING TOTAL INCOME AT RS.1 17 528/-. THE RETURN FILED BY THE A SSESSEE WAS SUBJECTED TO SCRUTINY ASSESSMENT UNDER S.143(3) OF THE ACT. IN THE COURSE OF THE ASSESSMENT THE AO INTER ALIA OBSERVED THAT THE ASSESSEE HAS CLAIMED INTEREST EXPENDITURE OF RS.50 78 412/- ON DEPOSITS RECEIVED. THE AO NOTED THAT THE ASSESSEE HAS NOT DEDUCTED TDS ON INTEREST PAYMENT OF RS.15 00 681/- REQUIRED UNDER S.194A OF THE ACT OUT OF AFORESAID TOTAL INTE REST PAYMENT OF RS.50 78 412/-. THE AO ACCORDINGLY INVOKED PROVISI ONS OF SECTION 40(A)(IA) FO THE ACT AND DISALLOWED THE EXP ENSES CLAIMED TOWARDS INTEREST EXPENDITURE TO THE EXTENT OF RS.15 681/-. ITA NO. 1858/AHD/18 [M/S. B. NANJI A. VS. ITO] A.Y. 2012-13 - 3 - 4. AGGRIEVED THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). THE CIT(A) ALSO DID NOT ENTERTAIN THE GRIEVANCE OF THE ASSESSEE AND DISMISSED THE APPEAL. 5. AGGRIEVED FURTHER THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. 6. WHEN THE MATTER WAS CALLED FOR HEARING THE LEAR NED AR FOR THE ASSESSEE AT THE OUTSET SUBMITTED THAT THE APP EAL HAS BEEN FILED BELATEDLY BY 124 DAYS. THE LEARNED AR ADVERT ED TO AN AFFIDAVIT SHOWING THE CAUSE WHICH PREVENTED THE ASS ESSEE TO FILE APPEAL IN TIME. WE HAVE PERUSED THE AFFIDAVIT CITI NG THE REASONS SUCH AS CHANGE OF CHARTERED ACCOUNTANT FINANCIAL CRISIS ETC. RESULTING IN SHORT DELAY. WE FIND THE CIRCUMSTANCE S FOR DELAY TO BE MITIGATING IN NATURE IN THE CONTEXT OF THE CASE. THE SHORT DELAY OF 124 DAYS IN FILING APPEAL BEFORE THE TRIBUNAL IS ACCORDINGLY CONDONED. 7. ON MERITS THE LEARNED AR SUBMITTED THAT THE ASS ESSEE HAS INCURRED INTEREST EXPENSES OF RS.50 78 412/- WHEREA S THE TDS HAS NOT BEEN DEDUCTED ONLY FOR AN AMOUNT OF RS.15 00 68 1/- FOR THE REASONS THAT THE DEPOSITORS HAD FURNISHED DECLARATI ON OBLIGED UNDER S.197A(1) IN PRESCRIBED FORM NO.15G CLAIMING THAT INTEREST INCOME IN THEIR RESPECTIVE HANDS DOES NOT REQUIRE D EDUCTION OF TAX. THE LEARNED AR ADVERTED TO 15G COPIES SO RECE IVED FROM VARIOUS PARTIES AS PLACED ON RECORD. THE LEARNED A R ALSO RELIED UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. VALIBHAI KHANBHAI MANKAT 261 CTR 539 (GUJ) FOR THE PROPOSITION THAT ONCE FORM NO.15G HAS BEEN RECEIVED BY THE ASSESSEE DISALLOWANCE UNDER S.40(A)(IA) OF THE ACT IS UNCALLED FOR ITA NO. 1858/AHD/18 [M/S. B. NANJI A. VS. ITO] A.Y. 2012-13 - 4 - DESPITE ITS ALLEGED NON-SUBMISSION TO THE DEPARTMEN T. HE ALSO REFERRED TO THE DECISION OF THE CO-ORDINATE BENCH O F TRIBUNAL IN ACIT VS. BANSAL SHIP BREAKERS PVT. LTD. ITA NO. 234 8/AHD/2012 ORDER DATED 23.07.2019. LEARNED AR ACCORDINGLY URG ED FOR REVERSAL OF THE ACTION OF THE REVENUE AUTHORITIES. 8. THE LEARNED DR ON THE OTHER HAND RELIED UPON T HE ORDER OF THE CIT(A). 9. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND CIT(A). THE SOLITARY ISSUE ARISES IN TH E INSTANT CASE IS WHETHER DISALLOWANCE UNDER S.40(A)(IA) OF THE AC T CAN BE CARRIED OUT WHERE THE PAYEE DENIES THE LIABILITY UN DER S.194A OF THE ACT AND HAS FURNISHED REQUISITE FORM 15G SO PRE SCRIBED IN LAW TO THE ASSESSEE IN THIS REGARD. WE FIND THAT THE I SSUE IS ABSTRACT IN NATURE AND IS SQUARELY COVERED BY THE LEGAL PROPOSI TION LAID DOWN BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. VALIBHAI KHANBHAI MANKAT (2013) 261 CTR 539 (GUJ) . THE HONBLE GUJARAT HIGH COURT HELD IN THE CONTEXT OF SECTION 1 94C OF THE ACT THAT WHERE THE LIABILITY OF THE PAYEE HAS CEASED TO WARDS DEDUCTION OF TAX AT SOURCE ON FURNISHING THE REQUISITE DECLAR ATION ANY INFRACTION OF THE REQUIREMENT TO FURNISH DETAILS OF THE INCOME TAX AUTHORITY IN THIS REGARD MAY POSSIBLY RESULT INTO S OME OTHER ADVERSE CONSEQUENCES TO THE PAYER IF SO PROVIDED UN DER THE ACT BUT HOWEVER NON-FULFILLMENT OF SUCH REQUIREMENT WOU LD NOT ATTRACT ADVERSE CONSEQUENCES PROVIDED UNDER S.40(A)(IA) OF THE ACT. THE OBLIGATION UNDER S.194A OF THE ACT STANDS DISCHARGE D FOR THE PURPOSES OF S.40(A)(IA) OF THE ACT WHERE PRESCRIBED FORM IS FURNISHED BY THE PAYEE TO THE ASSESSEE. WHEN RATIO OF THE DECISION OF THE HONBLE GUJARAT HIGH COURT IS APPLIED MUTATIS MUTANDIS TO ITA NO. 1858/AHD/18 [M/S. B. NANJI A. VS. ITO] A.Y. 2012-13 - 5 - THE FACT PLACED BEFORE US IN THE CONTEXT OF SECTION 194A OF THE ACT WE FIND SUBSTANTIVE MERIT IN THE PLEA RAISED O N BEHALF OF THE ASSESSEE. THE DISALLOWANCE UNDER S.40(A)(IA) OF TH E ACT IS THUS NOT JUSTIFIED. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED. SD/- SD/- (MADHUMITA ROY) (PRADIP KUMAR K EDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 13/05/2021 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ / CONCERNED CIT 4. - / CIT (A) /. 012 33*+4 *+#4 56) / DR ITAT AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 13/05/20 21