Shri Ansara Ejaz Ahmed, Ahmedabad v. The Income tax Officer,Ward-9(2),, Ahmedabad

ITA 2238/AHD/2008 | 2005-2006
Pronouncement Date: 01-10-2010 | Result: Allowed

Appeal Details

RSA Number 223820514 RSA 2008
Assessee PAN ADFPA1379Q
Bench Ahmedabad
Appeal Number ITA 2238/AHD/2008
Duration Of Justice 2 year(s) 3 month(s) 20 day(s)
Appellant Shri Ansara Ejaz Ahmed, Ahmedabad
Respondent The Income tax Officer,Ward-9(2),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 01-10-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 01-10-2010
Date Of Final Hearing 25-08-2010
Next Hearing Date 25-08-2010
Assessment Year 2005-2006
Appeal Filed On 11-06-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABA D (BEFORE HON'BLE SHRI T.K. SHARMA J.M. & HONBLE S HRI N.S. SAINI A.M.) I.T.A. NO. 2238/AHD./2008 ASSESSMENT YEAR : 2005-2006 ANSARA EJAZ AHMED AHMEDABAD -VS.- INCOME TAX OFFICER WARD-9(2) AHMEDABAD (PAN : ADFPA 1379 Q) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NIMISH VAYAWALA RESPONDENT BY : SHRI K. MADHUSUDAN SR . D.R. O R D E R PER SHRI T.K. SHARMA JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 04.03.2008 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-XV AHMEDABAD FOR THE ASSESSMENT YEAR 2005-06. 2. THE ONLY GROUND RAISED BY THE ASSESSEE IN HIS AP PEAL IS AS UNDER :- 1. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDI TION OF RS.7 54 818/- U/S. 40(A)(IA). IN VIEW OF THE FACTS AS WELL AS LAW IT IS NOT DISAL LOWABLE. IT IS PRAYED THAT IT SHOULD BE ALLOWED. 3. BRIEF FACTS RELATING TO CONTROVERSY INVOLVED IN THE AFORESAID GROUND OF APPEAL IS THAT IN THE ASSESSMENT ORDER THE ASSESSING OFFICER OBSERVED TH AT THE ASSESSEE MADE PAYMENTS TO SUB- CONTRACTOR/ CONTRACTOR IN VIOLATION OF SECTION 40(A )(IA) OF THE ACT. HE ACCORDINGLY DISALLOWED RS.7 54 818/-. THE DETAILS OF THIS DISALLOWANCE IS AS UNDER :- SR. NO. NAME OF PARTY NATURE OF PAYMENT AMOUNT PAID ON WHICH TAX HAS NOT BEEN DEDUCTED OR AFTER DEDUCTION PAID LATE IN CONTRAVENTION OF SECTION 40(A)(IA) 1. MARUTI TRANSPORT CARTING RS.3 53 964/- 2. S. KUMAR TRANSPORT LABOUR RS. 33 930/- 3. PRAVINKUMAR K. ODD LABOUR RS.2 25 689/- 4. HIND FABRICATOR LABOUR RS.1 41 235/- RS.7 54 818/- 2 ITA NO. 2238/AHD/2008 4. ON APPEAL IN THE IMPUGNED ORDER THE LEARNED CO MMISSIONER OF INCOME TAX(APPEALS) CONFIRMED THE DISALLOWANCE OF RS.7 54 818/- BY OBSE RVING AS UNDER :- 9. IN THIS CASE THE APPELLANT VIOLATED TDS PROVIS IONS U/S. 194-C WHICH REQUIRES TDS TO BE DEDUCTED AT THE TIME OF PA YMENT OR CREDIT WHICHEVER IS EARLIER. THE APPELLANT MADE THE PAYMEN T TO THE CONTRACTORS BUT DID NOT DEDUCT TDS. TDS WAS DEDUCTED WHEN THE B ILLS WERE POSTED OR ACCOUNTS CREDITED OF THE CONTRACTORS. IN MY VIEW 4 0A(IA) IS ATTRACTED BECAUSE NO TDS WAS DEDUCTED AT THE TIME OF PAYMENT. THE ADDITION OF RS.7 54 818/- IS CONFIRMED. AGGRIEVED BY THE ORDER OF LEARNED COMMISSIONER OF I NCOME TAX(APPEALS) THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING ON BEHALF OF ASSESSEE SH RI NIMISH VAYAWALA LD. COUNSEL APPEARED AND SUBMITTED THE DETAILS OF TDS DEDUCTION AND DEPO SITED TO THE GOVERNMENT WHICH IS AS UNDER :- NAME OF THE PARTY DATE OF PAYMENT/ CREDIT AMOUNT TDS DEDUCTION TDS DEPOSITED HIND FABRICATORS 15.05.2004 26 725/- 15.05.2004 RS.275/- 05.04.2004 RS.275/- HIND FABRICATORS 07.01.2005 1 14 510/- 07.01.2005- RS.1 020/- 05.04.2005 RS.1 020 PRAVINKUMAR KANTILAL ODD 06.05.2004 2 25 689/- 06.05.2004 RS.2 325/- 05.04.2005 RS.2 325/- S. KUMAR TRANSPORT 31.03.2005 33 930/- 31.03.2005 RS.350/- 05.04.2005 RS.350/- TOTAL 4 00 854/- RS.3 970/- RS.3 970/- MARUTI TRANSPORT 09.05.2004 69 090/- NO TDS MARUTI TRANSPORT 15.05.2004 67 145/- NO TDS MARUTI TRANSPORT 21.05.2004 49 660/- NO TDS MARUTI TRANSPORT 31.05.2004 14 795/- NO TDS MARUTI TRANSPORT 30.06.2004 3 575/- NO TDS MARUTI TRANSPORT 31.07.2004 12 712/- NO TDS MARUTI TRANSPORT 31.07.2004 26 275/- NO TDS MARUTI TRANSPORT 30.09.2004 37 337/- NO TDS MARUTI TRANSPORT 31.10.2004 27 262/- NO TDS 3 ITA NO. 2238/AHD/2008 MARUTI TRANSPORT 31.12.2004 1 250/- NO TDS MARUTI TRANSPORT 31.12.2004 13 413/- NO TDS MARUTI TRANSPORT 28.02.2005 25 000/- NO TDS MARUTI TRANSPORT 31.03.2005 6 450/- NO TDS TOTAL RS.3 53 964/- TOTAL PAYMENT DISALLOW TO CONTRACTOR U/S. 40(A)(IA) RS.7 54 818/- IN RESPECT OF FIRST FOUR ITEMS OF THE AFORESAID TAB LE THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT TDS TO THE EXTENT OF RS.4 00 854/- WAS DEDUCTED AND DEPOSITED BEFORE THE DUE DATE OF FURNISHING THE RETURN OF INCOME. THE LD. COUNSEL OF THE ASSESS EE FURTHER SUBMITTED THE FOLLOWINGS :- (1) THE TDS DEDUCTED IN MARCH AND PAID BEFORE FILING OF RETURN SHOULD BE CONSIDERED AS ENOUGH COMPLIANCE IN VIEW OF AMENDMEN T AS ENOUGH COMPLIANCE IN VIEW OF THE AMENDMENT (BAPUSAHEB NANA SAHEB DHUMAL VS.- ACIT IN ITA 6628/MUM./2009). (2) THE AMENDMENT BROUGHT IN BY FINANCE ACT 2010 SHOUL D BE APPLIED RETROSPECTIVELY CONSIDERING THE SAME AS RETROSPECTI VE IN NATURE. IF ONLY ELIMINATES THE UNINTENDED HARDSHIP ALLIED MOTORS LTD. VS.- CIT [224 ITR 677 (SC)]; PATEL FILTERS LTD. VS.- CIT [264 ITR 21]; CIT VS.- CHANDULAL VENICHAND [209 ITR 7]; CIT VS.- AHOM EXTRUSIONS LTD. [319 ITR 306]. IN THE ABOVE DECISIONS THE PROVISO TO SECTION 43B I NSERTED TO REMOVE UNINTENDED HARDSHIP AND IS CURATIVE IN NATURE. (3) THE 40(I)(A) APPLIES ONLY WHEN THE SUM IS OUTSTANDI NG AND IS SHOWN AS SUCH IN BALANCE SHEET IS NOT APPLICABLE. JAIPUR VIDHUT NIGAM LTD. VS.- ACIT [123 TTJ (JD.); TEJA CONSTRUCTIONS VS.- ACIT (2010) 36 DTR (HYD.) 220. (4) THE INVOICES OF MARUTI TRANSPORT FILED IN PAPER BOO K ARE INCLUSION OF OCTROI CHARGES. THE ACCOUNT ALSO DENOTES PAYMENT FOR FREIG HT AND OCTROI. THE OCTROI CHARGES ARE JUST THE REIMBURSEMENT HENCE THE SAID A MOUNT IS NOT LIABLE TO TDS THE CASE MAY BE SET ASIDE TO ASCERTAIN THE ACT UAL OCTROI AMOUNT. 6. ON THE OTHER HAND SHRI K. MADHUSUDAN LD. SR. D .R. APPEARING ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF LEARNED COMMISSIO NER OF INCOME TAX(APPEALS). HE POINTED 4 ITA NO. 2238/AHD/2008 OUT THAT THE AMENDMENT BROUGHT IN BY THE FINANCE AC T 2010 IS NOT RETROSPECTIVE IN NATURE. WITH REGARD TO THE DECISION DATED 23.10.2009 OF ITAT A BENCH HYDERABAD IN ITA NO. 308/HYD./2009 FOR THE ASSESSMENT YEAR 2005-06 IN TH E CASE OF TEJA CONSTRUCTIONS VS.- ACIT REPORTED IN (2010) 36 DTR (HYD.) (TRIB.) 220 RELIED BY THE LD. COUNSEL OF THE ASSESSEE THE LD. D.R. POINTED OUT THAT SECTION 40 STARTS WITH NON-OB STANTE CLAUSE. HE POINTED OUT THAT CLAUSE (IA) OF SECTION 40 AT THE RELEVANT TIME READS AS UNDER :- (IA) ANY INTEREST COMMISSION OR BROKERAGE [RENT ROYALTY] FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICE S PAYABLE TO A RESIDENT OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB -CONTRACTOR BEING RESIDENT FOR CARRYING OUT ANY WORK (INCLUDING SUPP LY OF LABOUR FOR CARRYING OUT ANY WORK) ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED O R AFTER DEDUCTION HAS NOT BEEN PAID DURING THE PREVIOUS YEAR OR IN T HE SUBSEQUENT YEAR BEFORE THE EXPIRY OF THE TIME PRESCRIBED UNDER SUB- SECTION (1) OF SECTION 200 : PROVIDED THAT WHERE IN RESPECT OF ANY SUCH SUM TAX HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR OR HAS BEEN DEDUCTED IN THE PREVIOUS YEAR BUT PAID IN ANY SUBSEQUENT YEAR AFTER THE EXPIRY OF THE TIME PRESCRIBED UNDER SUB-SECTION (1) OF SECTION 200 SUCH SUM SHAL L BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME OF THE PREVIOUS Y EAR IN WHICH SUCH TAX HAS BEEN PAID. 6.1. THE LD. D.R. POINTED OUT THAT FROM THE PERUSAL OF AFORESAID SECTION IT IS CLEAR THAT THE ASSESSEE WAS NOT ONLY REQUIRED TO DEDUCT TDS BUT AL SO REQUIRED TO PAY THE SUM DURING THE PREVIOUS YEAR OR IN SUBSEQUENT YEARS BEFORE THE EXP IRY OF TIME PRESCRIBED UNDER SUB-SECTION (1) OF SECTION 200. AS PER PROVISO TO SECTION (IA) OF S ECTION 40 IN CASE SUCH SUM IS DEDUCTED IN ANY SUBSEQUENT YEAR OR HAS BEEN DEDUCTED IN THE PREVIOU S YEAR BUT PAID IN SUBSEQUENT YEAR AFTER THE EXPIRY OF TIME PRESCRIBED IN THAT EVENT SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME OF PREVIOUS YEAR IN WHICH SUCH TAX HAS BEEN PAID. THE LD. D.R. SUBMITTED THAT THIS ASPECT HAS BEEN COMPLETELY IGNORED BY THE ITAT A BENCH HYDERABAD IN ITA NO. 308/HYD./2009 FOR THE ASSESSMENT YEAR 2005-06 IN THE CASE OF TEJA CON STRUCTIONS (SUPRA). TO SUM UP THE LD. D.R. SUBMITTED THAT ON PLAIN READING OF SECTION 40(A)(IA ) DISALLOWANCE MADE BY THE ASSESSING OFFICER IS RIGHTLY CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 7. HAVING HEARD BOTH THE SIDES WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT AMENDED PROVISI ONS WERE NOT CONSIDERED BY LEARNED 5 ITA NO. 2238/AHD/2008 COMMISSIONER OF INCOME TAX (APPEALS) IN THE IMPUGNE D ORDER. WHETHER THE AMENDMENT BROUGHT IN BY FINANCE ACT 2010 SHOULD BE APPLIED RETROSPEC TIVELY OR NOT ALSO NEEDS CONSIDERATION FIRST BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS). WE T HEREFORE SET ASIDE THE IMPUGNED ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN RES PECT OF THE AFORESAID GROUND OF APPEAL AND DIRECT HIM TO RE-DECIDE THE DISALLOWANCE OF RS.7 54 818/- UNDER SECTION 40(A)(IA) AFRESH AFTER CONSIDERING THE AMENDED LAW AS WELL AS VARIOUS CONT ENTIONS OF THE ASSESSEE AFTER GIVING OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. 8. IN THE RESULT FOR STATISTICAL PURPOSES THE APP EAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 01.10.201 0 SD/- SD/- (N.S. SAINI) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 01 / 10 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT CONCERNED (4) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGIS TRAR ITAT AHMEDABAD LAHA/SR.P.S.