The ITO, Ward-9(1),, Ahmedabad v. M/s. Shri Ram Builders,, Ahmedabad

ITA 2448/AHD/2010 | 2005-2006
Pronouncement Date: 21-12-2011 | Result: Dismissed

Appeal Details

RSA Number 244820514 RSA 2010
Assessee PAN AARFS2706C
Bench Ahmedabad
Appeal Number ITA 2448/AHD/2010
Duration Of Justice 1 year(s) 4 month(s) 16 day(s)
Appellant The ITO, Ward-9(1),, Ahmedabad
Respondent M/s. Shri Ram Builders,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 21-12-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 21-12-2011
Date Of Final Hearing 18-11-2011
Next Hearing Date 18-11-2011
Assessment Year 2005-2006
Appeal Filed On 04-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD BEFORE SHRI G. C. GUPTA HONBLE VICE PRESIDENT AND SHRI A. K. GARODIA ACCOUNTANT MEMBER I.T.A. NO. 2448/ AHD/2010 (ASSESSMENT YEAR 2005-06) ITO WARD 9(1) AHMEDABAD VS. M/S. SHRI RAM BUILDERS 73 RATNADEEP SOCIETY MALPUR ROAD DISTT. SBARKANTHA MODERA -383315 PAN/GIR NO. : AARFS2706C (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI SAMIR TEKRIWAL SR. DR RESPONDENT BY: SHRI M THAKKAR AR DATE OF HEARING: 18.11.2011 DATE OF PRONOUNCEMENT: 21.12.2011 O R D E R PER SHRI A. K. GARODIA AM:- THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDE R OF LD. CIT(A) XV AHMEDABAD DATED 31.05.2010 FOR THE ASSESSMENT Y EAR 2005-06. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1). THE ID. COMMISSIONER OF INCOME-TAX (A)-XV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENAL TY IMPOSED ON RS.79 20 9707- FOR VIOLATION OF 40(A)(IA) PROVISION S. 2). THE ID. COMMISSIONER OF INCOME-TAX (A)-XV AHMEDABA D HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENAL TY OF RS.71 6867- FOR ADDITION MADE ON ACCOUNT OF DISALLOWANCES OUT O F INTEREST EXPENSES. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT[A] -XV AHMEDABAD OUGHT TO HAVE UPHELD THE ORDE R OF THE ASSESSING OFFICER. I.T.A.NO. 2448 /AHD/2010 2 4) IT IS THEREFORE PRAYED THAT THE ORDER OF THE ID. C OMMISSIONER OF INCOME-TAX(A)-XV AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE A.O. IM POSED PENALTY OF RS.35 88 313/- U/S 271(1)(C) OF THE ACT IN RESPECT OF FOLLOWING ADDITIONS/DISALLOWANCES:- I) DISALLOWANCE U/S 40(A)(IA) 95 14 320/- II) DISALLOWANCE OUT OF PLANT VEHICLE TYPE EXP. 6 08 631/- III) DISALLOWANCE OUT OF PLANT VEH. MAINT EXP. 10 10 857/- IV) DISALLOWANCE OUT OF INTEREST EXP. 71 686/ - V) NSC INTEREST NOT SHOWN IN THE RETURN 2 31 85 1/-. 3. THE DISALLOWANCE U/S 40(A)(IA) IS IN TWO PARTS. IT INCLUDES AN AMOUNT OF RS.79 20 970/- FOR THE TDS LATE DEPOSITED IN THE MONTH OF MAY-JUNE 2005 INSTEAD OF DEPOSITING THE SAME IN THE MONTH OF MARCH 2005. AN AMOUNT OF RS.21 68 558/- IS FOR WHICH NO TDS WAS DEDUCTED BY THE ASSESSEE. LD. CIT(A) HAS DELETED THE PART W ITH REGARD TO THIS AMOUNT OF RS.79 20 970/- IN CONNECTION WITH WHICH TDS WAS ACTUALLY DEPOSITED IN THE MONTH OF MAY-JUNE 2005 INSTEAD OF DEPOSITING THE SAME IN THE MONTH OF MARCH 2005 BY HOLDING THAT THIS IS MERELY A TECHNICAL BREACH ON THE PART OF THE ASSESSEE FOR DELAY IN DEP OSIT OF TDS IN THE GOVERNMENT ACCOUNT. HE HAS DELETED PENALTY IN RESP ECT OF DISALLOWANCE OF RS.71 686/- OUT OF INTEREST EXPENSES BY HOLDING THAT THIS DISALLOWANCE WAS MADE ON ESTIMATE BASIS AND THEREFORE PENALTY IS NOT JUSTIFIED. REGARDING OTHER DISALLOWANCES PENALTY HAS BEEN CON FIRMED BY THE LD. CIT(A) AND IT WAS BROUGHT TO OUR NOTICE BY THE LD. A.R. THAT NO APPEAL HAS BEEN FILED BY THE ASSESSEE IN RESPECT OF THE PE NALTY CONFIRMED BY THE LD. CIT(A). NOW THE REVENUE IS IN APPEAL BEFORE U S FOR THE PENALTY DELETED BY LD. CIT(A) IN RESPECT OF THESE TWO DISAL LOWANCES OF RS.79 20 970/- U/S 40(A)(IA) AND RS.71 686/- ON ACC OUNT OF DISALLOWANCE OF INTEREST EXPENSES. I.T.A.NO. 2448 /AHD/2010 3 4. LD. D.R. OF THE REVENUE SUPPORTED THE PENALTY OR DER AND RELIANCE WAS PLACED BY HIM ON THE JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF ZOOM COMMUNICATIONS AS REPORTED IN 3 27 ITR 501. 5. AS AGAINST THIS LD. A.R. OF THE ASSESSEE SUPPOR TED THE ORDER OF LD. CIT(A). RELIANCE WAS PLACED BY HIM ON THE TRIBUNAL DECISION RENDERED IN THE CASE OF ACIT VS SARASWATI CONST. CO. IN I.T.A.N O. 2865/AHD/2010 DATED 22.02.2011. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT REGARDING THE DISALLOWANCE U/S 40(A)(IA) THE TDS WAS DEDUCTED BY THE ASSESSEE IN THE MONTH OF MARCH 20005 BUT THE PA YMENT FOR THE SAME WAS MADE IN THE MONTH OF MAY-JUNE 2005. THE PROVIS IONS OF SECTION 40(A)(IA) WERE AMENDED BY THE FINANCE ACT 2008 WITH RETROSPECTIVE EFFECT FROM 01.04.2005 AND SO AMENDED PROVISIONS ARE AS UN DER: 40. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SE CTION 30 TO [38] THE FOLLOWING AMOUNTS SHALL NOT BE DEDUCTED IN COMP UTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION - (A) IN THE CASE OF ANY ASSESSEE- [(I) ANY INTEREST (NOT BEING INTEREST ON A LOAN ISS UED FOR PUBLIC SUBSCRIPTION BEFORE THE 1ST DAY OF APRIL 1938) RO YALTY FEES FOR TECHNICAL SERVICES OR OTHER SUM CHARGEABLE UNDER TH IS ACT WHICH IS PAYABLE (A) OUTSIDE INDIA; OR (B) IN INDIA TO A NON-RESIDENT NOT BEING A COMPANY OR TO A FOREIGN COMPANY ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR AFTER DEDUCTION HAS NOT BEEN PAID DURING THE PREVIOUS YEAR OR IN THE S UBSEQUENT 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 BEER - DEDUCTED IN ANY SUBSEQUENT YEAR OR HAS BEEN DEDUCT ED IN THE PREVIOUS YEAR BUT PAID IN ANY SUBSEQUENT YEAR AFTER THE EXPIRY OF I.T.A.NO. 2448 /AHD/2010 4 THE TIME PRESCRIBED UNDER SUB-SECTION (1) OF SECTIO N 200 SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING THE IN COME OF THE PREVIOUS YEAR IN WHICH SUCH TAX HAS BEEN PAID. EXPLANATION. FOR THE PURPOSES OF THIS SUB-CLAUSE (A) 'ROYALTY' SHALL HAVE THE SAME MEANING AS IN EXPLANATION 2 TO CLAUSE (VZ) OF SUB-SECTION (1) OF SECTION 9; (B) 'FEES FOR TECHNICAL SERVICES' SHALL HAVE THE SAME M EANING AS IN EXPLANATION 2 TO CLAUSE (VII) OF SUB-SECTION (1) OF SECTION 9; (ID) ANY INTEREST COMMISSION OR BROKERAGE 19 [RENT ROYALTY ] FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SER VICES PAYABLE TO A RESIDENT OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB -CONTRACTOR BEING RESIDENT FOR CARRYING OUT ANY WORK (INCLUDIN G SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK) ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BE EN DEDUCTED OR AFTER DEDUCTION 20 [-'HAS NOT BEEN PAID (A) IN A CASE WHERE THE TAX WAS DEDUCTIBLE AND WAS SO DEDUCTED DURING T HE LAST MONTH OF THE PREVIOUS YEAR ON OR BEFORE THE DUE DATE SPE CIFIED IN SUB- SECTION (1) OF SECTION 139; OR (B) IN ANY OTHER CASE ON OR BEFORE THE LAST DAY OF THE PREVIOUS YEAR ' ] 7. FROM THE ABOVE PROVISIONS OF SECTION 40(A)(IA) A S APPLICABLE IN ASSESSMENT YEAR 2005-06 AS PER THIS RETROSPECTIVE A MENDMENT IT IS SEEN THAT IF THE TDS WAS DEDUCTIBLE IN MARCH 2005 AND W AS SO DEDUCTED IN THE MONTH OF MARCH 2005 THEN THE SAME COULD HAVE BEEN PAID BY THE ASSESSEE BEFORE THE DUE DATE SPECIFIED IN SUB-SECTI ON (1) OF SECTION 139 AND OTHERWISE IT WAS REQUIRED TO BE PAID BEFORE 31 .03.2005. THEREAFTER THERE IS ONE MORE AMENDMENT IN THE YEAR 2010 WITH E FFECT FORM 01.04.2010 AND THERE WAS A LOT OF DEBATE AS TO WHET HER THIS IS RETROSPECTIVE OR NOT. IN THE PRESENT CASE AS PER THE COPY OF TDS MADE AVAILABLE TO US THE TDS ACCOUNT WAS DEDUCTED IN TH E MONTH OF MARCH 2005 BUT THIS FACT IS NOT AVAILABLE ON RECORD AS TO WHETHER THE SAME WAS DEDUCTIBLE ALSO IN THE MONTH OF MARCH 2005 OR WAS D EDUCTIBLE EARLIER. BUT EVEN THEN WE FIND THAT THIS WAS A DEBATABLE IS SUE AND VERY RECENTLY THE SAME HAS BEEN SETTLED BY THE DECISION OF SPECIA L BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF BHARTIA SHIPYARD LTD. VS. D CIT AS REPORTED IN 132 I.T.A.NO. 2448 /AHD/2010 5 ITD 53 AND THE DISPUTE WAS AS TO WHETHER THIS AMEND MENT IN SECTION 40(A)(IA) IS RETROSPECTIVE OR PROSPECTIVE. IN THE DECISION RENDERED IN THIS CASE THIS ASPECT HAS BEEN SETTLED AND IT WAS HELD THAT THIS AMENDMENT IS NOT RETROSPECTIVE. HENCE IT IS CLEAR THAT THIS WA S A DEBATABLE ISSUE AND HENCE WHILE DISALLOWANCE IS ALRIGHT BUT PENALTY IS NOT JUSTIFIED UNDER THESE FACTS. WITH REGARD TO DISALLOWANCE U/S 40(A) (IA) THE TRIBUNAL DECISION RENDERED IN THE CASE OF ACIT VS SARASWATI CONSTRUCTION (SUPRA) IS ALSO SUPPORTING THE CASE OF THE ASSESSEE BECAUSE IN THAT CASE ALSO THE ISSUE INVOLVED WAS REGARDING DISALLOWANCE U/S 40(A) (IA) AND IT WAS HELD BY THE TRIBUNAL IN THAT CASE THAT PENALTY IS NOT LI VABLE U/S 271(1)(C) IN RESPECT OF LEGAL FICTION CREATED BY SECTION 40(A)(I A) BECAUSE THERE IS NO FURNISHING OF INACCURATE PARTICULARS OF INCOME OR C ONCEALMENT OF INCOME. SO FAR THE JUDGEMENT OF HONBLE DELHI HIGH COURT CI TED BY LD. DR IS CONCERNED WE FEEL THAT THIS IS NOT APPLICABLE IN T HE FACTS OF THE PRESENT CASE. 8. REGARDING THE 2 ND DISALLOWANCE OF RS.71 686/- WE FIND THAT PENALTY IN THIS REGARD WAS DELETED BY LD. CIT(A) ON THIS BA SIS THAT THIS DISALLOWANCE IS ON ESTIMATE BASIS AND THEREFORE P ENALTY IS NOT JUSTIFIED. IN THIS VIEW OF THE MATTER WE FEEL THAT ON THIS AS PECT ALSO NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT(A). 9. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. 10. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- SD./- (G.C. GUPTA) (A. K. GARODIA) VICE PRESIDENT ACCOUNTANT MEMBER SP I.T.A.NO. 2448 /AHD/2010 6 COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR AHMEDABAD BY ORDER 6. THE GUARD FILE AR ITAT AHMEDABAD 1. DATE OF DICTATION 15/12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16/12.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S.19/12 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 21/12 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.21/12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 21/12/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..