M/s. Rishil Developers, Ahmedabad v. The Income tax Officer,Ward-9(1),, Ahmedabad

ITA 2668/AHD/2010 | 2007-2008
Pronouncement Date: 18-10-2013 | Result: Partly Allowed

Appeal Details

RSA Number 266820514 RSA 2010
Assessee PAN AAGFR4265C
Bench Ahmedabad
Appeal Number ITA 2668/AHD/2010
Duration Of Justice 3 year(s) 1 month(s) 5 day(s)
Appellant M/s. Rishil Developers, Ahmedabad
Respondent The Income tax Officer,Ward-9(1),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 18-10-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 18-10-2013
Date Of Final Hearing 07-10-2013
Next Hearing Date 07-10-2013
Assessment Year 2007-2008
Appeal Filed On 13-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER AND SHRI N.S. SAINI ACCOUNTANT MEMBER ITA NO.2668/AHD/2010 A.Y. 2007-08 M/S. RISHIL DEVELOPERS B/501 SATYAMEV COMPLEX OPP: NEW HIGH COURT S.G. HIGHWAY AHMEDABAD. PAN: AAGFR 4265C VS THE INCOME TAX OFFICER WARD-6(2) AHMEDABAD. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI J.P. JHANGID SR.D.R. ASSESSEE(S) BY : SHRI S.N. DIVETIA / DATE OF HEARING : 07/10/2013 / DATE OF PRONOUNCEMENT: 18/10/2013 / O R D E R PER SHRI N.S. SAINI ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LEARNED CIT(A)-XV AHMEDABAD DATED 7 TH JULY 2010. 2. THE SOLE GROUND OF APPEAL TAKEN BY THE ASSESSEE IN THIS APPEAL IS THAT THE LEARNED CIT(A) HAS ERRED IN NOT CONSIDERIN G THE ARGUMENTS OF THE APPELLANT AND DISALLOWED RS.47 27 913/- U/S. 40(A)( IA) OF INCOME TAX ACT. ITA NO.2668/AHD/2010 M/S. RISHIL DEVELOPERS VS. ITO AHMEDABAD. FOR A.Y. 2007-08 - 2 - 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MADE PAYMENT OR CREDITED AMOUNTS TO VARIOUS SUB-CONTRACT ORS AND DEDUCTED THE TDS BUT HAS NOT DEPOSITED THE SAME TO THE CREDIT OF THE CENTRAL GOVERNMENT ACCOUNT WITHIN THE PRESCRIBED TIME. MORE OVER IN SOME CASES TAX WAS NOT DEDUCTED AT SOURCE AT THE TIME OF PAYMENT OR CREDIT TO THE ACCOUNTS OF SOME OF THE CONTRACTORS. THE ASSESS ING OFFICER NOTED THAT THE ASSESSEE FAILED TO DEPOSIT THE TDS AMOUNT TO TH E ACCOUNT OF THE CENTRAL GOVERNMENT WITHIN TIME IN THE FOLLOWING CAS ES: SR. NO. NAME OF THE PARTY AMOUNT RS. 1. ADORATION BUILDERS 7 33 853/- 2. JAYANTIBHAI K. TANK 19 95 000/- 3. MAHANT FURNITURE 1 00 544/- 4. RAMESHBHAI CHHAGANBHAI GADIA 3 80 000/- 5. RAMLAL D. PATEL 1 23 805/- 6. SHARADBHAI MITHABHAI PATEL 2 73 000/- 7. SURESHBHAI SHARMA 5 05 239/- TOTAL 41 11 441/- 3.1 HE FURTHER OBSERVED THAT IN THE FOLLOWING CASES TDS WAS NOT DEDUCTED AT THE TIME OF CREDIT OR PAYMENT TO THE AC COUNT OF THE FOLLOWING PARTIES. SR. NO. NAME OF PARTY AMOUNT 1. HUSHANBHAI JAHIRBHAI RS.2 97 799/- 2. LAXMANBHAI S. PATEL RS.1 75 000/- 3. SHRI GAYATRI HALISHA GROUP RS.70 913/- ITA NO.2668/AHD/2010 M/S. RISHIL DEVELOPERS VS. ITO AHMEDABAD. FOR A.Y. 2007-08 - 3 - MAJUR & KAMDAR 4. CHHAGAN VASHRAMBHAI RS.72 760/- TOTAL RS.6 16 472/- 3.3 THEREFORE THE ASSESSSING OFFICER HAS DISALLOWED TH E EXPENDITURE OF RS. 47 27 913/- BY INVOKING THE PROVISIONS OF SE CTION 40A(IA) OF THE IT ACT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 4. ON APPEAL THE LEARNED CIT(A) HAS CONFIRMED THE O RDER OF THE ASSESSING OFFICER DISALLOWING THE EXPENDITURE U/S. 40(A)(IA) OF THE ACT ON THE GROUND THAT THE TDS SHOULD HAVE BEEN DELETED AND DEPOSITED IN THE GOVERNMENT ACCOUNT BY 31.03.2007 BUT IT HAS NOT BEE N DONE SO AND IN ALL CASES TDS HAVE BEEN DEPOSITED IN THE GOVERNMENT ACC OUNT ON 23.05.2007. AS REGARDS THE OTHER FOUR PERSONS TO WH OM THE PAYMENTS WERE MADE WITHOUT DEDUCTING TDS THE LEARNED CIT(A) CONFIRMED THE ADDITION ON THE GROUND THAT NO TDS WAS DEDUCTED AND THEREFORE THE ADDITION MADE BY THE AO WAS JUSTIFIED BY INVOKING T HE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 5. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT TH E HONBLE DELHI HIGH COURT IN THE CASE OF CIT V/S. RAJINDER KUMAR (2013) 90 DTR (DEL) 297 HAS HELD THAT EXPRESSION SAID DUE DATE OCCURRING IN CLAUSE (A) OF PROVISO TO S. 40(A)(IA) REFERES TO THE DUE D ATE OF FILING OF RETURN UNDER SECTION 139(1) AND NOT THE DATE ON WHICH THE TDS SHOULD HAVE BEEN PAID ASSESSEE HAVING DEDUCTED TDS IN MARCH 2 007 AND PAID THE SAME IN APRIL 2007 I.E. BEFORE THE DATE ON WHICH RETURN U/S. 139(1) WAS TO BE FILED SECTION 40(A)(IA) COULD NOT BE INVOKED TO DISALLOW THE ITA NO.2668/AHD/2010 M/S. RISHIL DEVELOPERS VS. ITO AHMEDABAD. FOR A.Y. 2007-08 - 4 - PAYMENTS IN THE RELEVANT YEAR. HE FURTHER SUBMITTED THAT THE LEARNED CIT(A) AFTER EXAMINING THE EVIDENCES IN PAGE 8 OF T HE ORDER HAS HELD THAT IN ALL CASES TDS HAVE BEEN DEPOSITED IN THE GOVERNM ENT ACCOUNT ON 23.05.2007. HE THEREFORE SUBMITTED THAT AS THE TD S WAS DEPOSITED BY THE ASSESSEE TO THE CREDIT OF THE GOVERNMENT ACCOUN T BEFORE THE DUE DATE OF FILING OF RETURN ON INCOME U/S. 139(1) OF THE AC T IN THE CASE OF ASSESSEE NO DISALLOWANCE WAS WARRANTED U/S. 40(A)(IA) OF THE ACT. IN RESPECT OF THE DISALLOWANCE OF RS.6 16 442/- THE LEARNED AR HAS N OT POINTED OUT ANY ERROR IN THE ORDERS OF THE LOWER AUTHORITIES. 6. ON THE OTHER HAND LEARNED DR FULLY JUSTIFIED TH E ORDERS OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS ON RECORDS. A SUM O F RS.41 11 441/- WAS DISALLOWED U/S.40(A)(IA) OF THE IT ACT BY THE AO IN THE INSTANT CASE WHICH WAS CONFIRMED BY THE LEARNED CIT(A). THE ABOVE AMOU NT IS COMPRISED OF TWO ELEMENTS. FIRSTLY RS.41 00 441/- IN RESPECT OF WHICH A TDS OF RS.1 70 203/- WAS DEDUCTED BY THE ASSESSEE AND THE SAID TDS WAS PAID TO THE CREDIT OF THE CENTRAL GOVERNMENT ON 23.05.2007. SECONDLY AMOUNT OF RS.6 16 472/- WAS DISALLOWED ON THE GROUND THAT NO TDS WAS DEDUCTED IN RESPECT OF THE SAME. IN RESPECT OF THE FIRST AMO UNT OF RS.41 11 441 WE FIND THAT LAW WAS AMENDED BY THE FINANCE ACT 2010 SO AS TO PROVIDE THAT DEDUCTION SHALL BE ALLOWED IN RESPECT OF AN EXPENDI TURE IF THE CORRESPONDING TDS AMOUNT IS PAID TO THE CREDIT OF T HE CENTRAL GOVERNMENT ON OR BEFORE THE DUE DATE SPECIFIED IN S ECTION 139(1) OF THE ACT. THE HONBLE CALCUTTA HIGH COURT VIDE ITS DECIS ION DATED 23.11.2011 IN THE CASE OF CIT V/S. VIRGIN CREATIONS ITA NO.30 2 OF 2011 HAS HELD ITA NO.2668/AHD/2010 M/S. RISHIL DEVELOPERS VS. ITO AHMEDABAD. FOR A.Y. 2007-08 - 5 - THAT THE ABOVE AMENDMENT IN SECTION 40(A)(IA) IS HA VING RETROSPECTIVE EFFECT. THE ABOVE DECISION WAS ALSO FOLLOWED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V/S. RAJINDER KUMAR ORDER DATED 1.7.2013 IN ITA NO.65 OF 2013. IN THE INSTANT CASE IT IS NOT I N DISPUTE THAT THE CORRESPONDING TDS AMOUNT WAS PAID TO THE CENTRAL GO VERNMENT BEFORE THE DUE DATE SPECIFIED IN SECTION 139(1) OF THE ACT . THEREFORE FOLLOWING THE ABOVE DECISIONS OF THE HONBLE CALCUTTA HIGH CO URT AND DELHI HIGH COURT WE HOLD THAT THE DISALLOWANCE U/S.40A(IA) OF THE ABOVE AMOUNT OF RS.41 11 441/- IS NOT WARRANTED. CONSEQUENTLY DISA LLOWANCE OF RS.41 11 441/- IS HEREBY DELETED. IN RESPECT OF THE DISALLOWANCE OF RS.6 16 472/- ON WHICH NO TAX WAS DEDUCTED BY THE A SSESSEE LEARNED AR COULD NOT POINT OUT ANY ERROR IN THE ORDERS OF THE LOWER AUTHORITIES. THEREFORE THIS PART OF THE GROUND OF APPEAL IS DIS MISSED. THUS THE GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY THE 18 TH OCTOBER 2013 AT AHMEDABAD. SD/- SD/- (MUKUL KR. SHRAWAT) ( N.S. SAINI) JUDICIAL MEMBER ACCOUN TANT MEMBER AHMEDABAD; DATED 18/10/2013 PRABHAT KR. KESARWANI SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III AHMEDABAD ITA NO.2668/AHD/2010 M/S. RISHIL DEVELOPERS VS. ITO AHMEDABAD. FOR A.Y. 2007-08 - 6 - 5. / DR ITAT AHMEDABAD 6. / GUARD FILE. / BY ORDER / ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD