M/s. Divya Developer, Ahmedabad v. The Income tax Officer,Ward-2,, Ahmedabad

ITA 3144/AHD/2009 | 2006-2007
Pronouncement Date: 11-11-2011 | Result: Allowed

Appeal Details

RSA Number 314420514 RSA 2009
Assessee PAN AAEFD3461E
Bench Ahmedabad
Appeal Number ITA 3144/AHD/2009
Duration Of Justice 1 year(s) 11 month(s) 16 day(s)
Appellant M/s. Divya Developer, Ahmedabad
Respondent The Income tax Officer,Ward-2,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 11-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 11-11-2011
Date Of Final Hearing 16-09-2011
Next Hearing Date 16-09-2011
Assessment Year 2006-2007
Appeal Filed On 25-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD .. !'# $ $ $ $ %% % & ' ( # BEFORE SHRI G.D.AGARWAL VICE-PRESIDENT (AZ) AND SHRI MUKUL KR.SHRAWAT JUDICIAL MEMBER $./ 1. I.T.A.NO.3144/AHD/2009 2. I.T.A.NO.3232/AHD/2009 ( * * * * / / / / ASSESSMENT YEAR : 2006-07) 1.M/S.DIVYA DEVELOPERS 12 VRAJ VIHAR SOCIETY OPP.CHIRAG DIAMAND L.B.S. ROAD BAPUNAGAR AHMEDABAD 2. ITO WARD-9(2) AHMEDABAD / VS. 1. THE ITO WARD-9(2) AHMEDABAD 2. M/S.DIVYA DEVELOPERS AHMEDABAD '+ ( $./- $./ PAN/GIR NO. : AAEFD 3461 E ( +. / // / APPELLANTS ) .. ( /0+. / RESPONDENTS ) ASSESSEE BY : SHRI S.N.DIVATIA A.R. REVENUE BY : SHRI R.K.VOHRA SR. D.R. % 1 2 & / / / / DATE OF HEARING : 16/09/2011 34* 2 & / DATE OF PRONOUNCEMENT : 11.11.11 (5 / O R D E R PER SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER : THESE CROSS APPEALS; ONE BY THE ASSESSEE AND THE OT HER BY THE REVENUE HAVE ARISEN FROM THE ORDER OF THE CIT(A)-XV AHMEDABAD DATED 07/10/2009 PASSED FOR A.Y. 2006-07. FIRST W E SHALL TAKE UP THE APPEAL OF THE ASSESSEE. ITA NO.3144/AHD/2009 (BY ASSESSEE) AND ITA NO.3232/AHD/2009 (BY REVENUE) M/S.DIVYA DEVELOPERS VS. ITO ASST.YEAR 2006-07 - 2 - 2. IN ASSESSEES APPEAL I.E. ITA NO.3144/AHD/200 9 THE FOLLOWING GROUNDS HAVE BEEN RAISED:- 1.1. THE ORDER PASSED U/S.250 OF THE ACT ON 7.10.20 09 FOR A.Y. 2006-07 BY CIT(A)-XV ABAD UPHOLDING THE DISALLOWANCE OF RS.11 13 963 MADE BY AO U/S.40(A)(IA) IS WHOLLY ILLEGAL UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUST ICE. 2.1. THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN UPHOLDING THE DISALLOWANCE OF RS.11 13 963 MADE U/S.40(A)(IA) BY AO. 3.1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD THE DISALLOWANCE OF RS.11 13 963 IN RESPECT OF THREE PARTIES VIZ. AJA BSINGH K.BODHAM (RS.305795) GURJAR CANDARSINH HARISINH (RS.6 97 880) AND GURJAR MUKESH DHARAMSINH (RS.1 10 288) IN VIEW OF THE CONSTRUCTION A/C. ACC EPTED BY THE DEPT. 2. 1. FACTS IN BRIEF AS EMERGED FROM THE CORRESPON DING ASSESSMENT ORDER PASSED U/S.143(3) OF THE INCOME TAX ACT DATED 11.1 2.2008 WERE THAT THE ASSESSEE-FIRM IS IN THE BUSINESS OF CIVIL CONSTRUCT ION. ON VERIFICATION OF DETAILS IT WAS NOTICED BY THE AO THAT CERTAIN PAYM ENTS HAVE BEEN MADE TOWARDS LABOUR CHARGES EITHER WITHOUT DEDUCTION OF TDS OR BELATED DEPOSIT OF TDS HENCE VIOLATED THE PROVISIONS OF SECTION 194C OF THE IT ACT AND CONSEQUENCE THEREUPON INVOKED THE PROVISION S OF SECTION 40(A)(IA). A TOTAL SUM OF RS.60 26 309/- WAS DISALL OWED. BEING AGGRIEVED THE MATTER WAS CARRIED BEFORE THE FIRST A PPELLATE AUTHORITY. ITA NO.3144/AHD/2009 (BY ASSESSEE) AND ITA NO.3232/AHD/2009 (BY REVENUE) M/S.DIVYA DEVELOPERS VS. ITO ASST.YEAR 2006-07 - 3 - 2.2 LD.CIT(A) HAS BIFURCATED THE IMPUGNED ADD ITION UNDER TWO CATEGORIES. UNDER ONE CATEGORY IT WAS HELD THAT THE PAYMENTS WERE TOWARDS PURCHASE OF MATERIAL HENCE THERE WAS NO R EQUIREMENT OF DEDUCTION OF TAX AT SOURCE. THE DETAILS OF THE D ELETION IN RESPECT OF THE FOLLOWING PARTIES ARE AS UNDER:- NAME OF PARTY AMOUNT ELISH CONSTRUCTION 34 18 128 JHAVARLAL S.PRAJAPATI 5 13 390 MUKESH H.SORATHIA 75 638 PRAJAPATI BAPURAM G 4 57 060 SHAMBHU S.CHUNARA 4 48 130 TOTAL 45 12 343 2.2 IN RESPECT OF THE SECOND CATEGORY LD. CIT(A) HAS NOTICED THAT THE ASSESSEE HAS DEDUCTED THE TAX OF THE YEAR IN THE MONTH OF MARCH 2006 BUT IT WAS DEPOSITED AFTER 31/03/2006. LD.CIT(A) H AS HELD THAT THOUGH THE TDS WAS DEDUCTED BUT DEPOSITED BELATEDLY THEREF ORE THE ACTION OF THE AO WAS AFFIRMED. THE ADDITION WAS CONFIRMED IN RES PECT OF THE FOLLOWING THREE PARTIES:- NAME OF PARTY AMOUNT AJABSINGH K. BODHAM 3 05 795 GURJAR CHANDARSINH HARISINH 6 97 880 GURJAR MUKESH DHARAMSINH 1 10 288 TOTAL 11 13 963 AGAINST THE SAID PART RELIEF NOW BOTH THE PARTIES ARE BEFORE US. 3. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES A S FAR AS THE ISSUE OF BELATED DEPOSIT OF TDS THE HONBLE JURISDICTIONAL HIGH COURT IN A ITA NO.3144/AHD/2009 (BY ASSESSEE) AND ITA NO.3232/AHD/2009 (BY REVENUE) M/S.DIVYA DEVELOPERS VS. ITO ASST.YEAR 2006-07 - 4 - LATEST DECISION DATED 18/07/2011 IN TAX APPEAL NO.7 06 OF 2010 IN THE CASE OF CIT VS. J.K. CONSTRUCTION CO. HAS HELD AS UNDER:- FROM THE RECORD IT EMERGES THAT FOR PAYMENT TO CO NTRACTOR THE ASSESSEE HAD MADE DEDUCTION AS REQUIRED UNDER LAW F ROM TIME TO TIME AND IN PARTICULAR LATEST BY 31.3.2005. THIS I S CLEAR FROM CHART SUPPLIED BY THE ASSESSEE BEFORE CIT (APPEALS) WHICH WOULD ESTABLISH THAT DEDUCTION IN CASE SEVERAL CONTRACTOR S WERE MADE ON 31.3.2005. ALL SUCH AMOUNTS WERE DEPOSITED WITH TH E GOVERNMENT ON OR AROUND 28.5.2005. IN BACKGROUND OF ABOVE U NDISPUTED FACTS TRIBUNAL WAS OF THE OPINION THAT BY VIRTUE O F AMENDED PROVISIONS OF SECTION 40 (A)(IA) OF THE INCOME TAX ACT 1961 ASSESSEE HAS NOT BREACHED THE REQUIREMENT OF DEDUCT ION AND DEPOSITING OF TDS. SECTION 40(A)(IA) OF THE ACT AS AMENDED WITH EFFECT FROM 1.4.2005 READ AS UNDER: (IA) ANY INTEREST COMMISSION OR BROKERAGE (RENT ROYALTY) FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICA L SERVICES PAYABLE TO A RESIDENT OR AMOUNTS PAYABLE TO A CONT RACTOR OR SUB-CONTRACTOR BEING RESIDENT FOR CARRYING OUT AN Y WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WO RK) ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVI I-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR AFTER DEDUCTION HAS NOT BEEN PAID ON OR BEFORE THE DUE DATE SPECIFIED IN SU B-SECTION (1) OF SECTION 139. PLAINLY SPEAKING ASSESSEE HAD TO MAKE DEDUCTION BE FORE 31 ST MARCH OF THE YEAR IN QUESTION AND AS LONG AS SUCH AMOUNTS WERE DEPOSITED BEFORE LAST DATE OF FILING OF THE RETURN REQUIREMENTS OF LAW WOULD BE FULFILLED. IT WAS ON THIS BASIS THAT TRIBUNAL WAS OF THE OPINION THAT THE ASSESSEE COMMITTED NO WRONG AND WA S THEREFORE ENTITLED TO SEEK DEDUCTION OF RS.32 94 149/- FROM T HE INCOME WHICH AMOUNT THE ASSESSEE HAD DEDUCTED FROM PAYMENTS OF C ONTRACTORS AND HAD ALSO DEPOSITED WITH REVENUE BEFORE THE LAST DATE OF FILING ITA NO.3144/AHD/2009 (BY ASSESSEE) AND ITA NO.3232/AHD/2009 (BY REVENUE) M/S.DIVYA DEVELOPERS VS. ITO ASST.YEAR 2006-07 - 5 - OF THE RETURN. WE DO NOT FIND ANY ILLEGALITY IN OR DER OF TRIBUNAL. TAX APPEAL IS THEREFORE DISMISSED. 3.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS TH E AO DID NOT HAVE THE BENEFIT THIS JUDGEMENT OF THE JURISDICTIONAL HI GH COURT THROUGH WHICH THE PROVISIONS OF SECTION 40(A)(IA) HAVE NOW BEEN S TREAMLINED. AS FAR AS THE DECISION OF THE RESPECTED SPECIAL BENCH MUMBAI IN THE CASE OF M/S BHARATI SHIPYARD LTD. ( ITA NO. 2404/MUM./2009 A.Y. 2005-06 DT.9.9.2011) IS CONCERNED THE SAME IS IN RESPECT OF THE AMENDME NT BROUGHT BY FINANCE ACT 2010 TO SEC. 40(A)(IA) THROU GH WHICH THE T.D.S. IS REQUIRED TO BE DEPOSITED BY THE DATE PRESCRIBED U/S 139 OF THE ACT IN SUCH CASE WHERE THE TDS IS DEDUCTED IN THE MONTH OF MARCH OF THE FINANCIAL YEAR. BUT IN RESPECT OF TDS IN ANY OTHER CASE ON OR BEFORE THE LAST DAY OF THE PREVIOUS YEAR REQUIRED TO BE DEPOSITED. AFTER CAREFUL READING OF BOTH THE JUDGMENTS THE A.O. IS NOW REQU IRED TO FIRST EXAMINE THE DATES OF DEDUCTION AND THEN THE DATE OF DEPOSI T IN THE GOVT. THE OLD PROVISION SHALL APPLY BECAUSE THE SPECIAL BENCH HAS HELD THAT THE AMENDMENT IS NOT RETROSPECTIVE. NONETHELESS THE HO NBLE H.C.( SUPRA ) HAS GIVEN A VERDICT ON THE ADMITTED FACT THAT THE T DS WAS DEDUCTED IN THE MONTH OF MARCH AND DEPOSITED IN THE MONTH OF MAY . DUE TO THIS REASON WE HEREBY RESTORE THIS PART OF THE GROUND BACK TO T HE STAGE OF THE ASSESSMENT SO THAT AFTER VERIFYING THE PRESCRIBED D UE DATES OF DEPOSIT AND THE DATES ON WHICH THE TDS HAD ACTUALLY BEEN DEPOSI TED IN THE GOVERNMENT ACCOUNT BY THE ASSESSEE THE AO SHALL GR ANT THE RELIEF AS PER LAW. ASSESSEES GROUNDS ARE THEREFORE ALLOWED BUT FOR STATISTICAL PURPOSES. ITA NO.3144/AHD/2009 (BY ASSESSEE) AND ITA NO.3232/AHD/2009 (BY REVENUE) M/S.DIVYA DEVELOPERS VS. ITO ASST.YEAR 2006-07 - 6 - 4. IN REVENUES APPEAL I.E. ITA NO.3232/AHD/2009 THE FOLLOWING SUBSTANTIVE GROUND HAS BEEN RAISED:- 1) THE LD. COMMISSIONER OF INCOME-TAX (A)-XV AHM EDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISAL LOWANCE OF RS.45 12 343/- OUT OF TOTAL DISALLOWANCE OF RS.60 26 309/- MADE BY THE ASSESSING OFFICER U/S.40(A)(IA). 4.1. FACTS IN RESPECT OF REVENUES GROUND HAVE ALRE ADY BEEN DISCUSSED SUPRA. THE ASSESSEE HAS FURNISHED THE DETAILS OF THE BUILDING MATERIAL PURCHASED. THE ASSESSEE HAS ALSO FURNISHED THE CO NSTRUCTION ACCOUNT AND THE MATERIAL SUPPLIED BY THOSE PARTIES. THE BILLS ISSUED ON DIFFERENT DATES BY THE SAID PARTIES AS PRODUCED BEFORE THE LOWER A UTHORITIES HAVE BEEN PLACED BEFORE US IN THE COMPILATION. IT IS EVIDENT THAT LD.CIT(A) HAS GIVEN A FACTUAL FINDING ABOUT THE PURCHASE OF BUILD ING MATERIAL ETC. FROM THOSE PARTIES AND THE REVENUE HAS NOT CONTRADICTED THOSE FINDING BY PLACING ANY COGENT EVIDENCE HENCE WE FIND NO FORCE IN THIS GROUND OF REVENUE THEREFORE IN THE RESULT DISMISSED. 5. IN THE RESULT ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES WHEREAS THE REVENUES APPEAL IS DISMISSED . SD/- SD/- ( G.D. AGARWAL ) ( MUKUL KR. SHRAWAT ) VICE PRESIDENT (AZ) JUDICIAL ME MBER AHMEDABAD; DATED 11/ 11 /2011 ORDER PRONOUNCED IN THE OPEN COURT SD/- SD/- AKG MKS (AM) (JM) 11.11.11 ITA NO.3144/AHD/2009 (BY ASSESSEE) AND ITA NO.3232/AHD/2009 (BY REVENUE) M/S.DIVYA DEVELOPERS VS. ITO ASST.YEAR 2006-07 - 7 - 6.. . ../ T.C. NAIR SR. PS (5 2 /&7 (7*& (5 2 /&7 (7*& (5 2 /&7 (7*& (5 2 /&7 (7*&/ COPY OF THE ORDER FORWARDED TO : 1. +. / THE APPELLANT 2. /0+. / THE RESPONDENT. 3. $$ & %8 / CONCERNED CIT 4. %8() / THE CIT(A)-XV AHMEDABAD 5. 7;< /& / LEARNED DEPARTMENTAL REPRESENTATIVE ITAT AHMEDABAD 6. < =1 / GUARD FILE. (5 % (5 % (5 % (5 % / BY ORDER 07& /& //TRUE COPY// ! !! !/ // / $ $ $ $ ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD 1. DATE OF DICTATION.. 20.10.2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 20.10.2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 11.11.11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 11.11.11 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