M/s. Vikas Construction, Matushree,, Indore v. The I.T.O., Indore

ITA 39/IND/2010 | 2006-2007
Pronouncement Date: 28-03-2011 | Result: Allowed

Appeal Details

RSA Number 3922714 RSA 2010
Bench Indore
Appeal Number ITA 39/IND/2010
Duration Of Justice 1 year(s) 2 month(s) 5 day(s)
Appellant M/s. Vikas Construction, Matushree,, Indore
Respondent The I.T.O., Indore
Appeal Type Income Tax Appeal
Pronouncement Date 28-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 28-03-2011
Date Of Final Hearing 01-03-2011
Next Hearing Date 01-03-2011
Assessment Year 2006-2007
Appeal Filed On 22-01-2010
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO.39/IND/2010 A.Y. 2006-07 M/S VIKAS CONSTRUCTION INDORE PAN AJLPJ-3049E APPELLANT VS INCOME TAX OFFICER 2(3) INDORE RESPONDENT APPELLANT BY : SHRI RAVI SARDA RESPONDENT BY : SHRI P.K. MITRA O R D E R PER R.C. SHARMA ACCOUNTANT MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 1.10.2009. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. THE MAIN GRIEVANCE OF THE ASSESSEE RELATES TO DISAL LOWANCE OFRS. 15.74 LACS PAID TO SUB-CONTRACTORS. FROM REC ORD WE FIND THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CON STRUCTION ACTIVITIES. DURING THE YEAR PAYMENT OF RS. 17 24 9 74/- WAS MADE TO SUB-CONTRACTORS. THE ASSESSING OFFICER FOU ND THAT IN 2 RESPECT OF PAYMENT OF RS.15 74 854/- THE ASSESSEE HAS NOT PAID TDS DURING THE YEAR UNDER CONSIDERATION. ACC ORDINGLY HE DISALLOWED PAYMENT UNDER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE DISALLOWANCE SO MADE WAS CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 3. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESS EE WAS THAT TDS WAS DEDUCTED ON THIS PAYMENT BEFORE CLOSE OF THE ACCOUNTING YEAR AND THE SAME WAS ALSO DEPOSITED IN GOVERNMENT TREASURY ON 31.10.2006 I.E. THE LAST DAT E OF FILING OF THE RETURN OF INCOME U/S 139 AND THEREFORE NO DIS ALLOWANCE SHOULD BE MADE DURING THE YEAR UNDER CONSIDERATION. ON THE OTHER HAND THE LEARNED DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND FIND FROM RECORD THAT THE ASSESSEE HAS DULY DEDUCTED TAX ON PAYMENT TO SUB-CO NTRACTORS ON 31 ST MARCH 2006 AND ALSO DEPOSITED THE SAME ALONG WITH INTEREST FOR DELAY IN DEPOSIT ON 31 ST OCTOBER 2006. ACCORDING TO SECTION 40(A)(IA) IF THE TAX IS DEDUCTIBLE UNDER CH APTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR AFTER DEDUCTI ON IT HAS NOT BEEN PAID THEN THE AMOUNT SO PAID CANNOT BE ALL OWED BUT IS REQUIRED TO BE DISALLOWED U/S 40(A)(IA) OF THE ACT. HOWEVER IF THE TAX IS DEDUCTED DURING THE LAST MONTH OF PREVIO US YEAR THEN 3 THE LIABILITY OF THE ASSESSEE IS TO PAY THE SAME FO R ALLOWABILITY OF THE SAID EXPENDITURE DURING THAT YEAR OR BEFORE THE DUE DATE SPECIFIED UNDER SUB-SECTION (1) OF SECTION 139 OF T HE ACT. SUB- SECTION (1) OF SECTION 139 REGULATES THE DUE DATE O F FILING THE RETURN OF INCOME IN NORMAL CASES. IF THE ASSESSEE HAS DEPOSITED THE TAX SO DEDUCTED BEFORE THE DATE SPECI FIED UNDER SECTION 139(1) APPLICABLE TO THE ASSESSEE CONCERN NO DISALLOWANCE CAN BE MADE BY INVOKING THE PROVISIONS OF SECTION 40(A)(II) OF THE ACT SINCE THERE IS NO DEFAULT ON T HE PART OF THE ASSESSEE OF NON-DEDUCTION OR NON-PAYMENT OF TDS. H OWEVER THE PROVISIONS OF SECTION 194C UNDER CHAPTER XVII-B ARE RELEVANT FOR THE PURPOSE OF ASCERTAINING THE DEDUCT IBILITY OF TAX ON PAYMENT. ONCE THE NATURE OF PAYMENT IS FALLING UNDER THE PROVISIONS OF CHAPTER XVII-B/XVIIB THEN THE DISALLO WANCE U/S 40(A)(1A) SHALL BE AS PER THE CONDITIONS AS PROVIDE D UNDER THIS SECTION ITSELF. THE PROVISO TO SECTION 40(A)(IA) O F THE ACT MAKES IT FURTHER CLEAR THAT EVEN IN THE CASE WHEN TAX IS DEDUCTIBLE AS PER THE PROVISIONS OF CHAPTER XVI BUT DEDUCTED IN T HE SUBSEQUENT YEAR OR DEDUCTED DURING THE LAST MONTH O F PREVIOUS EYAR BUT PAID AFTER DUE DATE U/S 139(1) THEN THE SAID SUM SHALL NOT BE ALLOWED AS DEDUCTION IN COMPUTING THE INCOME OF THE PREVIOUS YEAR BUT IS ALLOWABLE IN THE PREVIOUS YEAR IN WHICH THE SAID TAX HAS BEEN ACTUALLY PAID. 4 5. IN VIEW OF THE ABOVE DISCUSSION THERE IS NO MER IT IN THE ACTION OF THE ASSESSING OFFICER IN MAKING ANY DISAL LOWANCE OF EXPENDITURE SINCE THE TDS ON SUCH PAYMENT HAS BEEN DEDUCTED AND PAID BEFORE THE LAST DATE DUE FOR FILI NG THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR UNDER CO NSIDERATION AS MENTIONED U/S 139(1). IN THE INSTANT CASE BEFORE US THE ASSESSEE HAS DULY DEDUCTED TAX ON 31.3.2006 AND ALS O DEPOSITED TAX ON 31 ST OCTOBER 2006 SINCE THE ASSESSEES RETURN IS TAX AUDIT RETURN LAST DATE OF FILING WAS 31 ST OCTOBER 2006 THERE IS NO REASON TO DISALLOW THE PAYMENT SO MADE BY INVOKING SECTION 40(A)(IA) OF THE ACT. OUR VIEW IS ALSO SUPPORTED BY THE DECISION OF THE COORDINATE BENCH IN THE CASE S OF BAPUSAHEB NANASAHEB DHUMAL V. ACIT (2010) 132 TTJ 6 94 (MUM); H.S. MOHINDRA TRADERS V. ITO (2010) 132 TTJ 701 (DEL) AND KANUBHAI RAMJIBHAI V. ITO (2011) 135 TTJ 364 (A HD). 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES ON 28 M ARCH 2011. (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28 TH MARCH 2011 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR GU ARD FILE DN/- 5