M/s. Megawin Switchgear Pvt. Ltd., Salem v. ACIT, Salem

MA 199/CHNY/2016 | 2011-2012
Pronouncement Date: 26-10-2016

Appeal Details

RSA Number 19921724 RSA 2016
Assessee PAN AAECM4516E
Bench Chennai
Appeal Number MA 199/CHNY/2016
Duration Of Justice 3 month(s) 13 day(s)
Appellant M/s. Megawin Switchgear Pvt. Ltd., Salem
Respondent ACIT, Salem
Appeal Type Miscellaneous Application
Pronouncement Date 26-10-2016
Appeal Filed By Assessee
Bench Allotted A
Date Of Final Hearing 30-09-2016
Next Hearing Date 30-09-2016
Assessment Year 2011-2012
Appeal Filed On 13-07-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI ! ' . #$ % &' BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY JUDICIAL MEMBER M.P. NO.199/MDS./2016 ./ I.T.A.NO.412/MDS./2015 / ASSESSMENT YEAR : 2011-12 ) M/S.MEGAWIN SWITCHGEAR PVT. LTD. 35/1 & 35/2 PERUMALMALAI ADIVARAM NARASOTHIPATTY SALEM 636 004. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-I 3 GANDHI ROAD SALEM 636 007. [PAN AAECM 4516 E ] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : MR.G.BASKAR ADVOCATE /RESPONDENT BY : MR.SUPRIYAO PAL JCIT D.R / DATE OF HEARING : 3 0 - 09 - 201 6 !' / DATE OF PRONOUNCEMENT : 26 - 10 - 2016 / O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER THIS MISCELLANEOUS PETITION IS FILED BY THE ASSE SSEE PRAYING FOR RECTIFICATION OF THE ORDER OF THE TRIBU NAL IN ITA NO.412/MDS./2015 DATED 06.05.2016 FOR THE ASSESSMEN T YEAR 2011-12. MP NO.199/MDS./2016 :- 2 -: 2. THE LD.A.R SUBMITTED THAT THE TRIBUNAL IN ITS O RDER DATED 24.03.2016 HAS NOT ADJUDICATED GROUND NO.2(IV) THAT TAXABLE PORTION ALONE TO BE DISALLOWED AS DIRECTED BY BOARDS INSTR UCTION NO.2/2014 DATED 26.02.2014 IN F.NO.500/33/2013-FTD-I WHEREIN CLEARLY STATED THAT WHAT COULD BE DISALLOWED U/S.40(A)(IA) IS ONLY THE TAXABLE PORTION OF INCOME OF THE PAYEE AND NOT THE ENTIRE PAYMENT. FURTHER HE SUBMITTED THAT THE TRIBUNAL HAS NOT ADJUDICATED GRO UND NO.4 REGARDING THE DISALLOWANCE OF PAYMENT OF RS.4 68 50 0/- MADE TO ELECTRICAL RESEARCH AND DEVELOPMENT ASSOCIATION. THEREFORE LD.A.R PRAYED THAT THE TRIBUNAL MAY BE PLEASED TO RECALL T HE ORDER DATED 06.05.2016 IN ITA NO.412/MDS./2015 IN SO FAR AS GRO UND NOS.2(IV) AND GROUND NO.4 OF APPEAL ARE CONCERNED AND THE ISSUE A S TO THE IMPACT OF DTAA WITH KOREA DATED 26.09.1986. 3. ON THE OTHER HAND LD.D.R RELIED ON THE ORDER OF THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE TRIBUNAL ADJUDICATED THE CASE OF DISALL OWANCE U/S.40(A)(I) OF THE ACT IS WITH REGARD TO PAYMENT TO M/S.KOREA E LECTRO TECHNOLOGY RESEARCH INSTITUTE (KERI) AND OBSERVED THAT THE ISS UE WAS COVERED BY THE JUDGEMENT OF DELHI HIGH COURT IN THE CASE OF M/ S.HAVELLS (INDIA) LTD. REPORTED IN 352 ITR 376(DEL.). FURTHER THE C IT(A) CONFIRMED THE DISALLOWANCE ON THE BASIS OF THE SAME JUDGEMENT AS SUCH IT WAS MP NO.199/MDS./2016 :- 3 -: OBSERVED BY THE TRIBUNAL THAT THERE WAS NO INFIRMIT Y IN THE ORDER OF THE LD.CIT(A) ON THIS ISSUE AND CONFIRMED THE ORDER OF THE LD.CIT(A). 4.1 NOW THE CONTENTION OF THE LD.A.R IS THAT THE TRIBUNAL HAS NOT CONSIDERED THE VARIOUS GROUNDS RAISED BY THE ASSESS EE IN ITS APPEAL. IN OUR OPINION THE TRIBUNAL HAS CONSIDERED THE ENT IRE FACTS AND CIRCUMSTANCES OF THE CASE AND SPECIFICALLY RECORDED THE ARGUMENTS IN PARA-5 OF ITS ORDER. NOW LD.A.R WANTED TO RE-ARGUE THE CASE AND REVIEW THE ORDER OF THE TRIBUNAL FOR WHICH THE TRIB UNAL HAS NO POWER U/S.254 OF THE ACT. THE ORDER OF THE TRIBUNAL TO B E READ IT IN WHOLE NOT BY WORD BY WORD OR SENTENCE BY SENTENCE AS HELD BY SUPREME COURT IN THE CASE OF CIT CALCUTTA VS. KARAM CHAN D THAPAR AND BROS. P. LTD. REPORTED IN [1989] 176 ITR 535 (SC). BEING SO WE ARE OF THE OPINION THAT THE TRIBUNAL AFTER CONSIDERING THE ENTIRE ARGUMENT OF THE ASSESSEE GIVEN FINDINGS ON THIS ISSUE AND THERE IS NO INTERFERENCE CALLED FOR AT THIS STAGE. THE ARGUMENT OF THE ASSES SEE IS REJECTED. 5. THE NEXT ARGUMENT OF ASSESSEE IS THAT THE TRIB UNAL HAS NOT ADJUDICATED GROUND NO.4 REGARDING THE DISALLOWANCE OF PAYMENT OF RS.4 68 500/- MADE TO M/S.ELECTRICAL RESEARCH AND DEVELOPMENT ASSOCIATION. FURTHER HE PLEADED THAT THE TRIBUNAL MAY BE PLEASED TO RECALL THE ORDER DATED 06.05.2016 IN ITA NO.412/MDS ./2015 IN SO FAR AS MP NO.199/MDS./2016 :- 4 -: GROUND NO.4 OF APPEAL IS CONCERNED AND THE ISSUE AS TO THE IMPACT OF DTAA WITH KOREA DATED 26.09.1986. 5.1 ON THE OTHER HAND LD.D.R SUBMITTED THAT THERE IS NO MISTAKE APPARENT FROM THE ORDER OF TRIBUNAL ON THIS ISSUE. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE TRIBUNAL ENTIRELY CONSIDERED THE ISSUE REGARDING THE APPLICABILITY OF SEC.40(A)(I) OF THE ACT AND GIVEN A FINDING THAT THE ISSUE IS COVERED BY THE JUDGEMENT OF DELHI HIGH COU RT IN THE CASE OF M/S.HAVELLS (INIDA) LTD.(SUPRA). NOW THE LD.A.R S UBMITTED THAT THE APPLICABILITY OF SEC.40(A)(I) ON PAYMENT OF ` 4 68 500/- MADE TO M/S.ELECTRICAL RESEARCH AND DEVELOPMENT ASSOCIATIO N WAS NOT ADJUDICATED BY THE TRIBUNAL. IN OUR OPINION THIS I SSUE WAS ADJUDICATED BY THE CIT(A) IN PARA 4.2 AS FOLLOWS:- 4.2. GROUND NO.2.2 2.3. 2.5 AND 2.6 PERTAIN TO ADDITION OF CERTAIN AMOUNT FOR NON-DEDUCTION OF TAX U/S.40(A)(I A) OF THE INCOME TAX ACT. THEY ARE I) PAYMENT OF RS.37 62 762 /- PAID TO CENTRAL POWER RESEARCH INSTITUTE AND II) PAYMENT OF RS.4 68 500/- TO M/S.ELECTRICAL RESEARCH AND DEVELO PMENT ASSOCIATION ---- 4.2.3 IN VIEW OF THE ABOVE DISCUSSIONS THE APPEL LANTS CONTENTION IS NOT ACCEPTABLE AND THE AOS ACTION IS CONFIRMED. IT MAY ALSO BE MENTIONED THAT THE APPELLANTS CLAIM THAT THE MP NO.199/MDS./2016 :- 5 -: PAYEE IS A CENTRAL GOVERNMENT ORGANIZATION AND TAX NEED NOT BE DEDUCTED IS ALSO NOT ACCEPTABLE AS THERE IS NO EXC EPTION FOR SUCH PAYMENTS. LD.CIT(A) HAS GIVEN A FINDING THAT THIS ISSUE WAS C OVERED AGAINST THE ASSESSEE BY FOLLOWING THE ORDER OF CALCUTTA HIGH C OURT IN THE CASE OF CIT VS. CRESCENT EXPORT SYNDICATE AND THE ORDER OF GUJARAT HIGH COURT DATED 09.05.2013 IN THE CASE OF CIT VS. SIKANDARKHA N N.TUNVAR. FURTHER THE TRIBUNAL PLACED RELIANCE ON THE ORDER OF SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS V. ACIT REP ORTED IN [2012]16 ITR (TRIB.) 1 (VISAKHAPATNAM)[SB] AND REMITTED THE ISSUE BACK TO THE FILE OF AO TO CONSIDER THE SAME IN THE LIGHT OF THE ABOVE ORDER OF THE TRIBUNAL. 6.1 NOW THE CONTENTION OF LD.A.R IS THAT THE PAYM ENT TO M/S.ELECTRICAL RESEARCH AND DEVELOPMENT ASSOCIATION IS NOT CONSI DERED BY THE TRIBUNAL. IN OUR OPINION WHAT IS SAID WITH REFEREN CE TO PAYMENT TO M/S.CENTRAL POWER RESEARCH INSTITUTE IS ALSO APPLIC ABLE TO THE PAYMENT TO M/S.ELECTRICAL RESEARCH AND DEVELOPMENT ASSOCI ATION. ACCORDINGLY THE AO HAS TO CONSIDER THE SAME AND DECIDE THIS ISS UE AFRESH. 7. IN THE RESULT MISCELLANEOUS PETITION FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH OCTOBER 2016 AT CHENNAI. SD/- SD/- # $ . % &' ( ( DUVVURU RL REDDY )) % / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER )* / CHENNAI + / DATED: 26 TH OCTOBER 2016 K S SUNDARAM - ./0/ / COPY TO: 1 . / APPELLANT 4. 1 / CIT 2. / RESPONDENT 5. /23 4 / DR 3. 1( / CIT(A) 6. 3'5 / GF