M/S. JACK N JILL,DIMAPUR vs ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-DIMAPUR, DIMAPUR

Income Tax Appellate Tribunal, ‘E-COURT’ GAUHATI

Before: SHRI P.M. JAGTAP, V.P & SHRI S.S. GODARA, AM

For Appellant: Shri Sanjay Mody, CA

Hearing: 14/02/2020Pronounced: 28/02/2020

IN THE INCOME TAX APPELLATE TRIBUNAL ‘E-COURT’ GAUHATI BEFORE SHRI P.M. JAGTAP, V.P & SHRI S.S. GODARA, AM S. A. No.01/Gau/2020 (in ITA No.477/Gau/2019) & ITA No.477/Gau/2019 (Assessment Year: 2016-17) M/s Jack N Jill, Dimapur Vs. ACIT, Circle-Dimapur, Dimapur Solo Complex, Hazi Park Road, Hongkong Market, Dimapur, Nagaland, Pin-797112. �थायीलेखासं/.जीआइआरसं/.PAN/GIR No.: AALFJ0244L (Appellant) .. (Respondent) Appellant by : Shri Sanjay Mody, CA Respondent by : Shri Jayanta Mridha, JCIT, Sr. DR सुनवाई क� तार�ख /Date of Hearing : 14/02/2020 घोषणा क� तार�ख/Date of Pronouncement : 28/02/2020 आदेश / O R D E R Per Shri S.S. Godara: This assessee’s stay application S.A No.01/Gau/20 seeks to restrain the department from effecting outstanding demand of Rs.3,74,133/- out of the total sum of Rs.467379/- arising from both the learned lower authorities’ action disallowing/adding rent payment of Rs.11,46,312/- for non-deduction of TDS during the course of assessment framed on 26.11.2018 as affirmed in the lower appellate order under challenge.

2 S. A. No.01/Gau/2020 & ITA No.477/Gau/2019 M/s Jack N Jill, Dimapur

Heard both the parties. Case file perused. With both the parties’ consent, we proceed to decide the assessee’s main appeal ITA No.477/Gau/2019.

3 Coming to merits of the sole issue of correctness of section 40(a)(ia) disallowance of rent payment involving sum of Rs.11,46,312/-, we notice that this assessee-firm has made the impugned payment to three parties Sharaf Zaselatuo Solo, Smt. Linda Solo and Shri T.K. Angami. All of them enjoy section 10(26) exemption since belonging to the recognised Scheduled Tribes under the Constitution (Schedule Tribes) Order, 1950 and Constitution (Nagaland) Schedule Tribes Order, 1970 under Article 366 Clause 25 of the Constitution of India. That being the case, this tribunal’s coordinate bench in ITA No.53/Kol/2017 M/s Shillong Lajong vs. ACIT decided on 25.09.2019 holds that such payments made to exempt assessees under the Act do not invite the impugned disallowance in view of yet another decision reported as [2015] 156 ITD 276(Gau-Trib) Tamchikusuk vs. ACIT. We thus delete the impugned section 40(a)(ia) rent payment disallowance itself by adopting this precise reason alone. The assessee’s main appeal ITA No.477/Gau/2019 is accepted.

The assessee main appeal ITA No.477/Gau/2019 is allowed and its SA No.01/Gau/20 stands rendered infructuous.

Order Pronounced in the Open Court on 28/02/2020. Sd/- Sd/- (P. M. JAGTAP) (S. S. GODARA) VICE-PRESIDENT JUDICIAL MEMBER Dated: 28/02/2020 RS

3 S. A. No.01/Gau/2020 & ITA No.477/Gau/2019 M/s Jack N Jill, Dimapur

Copy of order forwarded to: 1. M/s Jack N Jill, Dimapur 2. ACIT, Circle-Dimapur, Dimapur 3. The CIT(A) 4. The CIT 5. DR 6. Guard file By Order

Senior Private Secretary, Head of Office/D.D.O, I.T.A.T, Gauhati Benches, Gauhati.

M/S. JACK N JILL,DIMAPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-DIMAPUR, DIMAPUR