SMT. RITU SINGH,BHOPAL vs. DEPUTY COMMISSIONER OF INCOME TAX 5 (1), BHOPAL

Appellant by Shri Hitesh Chimnani, A.R. Respondent by Shri Puneet Kumar, Sr. D.R. Date of Hearing: 11.12.2019 Date of Pronouncement: 26.12.2019 आदेश / O R D E R PER KUL BHARAT, J.M: This appeal by the assessee is against order of the CIT(A)-2, Indore dated 28.11.2017 pertaining to the assessment year 2013-14. The assessee has raised following grounds of appeal:

1. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the disallowance made u/s 40(a)(ia) amounting [ ] [Smt. Ritu Singh, Bhopal] to Rs.10,12,921/- on account of non-deduction of TDS, without properly appreciating the facts of the case and submissions made before him.

2. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in maintaining the adhoc disallowances made by the Ld. A.O. amounting to Rs.1,27,905/- (out of Rs.2,25,811/-) without properly appreciating the facts of the case and submissions made before him.

s at the time of hearing.

2. The facts giving rise to the present appeal are that the assessee filed her return of income on 1.10.2013 declaring total income of Rs.12,17,810/-. Thereafter, the case was selected through CASS for detailed scrutiny. Accordingly, the A.O. issued a notice u/s 143(2) of the Income Tax Act, 1961 (hereinafter called as ‘the Act’). A notice u/s 142(1) of the Act was issued on 6.7.2015. The A.O. proceeded to make assessment, thereby he disallowed the claim of commission of Rs.10,12,921/- and made addition of Rs.21,66,518/- on account of non-deduction of tax.

Further, the A.O. made addition of Rs.14,957/- in respect of undisclosed amount of TDS. Further, the A.O. made a lumpsum addition of Rs.2,25,811/- in respect of adhoc

[ ] [Smt. Ritu Singh, Bhopal] disallowances related to conveyance, printing, stationery and office expenses. Aggrieved against this, the assessee preferred an appeal before Ld. CIT(A), who after considering the submissions, partly allowed the appeal, thereby the Ld. CIT(A) confirmed the addition of Rs.10,12,921/- for non- deduction of tax at source and sustained disallowance of Rs.1,28,905/- out of total disallowance made on account of adhoc disallowances of expenses related to commission, conveyance, office expenditure, repair & maintenance, etc.

Now the assessee is in further appeal before this Tribunal.

3. Ground No.1 is against addition of Rs.10,12,921/- made by invoking provisions of section 40(a)(ia) of the Income Tax Act, 1961 (hereinafter called as ‘the Act’) for deduction of tax. Ld. Counsel for the assessee reiterated the submissions as made before Ld. CIT(A). He further contended that the deductee has duly disclosed the amount in the return of income. Hence, no disallowance is [ ] [Smt. Ritu Singh, Bhopal] called for. He submitted that Ld. CIT(A) in utter disregard to the binding precedents which were set before him rejected the submissions of the assessee in a whimsical manner. He submitted that coordinate bench of this Tribunal in the case of Rajiv Kumar Agrawal Vs. Addl.

Commissioner of Income Tax (2014) 45 Taxmann.com 555 (Agra) in has decided the issue in favour of the assessee. He further contended that the Hon'ble Tribunal had relied on the judgement of the Hon'ble Delhi High Court rendered in the case of CIT Vs. Rajinder Kumar 362 ITR 241. Ld. Counsel further placed reliance on the judgement of the Hon'ble Supreme Court rendered in the case of Hindustan Coca Cola Beverages Pvt. Ltd. Vs. CIT in civil appeal No.3765 of 2007, 293 ITR 226.

[ ] [Smt. Ritu Singh, Bhopal] 5. I have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. Ld. CIT(A) has decided this issue by observing as under:

“10. Be that as it may, Circular No.275/201/95-IT(B) dated January, 29, 1997 issued by the Central Board Of Direct Taxes, in our considered opinion, should put an end to the controversy. The circular declares “no demand visualised u/s 201(1) of the Income Tax Act should be enforced after the tax deductor has satisfied the officer-in-charge of TDS, that taxes due have been paid by the deductee-assessee. However, this will not alter the liability to charge interest u/s 201(1A) of the Act till the date of payment of taxes by the deductee-assessee or the liability for penalty u/s 271C of the Income-tax Act”.

11. In the instant case, the appellant had paid interest u/s 201(1A) of the Act and there is no dispute that the tax due had been paid by the deductee-assessee (M/s.Pradeep Oil Corporation). It is not before us that circular is applicable to the fact situation on hand”. 8. The Ld. CIT(A) in view of the above binding precedent ought to have deleted the addition but he misdirected himself. When the issue has been decided by the higher forum after considering the law and issue in question, he is under statutory obligation to follow it. Any [ ] [Smt. Ritu Singh, Bhopal] deviation there from would tantamount the contempt of lawful authority and against the judicial discipline. I therefore, respectfully following the judgement of the Hon'ble apex court rendered in the case of Hindustan Coca Cola Beverages Pvt. Ltd. Vs. CIT (supra) and the decision of coordinate bench in the case of Rajiv Kumar Agrawal Vs. Addl. CIT direct the A.O. to delete this addition.

[ ] [Smt. Ritu Singh, Bhopal] 10. Per contra, Ld. D.R. opposed these submissions and supported the order of the authorities below. He contended that it was incumbent upon the assessee to produce bills & vouchers in support of his claim looking to the smallness of amount. The A.O. was justified under the facts and circumstances of the case to make a lumpsum addition on adhoc basis.

Ld. A.R. could not point out that what were the evidences placed before the assessing authority, which was sufficient to infer that the expenditure is duly supported by the evidences. Moreover, Ld. CIT(A) has further reduced the [ ] [Smt. Ritu Singh, Bhopal] disallowance by taking a reasonable view. This ground of the assessee’s appeal is dismissed. Appeal of the assessee is partly allowed.

Order was pronounced in the open court on 26 .12.2019.