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Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR
Before: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM
PER SHRI KUL BHARAT, JM.
Since there was a difference of opinion between the learned Members,
constituting a Division Bench of I.T.A.T., Jaipur, the Hon’ble President, I.T.A.T.
nominated Shri Bhavnesh Saini, Judicial Member as Third Member. The Hon’ble
Third Member vide order dated 02.02.2017 concurred with the findings of the
Hon’ble Accountant Member and held as under :-
2 ITA No. 613/JP/2015 Smt. Aruna Rani, Jaipur.
“ 5. Considering the above facts in the light of the above decision, it is clear that the nature of business of the assessee is such that assessee is required continuous supply of electricity for which assessee shall have to make payment to Jodhpur Vidyut Vitaran Nigam Ltd. for smooth functioning of the business activity of the assessee. In case no payment is made in cash to the above Nigam, then the electricity would have been discontinued. Therefore, having regard to the nature of business activity of the assessee and that assessee did not have banking facility where payment of electricity bill is to be made and considering the business expediency and other factors, I am of the view the case of the assessee would clearly fall in exception to Rule and no disallowance should be made under section 40A(3) of Income Tax Act. The learned Accountant Member has, therefore, rightly followed the decision of the coordinate Bench on identical issue in the case of Shri Rahul Pancholi (supra) in which on identical facts and issue, the departmental appeal was dismissed. Interestingly, the learned Judicial Member who has dismissed appeal of the assessee on the same set of facts, was the party to the order in the case of Shri Rahul Pancholi (supra). The learned Accountant Member was, therefore, right in his approach in allowing the appeal o the assessee by following the order of the coordinate Bench rather of the same Bench. The learned Judicial Member did not discuss in detail as to why he has not followed the order in the case o Shri Rahul Pancholi (supra) to which he himself is a signatory. The learned Judicial Member dismissed the appeal of the assessee on the sole reason that since the assessee has to make the payment of electricity bill regularly, it should have made such arrangement which is in accordance with the provisions of Section 40A(3) of the Income Tax Act. I may respectfully note that Tribunal is created by law and have to follow the law passed by legislator. If such view is considered, it would make proviso to section 40A(3) redundant. The ld. Counsel for the assessee, however, given an undertaking during the course of hearing that assessee, in future has made alternate arrangement to make payment for electricity bill as per provisions of law so that there is no violation o provisions of section 40A(3) of Income Tax Act.
Considering the totality of the facts and circumstances in the light of the above discussion, I agree with the view of the learned Accountant Member in allowing the appeal of the assessee holding that no disallowance3 should be made under section 40A(3) of the Act, in facts and circumstances of the case. I, therefore, agree with the view of learned Accountant Member. Let the file be placed before the regular Division Bench for passing a consequential order.”
3 ITA No. 613/JP/2015 Smt. Aruna Rani, Jaipur.
Therefore, in accordance with majority view, the appeal of the assessee is
allowed.
Order pronounced in the open court on 14 .02.2017.
Sd/- Sd/- ( HkkxpUn ½ ( dqy Hkkjr) ( BHAGCHAND) ( KUL BHARAT ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Jaipur Dated:- 14 /02/2017. Das/ आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू
The Appellant- Smt. Aruna Rani, Jaipur. 2. The Respondent – The ITO Ward 6(1), Jaipur. 3. The CIT(A). 4. The CIT, 5. The DR, ITAT, Jaipur 6. Guard File (ITA No. 613/JP/2015)
vkns'kkuqlkj@ By order,
सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत