VIJAY KUMAR GUPTA,NEW DELHI vs. ADDL. CIT, NEW DELHI

We have heard Ld. Representative of both the parties and perused the material available on record. The appeals are decided as under :

Assessee’s Appeal 3. Ld. Counsel for assessee did not press ground No. 1 of appeal of assessee . Same is dismissed as not pressed.

On ground No. 2 assessee challenged the order of Ld. CIT(A) in confirming the disallowance of Rs. 75,69,030/- u/s 40(a) (ia) of the I.T. Act.

In the course of assessment proceedings, the Assessing Officer, on examination of the books of accounts noticed that assessee had made payment of expenses amounting to Rs. 75,69,030/-. Assessing Officer observed that from the copy of TDS Contractor account, it was found that the assessee deducted the tax on the payments made to the contractors M/s. Pacific Exports & Imports prior to 1st March, 2008. But the same was not deposited in ,3803/Del/2013 Vijay Kumar Gupta vs. ACIT the Govt. account till 31st March, 2008. The assessee submitted that TDS on payment to contractors had been deposited before the due date of filing of the return. It was submitted that the amendment to section 40(a)(ia) by the Finance Act, 2010 is remedial and curative in nature and has retrospective effect. The assessee relied upon the order of ITAT Mumbai Bench in the case of Golden Stables Life Style Centre Pvt. Ltd. vs. CIT and order of ITAT Ahmedabad Bench in the case of Shri Kanubhai Ramjibhai vs. ITO. The Assessing Officer however noted that the amendment in section 40(a)(ia) is applicable from the assessment year 2010-11. Therefore, the amount in question was disallowed. The assessee reiterated the submissions made before Ld. CIT(A). However, Ld. CIT(A) following the order of Special Bench of ITAT Mumbai in the case of Bharati Shipyard Limited vs. DCIT 132 ITD 53 held that amendment to section 40(a)(ia) can not be held to the retrospective w.e.f. 1.4.2005 and dismiss the appeal of the assessee.

Ld. Counsel for assessee reiterated the submissions made before authorities below and submitted that amendment to provisions of section 40(a)(ia) of the Act, by the Finance Act 2010 is applicable respectively from 1.4.2005. Consequently any payment of tax deducted at source on or before the due date for filing of the return of income u/s 139 (1) of the Act can not be disallowed in Page 3 of 7 ITA Nos. 3600,3803/Del/2013 Vijay Kumar Gupta vs. ACIT terms of provision of section 40(a)(ia) of the Act. In support of his contention he has relied upon the decision of Delhi High Court in the case of CIT vs. Rajinder Kumar in dated 1st July, 2013, decision of Calcutta High Court in the case of CIT vs. Virgin Creations in ITAT No. 302 of 2011 dated 23rd November 2011, decision of Gujarat High Court in the case of CIT vs. BMS Projects P. Ltd. 88CCH 119 and decision of Gujarat High Court in the group cases of CIT vs. Om Prakash R Chaudhary dated 22nd November, 2013. On the other hand Ld. DR relied upon orders of the authorities below.

On consideration of rival submissions in the light of the above judgments cited by Ld. Counsel for assessee in which it was held that amendment in section 40(a)(ia) by Finance Act 2010 has retrospective effect, we are of the view the matter requires reconsideration at the level of the Ld. CIT(A). Ld. CIT(A) was therefore not justified in following the decision of ITAT Mumbai Bench. The orders of the authorities below are accordingly set aside and matter in issue is restored to the file of Ld. CIT(A) with direction to re decide this issue in the light of the above decisions and by verifying the required TDS deducted and paid by the assessee as per the above provisions contained u/s 40(a)(ia) of the Act. Ld. CIT(A) shall give reasonable sufficient opportunity of being heard Page 4 of 7 ,3803/Del/2013 Vijay Kumar Gupta vs. ACIT to the assessee . In the result this ground of appeal of assessee is allowed for statistical purposes.

The revenue in the departmental appeal challenged the deletion of addition of Rs. 48 lacs on account on unexplained unsecured loans.

In the course of assessment proceedings , AO noticed that the assessee had shown unsecured loan in his statement of assets and liabilities. The AO asked the assessee to file loan confirmations , ITRs bank statements of the parties namely Ashok Dusad, Ashok Kumar Palor, M/s. Rishab Chand Sanjay Kumar(HUF) and Surbhi Lunawat in whose names unsecured loans amounting to Rs. 10,00,000/- , Rs. 25,00,000/-, Rs. 7,00,000/- and Rs. 6,00,000/- respectively were shown. Due to non compliance, the AO observed that he has no option but to add the unsecured loans to the income of the assessee. AO accordingly made addition of Rs. 48 lacs.

The assessee submitted before Ld. CIT(A) that all the above documents were filed before AO and without affording reasonable opportunity of being heard addition is made. On 15th December, 2010 AO asked to file confirmation in respect of unsecured loans. The letter dated 16th December, 2010 alongwith other details were furnished before AO and confirmation of the loan was submitted on 21st December, 2010. All the confirmations and other documents were filed Page 5 of 7 ,3803/Del/2013 Vijay Kumar Gupta vs. ACIT on 21st December 2010 alongwith the letter of the same date. Copies of the same were also filed before Ld. CIT(A).

Ld. CIT(A) noted that assessee has filed affidavit before him (PB 3) in which assessee affirmed that he has filed all the above documents before AO. Ld. CIT(A) called for the assessment record which was not made available to him. Therefore, in the light of affidavit of the assessee and material on record Ld. CIT(A) noted that assessee has proved genuineness of the loans the addition made accordingly deleted.

After considering rival submissions we are of the view matter requires reconsideration at the level of the Ld. CIT(A). Ld. Counsel for assessee filed all the above papers/documents in the paper book to show that loan confirmations, copies of ITR , copies of affidavit and bank statements of all the creditors were filed before AO alongwith the letter dated 21st December, 2010. Copy of the affidavit of assessee filed before Ld. CIT(A) is filed at page 3 of the paper book which is undated and unattested. Ld. Counsel for assessee was not able to explain why affidavit of assessee was unattested. Anyhow, when assessee made a claim that all the required documents were filed before the AO and assessment record was not made available to the Ld. CIT(A), Ld. CIT(A) is required to issue summon u/s 131 to the AO to produce the assessment record before him as well as to call for the remand report from AO in writing on the above subject. However the Ld. CIT(A) without taking necessary steps in the matter merely accepted the affidavit of assessee. Even if no assessment record is made available to ,3803/Del/2013 Vijay Kumar Gupta vs. ACIT Ld. CIT(A) and he has accepted the affidavit of the asssesee, the Ld. CIT(A) is required to discuss the all the evidences filed by assessee in the appellate order and have pass a reasoned order considering the details noted in the documents. Ld. CIT(A) instead examining and verifying the evidences alleged to have been filed before Assessing Officer merely accepted the same without any verification. The course adopted by the Ld. CIT(A) for deleting the addition is thus unsustainable in law. In this view of the matter we set aside the order of the Ld. CIT(A) and restore this issue to his file with direction to redecide this issue strictly in accordance with law on following the observation in this order by giving reasonable sufficient opportunity of being heard to the assessee and Assessing Officer. In the result appeal is allowed for statistical purposes.