SWASTIK TRADING CO.,MUMBAI vs. ITO WD 2(4), KALYAN

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ITA 2883/MUM/2015Status: DisposedITAT Mumbai20 July 2016AY 2005-063 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that reopening the case under Section 147 on the same issue already decided by the CIT(A) was not justified. Furthermore, on merits, the disallowance under Section 40(a)(ia) was not warranted as individual transport payments were below Rs. 20,000.

What were the facts?

The assessee company's return for AY 2005-06 was selected for scrutiny. The AO later initiated proceedings under Section 154 for non-deduction of TDS on transport charges, leading to a disallowance. The CIT(A) allowed the assessee's appeal.

What were the issues?

Whether reopening under Section 147 on an issue already decided by CIT(A) is valid, and whether disallowance under Section 40(a)(ia) is applicable for transport charges below Rs. 20,000.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 154,Section 40(a)(ia),Section 194C,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”, BENCH MUMBAI

Before: SHRI R.C.SHARMA

Hearing: 12/07/2016Pronounced: 20/07/2016

This is an appeal filed by the assessee against the order of CIT(A)- Mumbai, for the assessment year 2005-2006 in the matter of order passed u/s 143(3) r.w.s. 147 of the I.T. Act,1961. 2. In this appeal the assessee is aggrieved for addition made by disallowing payment u/s.40(a)(ia) for assessee’s failure to deduct TDS at source u/s.194C.

3.

From the record I found that assessee is a company filed the return of income for A.Y.2005-06 on 31.10.2005 declaring the total income of Rs.54,520/-. The return was selected for scrutiny assessment u/s.143(3) and assessment was completed on 27-9-2007. Notice issued u/s.154 dated 23-6-2009 for rectification of mistake along with details of mistake namely TDS not deducted on transport charges u/s.194C. In the order passed u/s.154 dated 10-11-2009 the AO disallowed Rs.14,73,759/- for not complying with the provision of section 194C. The assessee preferred appeal before CIT(A). The CIT(A) allowed the appeal of assessee vide order dated 26-9-2011. On 9-2-2012 the AO issued a notice u/s.148 seeking to reopen the case on the very same issue which was subject matter of appeal before CIT(A). Issuing notice u/s.148 dated 9-2-2012 on the reason recorded on the same issue relating to which earlier proceeding u/s.154 was initiated, therefore, once again initiating the proceeding u/s.147 on the very same issue is not justified more so when the earlier rectification proceeding had merged with the CIT(A) order dated 26-9-2011. Even on merits I found that each payment so made for transport charges was below Rs.20,000/-, no disallowance was warranted u/s.40(a)(ia) r.w.s194C. I also found that reopening was also not valid insofar as very same issue has already been decided by the CIT(A) u/s.154 and the CIT(A) has allowed assessee’s appeal on the plea that there is no mistake apparent on record so as to warrant proceedings u/s.154 of the Act. Accordingly, both on merit as well as on the legal ground, I do not find any merit in the order of lower authorities.

4.

In the result, appeal of the assessee is allowed. Order pronounced in the open court on this 20/07/2016. (R.C.SHARMA) लेखा सद"य / ACCOUNTANT MEMBER मुंबई Mumbai; "दनांक Dated 20/07/2016 ".कु."म/pkm, "न.स/ PS आदेश क" ""त"ल"प अ"े"षत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant

2.

""यथ" / The Respondent. आदेशानुसार/ BY ORDER, 3. आयकर आयु"त(अपील) / The CIT(A), Mumbai. 4. आयकर आयु"त / CIT "वभागीय ""त"न"ध, आयकर अपील"य अ"धकरण, मुंबई / DR, ITAT, Mumbai 5. उप/सहायक पंजीकार 6. गाड" फाईल / Guard file. (Asstt.

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