ACIT 19(3), MUMBAI vs. RAMDARSH RAMKISHUN VISHWAKARMA, MUMBAI

आदेश / O R D E R Per Ashwani Taneja (Accountant Member): This appeal has been filed by the Revenue and Cross Objection by the assessee against the order of Ld. Commissioner of Income Tax (Appeals), Mumbai-30 {(in short ‘CIT(A)’}, dated 03.08.2012 passed against Assessment order u/s 143(3) dated 29.12.2011 for the Assessment Year 2007- 08.

3.2. Ld. DR relied upon the order of the AO. With regard to disallowance deleted by the Ld. CIT(A) relying upon the judgment of special bench in the case of Merilyn Shipping & Transports v. Addl. CIT, it was submitted by Ld DR that this judgment has been subsequently reversed by the High Court wherein contrary view taken by the Hon’ble Gujarat High Court in the case of CIT vs. Sikandarkhan N. Tunvar 357 ITR 312 and by Hon’ble Calcutta High Court in the case of CIT vs. Crescent Export Syndicate 262 CTR 525 (Calcutta).

3 Ramdarsh Ramkishun 3.3. We have gone through the orders of the lower authorities. It is noted that disallowance was made by the AO u/s 40(a)(ia), on the ground that the assessee failed to deduct tax at source on the amount of wages and labour charges for Rs. 1,76,43,453/- and purchase of materials from M/s Trinity Enterprises for Rs. 13,00,000/- and transportation charges for Rs.15,27,443/-. During the first appeal before Ld. CIT(A), the assessee raised various contentions challenging the order of the AO and disallowance made by the AO as bad in law on various grounds. The Ld. CIT(A) deleted part of the disallowance relying upon the judgment of Hon’ble special Bench in the case of Merilyn Shipping & Transports(supra) by holding that section 40(a)(ia) was not applicable on the amount which was not payable as on 31st March 2009.

3.4. Being aggrieved, the revenue has contested the order of the Ld. CIT(A) on the ground that the law declared by the special bench is no more a good law.

4.1. We have gone through the judgment of Hon’ble Calcutta High Court in the case of Crescent Export Syndicate(supra), and Hon’ble Gujarat High Court in the case of CIT vs. Sikandarkhan N. Tunvar,(supra) wherein it has been held that 4 Ramdarsh Ramkishun provisions of section 40(a)(ia) are applicable not only in respect of payments outstanding at the end of the year but also in respect of payments which have been paid during the year without making TDS. No contrary view has been brought before us. Under these circumstances, we set aside the order of the Ld. CIT(A) to that extent and send these grounds raised raised by the revenue as well as raised by the assessee in the cross objection before us back to the file of the AO. The AO shall decide this issue on all other grounds and all the issues that may be raised by the assessee before the AO for which AO shall give adequate opportunity of hearing to the assessee. The assessee is free to raise legal and factual issues before the AO. With these directions, Revenue’s appeal as well as Cross Objections filed by the assessee are sent back to the file of the AO and may be treated as partly allowed for statistical purposes.

Order pronounced in the open court on 29th June, 2016.