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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI SANJAY ARORA, AM & SHRI PAWAN SINGH, JM
Order आदेश / O R D E R Per Sanjay Arora, A. M.: This is an Appeal by the Revenue and the Cross Objection (CO) by the Assessee agitating the part allowance of the Assessee’s appeal contesting its assessment u/s. 143(3) of the Income Tax Act, 1961 (‘the Act’ hereinafter) dated 18.11.2001 for the assessment year (A.Y.) 2009-10 by the Commissioner of Income Tax (Appeals)-13, Mumbai (‘CIT(A)’ for short) vide his order dated 29.11.2012.
The issue under reference is the disallowance u/s. 40(a)(ia), i.e., in view of the exigibility to tax deduction at source on the contractual payments by the assessee on which tax not been deducted and paid to the credit of the Central Government. The ld. CIT(A) allowed part relief to the assessee, i.e., to the extent the amount stands actually paid during the year, following the decision by the Special Bench of the Tribunal in Merilyn Shipping & Transport vs. Addl. CIT [2012] 16 ITR (Trib) 1 (Vish)(SB), so that, aggrieved, both the parties are in appeal; the assessee per a CO.
Before us, the ld. Authorized Representative (AR), the assessee’s counsel, noting the several decisions by the Tribunal taking a contrary view (i.e., than that expressed in Merilyn Shipping & Transport (supra)) in view of and following the decisions in CIT vs. Crescent Export Syndicate [2013] 216 Taxmann 258 (Cal) and CIT vs. Sikandarkhan N. Tunvar [2013] 357 ITR 312 (Guj), and distinguishing the decision in the case of CIT vs. Vector Shipping Services [2013] 85 CCH 201 (All), to some of which reference was made by him during hearing, would submit that he, in deference to the statement of law as expressed therein, concedes to the same. However, at the same time, the Hon’ble Delhi High Court in the case of CIT vs. Ansal Land Mark Township P. Ltd. [2015] 377 ITR 635 (Del) has held the second proviso to section 40(a)(ia) (inserted by Finance Act, 2012 w.e.f. 01.4.2013) as clarificatory and, therefore, retrospective. The tribunal has, following the said decision, copies of some of which stand placed on record (as part of the paper-book), set aside the matter back to the file of the A.O. for compliance of the amended provision. The same was urged and prayed for being adopted in the instant case as well. The ld. Departmental Representative (DR) could not cite or bring any contrary decision on record.
3 & CO No.160/M/15 (A.Y. 2009-10) Sealord Diving & Salvage Pvt. Ltd.
We have heard the parties, and perused the material on record. The tribunal per its several decisions, as recently in the case of Mahindra Navistar Automotives Limited (in ITA Nos. 3324 & 4645/Mum/2013 dated 13.05.2016), held that the amendment by way of second proviso and first proviso to section 40(a)(ia) and section 201(1) respectively by Finance Act, 2012 only seeks to and operationalize and implement the decision by the Hon’ble Supreme Court in Hindustan Coca Cola Beverages Pvt. Ltd. vs. CIT [2007] 293 ITR 226 (SC) holding that tax deduction at source being only one of the modes of payment of tax, where the same has been paid by the payee itself, the payer shall not be required to deduct tax at source once again. It is such views expressed by the tribunal per its various decisions, explaining the rationale of the amendment, that prevailed with the Hon’ble Court in Ansal Land Mark Township P. Ltd. (supra). Under the circumstances, we find no reason to take a different view. The assessment is accordingly set aside qua the said disallowance, and the matter restored to the file of the Assessing Officer to allow the assessee an opportunity to establish its’ case with regard thereto in terms of the amended provisions afore-said. The A.O. shall, verifying the assessee’s claims, decide afresh in light of the foregoing, issuing definite findings of fact. We decide accordingly.