Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “SMC” “C” BENCH: KOLKATA
Before: Shri Mahavir Singh, JM]
For the Appellant: Shri Somnath Ghosh, Advocate For the Respondent: Shri Rajendra Prasad, JCIT, Sr. DR ORDER
This appeal by assessee is arising out of order of CIT(A)-XXXVI, Kolkata vide Appeal No. 837/CIT(A)-XXXVI/Kol/Wd-1(4),Hooghly/2009-10 dated 18.08.2014. Assessment was framed by ITO, Wd-1(4), Hooghly u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for Assessment Year 2007-08 vide his order dated 30.12.2009.
The first issue in this appeal of assessee is against the order of CIT(A) confirming the addition of labour charges paid without deduction of TDS by invoking the provisions of section 40(a)(ia) of the Act.
At the outset, Ld. Counsel for the assessee stated that it has made labour charges payment of Rs.4.50 lacs during the year without deduction of TDS u/s. 194C of the Act and hence, the AO invoked the provisions of section 40(a)(ia) of the Act and he admitted this position. But Ld. Counsel for the assessee stated that now in view of amendment in section 40(a)(ia) of the Act by bringing the second proviso by Finance Act, 2012 is held to be retrospective by Hon’ble Delhi High Court in the case of CIT Vs. Ansal Land Mark Township (P) Ltd., & 161/2015 dated 26.08.2015, wherein it has been held as under: “No s. 40(a)(ia) disallowance for failure to deduct TDS on payment if payee has offered amount to tax. Second Proviso to s. 40(a)(ia) inserted by Finance Act 2013 w.e.f. 1.4.2013 should be treated as curative and to have retrospective effect from 1.4.2005. ITAT praised for "thorough analysis" of the provision”
In view of the above, the issue needs to be set aside to the file of AO. On query from the Bench, Ld. Sr. DR has not objected to the proposal. In view of the above facts 2 Tirupati Construction AY 2007-08 and circumstances, we are of the considered view that let the AO examine the details of recipients of payments, which are to be filed by assessee and in case these receipts are included in their respective return of income and paid taxes thereon, the AO will delete the disallowance made u/s. 40(a)(ia) of the Act in view of the decision in the case of Ansal Land Mark township (P) Ltd., supra. This issue of assessee’s appeal is allowed for statistical purposes.
The next issue in this appeal of assessee is against the order of CIT(A) confirming the addition of disallowance of cash payments amounting to Rs.1,25,195/- by invoking the provisions of section 40A(3) of the Act.
I have heard rival submissions and gone through facts and circumstances of the case. I find that the AO as well as CIT(A) admitted that these payments are urgent payments and made by bearer cheque and not account payee cheques. Ld. Counsel for the assessee stated that these payments were not doubted by the AO as non-genuine and these were actually genuine payments due to commercial expediency. Once these are genuine payments the issue is covered by the decision of Hon’ble Calcutta High Court in the case of CIT Vs. Crescent Export Syndicate, of 2008 dated 30.07.2008, wherein it has been held as under:
“….It further appears from the assessment order that neither the Assessing Officer nor the CIT(Appeal) has disbelieved the genuineness of the transaction. There was no dispute that the purchases were genuine. Accordingly, in our opinion, the learned Tribunal has correctly came to the conclusion by deleting the addition of Rs.15,69,116/- under section 40A(3) of the Act. On the other ground as it appears that the CIT(Appeal) has been directed to reconsider the matter. In view of that we do not think that any substantial question of law is involved in this matter. Hence the appeal being of 2008 is dismissed.” Since the issue is squarely covered by the decision of Hon’ble jurisdictional High Court, cited supra, in favour of assessee, we allow this ground of appeal of assessee.
7. In the result, appeal of assessee is partly allowed for statistical purposes.
8. Order is pronounced in the open court on 11.12.2015. Sd/- (Mahavir Singh) Judicial Member
Dated : 11th December, 2015 Jd.(Sr.P.S.)
Copy of the order forwarded to:
APPELLANT – M/s. Tirupati Construction, 618/618A, G. T. Road, Battala, PO Serampore, Dist. Hooghly, Pin-712 201, WB Respondent – ITO, Wd-1(4), Hooghly. 2 3. The CIT(A), Kolkata 4. CIT , Kolkata 5. DR, Kolkata Benches, Kolkata