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Income Tax Appellate Tribunal, PANAJI BENCH : PANAJI
Before: SHRI SATBEER SINGH GODARA & SHRI INTURI RAMA RAO
ITA.No.251/PAN./2019 Assessment Year 2012-2013 The ACIT, Circle-1(1), Shri Venancio Gonsalves, Aayakar Bhavan, 1st Floor, H.No.203, Villa Gonsalves vs., Patto, Panaji, Goa. Chimbel, Goa – 403 006. PIN – 403 001 PAN ADQPG0300A (Appellant) (Respondent) For Assessee : -None- For Revenue : Shri N. Shrikanth Date of Hearing : 14.07.2023 Date of Pronouncement : 18.07.2023 ORDER PER SATBEER SINGH GODARA, J.M. : This assessee’s appeal, for assessment year 2012- 2013, arise against the CIT(A), Panaji-1, Panaji’s order in ITA.No.CIT(A), PNJ-1/10299/2015-16, in proceedings u/sec. 143(3) of the Income Tax Act, 1961 (in short "the Act").
Case called twice. None appears at assessee’s behest. He is accordingly proceeded ex-parte.
The assessee raises the following substantive grounds in the instant appeal :
2 ITA.No.251/PAN./2019 1. In the facts and circumstances of the case the commissioner of Income Tax (Appeals) Panaji Goa erred in confirming the action of the assessing officer of disallowing the construction expenses of Rs.29,00,838/- u/s 40(a)(ia) of I.T. Act on the ground that no taxes were deducted at source from contractual payments related to said expenses despite the fact that the partnership firm M/s. Buildtech Real Estate Developers (BRED) which received the said payments (i) had furnished its return of income for the year u/s 139 (ii) had taken into account aforesaid payment in the computation of income in such return and (iii) had paid tax due on the income declared by it in the said return.
2. The Commissioner of Income Tax (Appeals) Panaji Goa has erred in law in not accepting the contention of the appellant that since the partnership firm M/s Buildtech Real Estate Developers (BRED) which received payments of Rs.29,00,838/- related to construction expenses on which no taxes were deducted at source before the end of the year under consideration had paid the entire tax on its total income of the year which included the above payment of Rs29,00,838/- the assessing officer should have allowed the construction expenses related to said payments in his assessment order passed for the year in view of retrospective applicability of second proviso to sub 3 ITA.No.251/PAN./2019 clause (ia) of section 40(a) of I.T. Act inserted by the Finance Act 201 2 w.e.f. 01.04.2013.
3. The Commissioner of Income Tax (Appeals) Panaji Goa while confirming the action of the assessing officer of disallowing construction expenses of Rs.29,00,838/- u/s 40(a) (ia) of I.T. Act has erred in not following the judgment of Delhi High Court in the matter of CIT V. Ansal Landmark Township Pvt Ltd 61 Taxman.com45 holding that the second proviso to section 40(a)(ia) is declaratory and curative and hence has retrospective effect from 01.04.2005.
The Appellant craves leave to add, alter, amend or modify any of the above grounds of the appeal.”
Mr. Shrikanth invited our attention to the CIT(A)'s detailed discussion affirming the impugned sec.40(a)(ia) disallowance as under :
“6. The appellant and Alicia Fialho are Goan Residents and married under the provisions of Portuguese Civil Code and therefore provisions of section 5A of I.T. Act are applicable to them. Similar additions have been made to the returned income of both spouses. The appeal in the case of the wife Smt. Alicia Fialho was passed on 22.12.2017 by CIT (Appeals). Same grounds have been 4 ITA.No.251/PAN./2019 raised in the case of husband, who is the appellant in this case.
Ground nos. 1 to 7: These grounds relate to disallowance of construction expenses payable, treated as contingent in nature, wherein the AO has made a total disallowance of Rs.17,19,450/- and Rs.40,29,990/- in the hands of the communion and 50% thereof in the hands of the appellant. My predecessor CIT (Appeals) in the above referred order in the case of Mrs. Alicia Fialho decided in para 3.4 of his order that the addition made by the AO should be deleted. Following the precedence and for the reasons discussed in the said order the addition made in the case of this appellant are deleted and ground nos. 1 to 7 are allowed.
Ground nos.8 to 10 : These grounds pertain to disallowance u/s 40(a)(ia). In para 4.6 of the order of the predecessor CIT (Appeals), it has been decided that disallowance is upheld. Following the said precedence and for the reasons discussed therein, the addition made by the AO is upheld and the appeal on ground nos. 8 to 10 is dismissed.”
The assessee’s sole substantive ground before us is that the recipient M/s. Buildtech Real Estate Developers [“BRED”] has already been assessed qua the impugned 5 ITA.No.251/PAN./2019 receipts in it’s return of income filed u/sec.139 of the Act and therefore, sec.40(a)(ia) 2nd proviso inserted in the Finance Act, 2012 w.e.f. 01.04.2013 stipulating that such an assessee would not be treated as an assessee in default read with sec.201(1) 1st proviso, squarely applies in the instant appeal. We find from perusal of the said latter proviso that the pre- condition thereof is that all the relevant details have to be furnished as per clauses (i) to (iii) which have no where been complied in the instant case file. Coupled with this, there is further no indication that there is any change in the facts as it was in case of the assessee’s wife Smt. Alicia Fialho as both are governed under the Portuguese Civil Court u/sec.5A of the Act. We see no merit in the assessee’s instant sole substantive grievance. The same stands rejected therefore.
This assessee’s appeal is dismissed in above terms.
Order pronounced in the Open Court on 18.07.2023.