Income Tax Appellate Tribunal - Ahmedabad
Shri Ashokkumar J. Jain,, Ahmedabad vs The Dy.Cit, Circle-9,, Ahmedabad on 23 February, 2017
ITA No.269/Ahd/2014
A.Y.2008-09
Page 1 of 4
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "SMC" BENCH, AHMEDABAD
BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND
SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER
ITA No.269/Ahd/2014
Assessment Year: 2008-09
Shri Ashokkumar J. Jain vs. Dy. Commissioner of Income Tax,
C/o. Trailor Transport, Circle -9, Ahmedabad.
Calico Nagar,
Sarkhej Road,
Narol, Ahmedabad.
[PAN - ACLPJ 4780 D]
(Appellant) (Respondent)
Appellant by : None
Respondent by : Shri Dharamvir Yadav, Sr. D.R.
Date of hearing : 21.02.2017
Date of pronouncement : 23.02.2017
ORDER
PER S.S. GODARA, J.M.
This assessee's appeal for assessment year 2008-09 arises against CIT(A)-I, Ahmedabad's order dated 18.11.2013 passed in case no.CIT(A)-I/Cir.9/350/2013-14 in proceedings under section 143(3) of the Income Tax Act, 1961; in short 'the Act'.
2. Case called twice. None appears on assessee's behalf despite service of notice through Registered Post Acknowledgement Due dated 30.12.2016. We thus take up the instant appeal for adjudication on merits.
3. The assessee's first substantive ground challenges action of both the lower authorities in disallowing a sum of Rs.8,61,268/- under section 40(a)(ia) of the Act on the ground that he did not deduct TDS on account of interest payment made to various parties.
ITA No.269/Ahd/2014
A.Y.2008-09 Page 2 of 4
4. This case file reveals that the assessee had paid interest of Rs.38,588/-, Rs.1,79,488/-, Rs.4,26,916/- and Rs.85,144/-; respectively to four non-banking finance companies M/s. Cholamandalam DBS Finance Limited, India Bulls Bank (Fin.) Services Ltd, L&T Finance Limited & Reliance Capital Limited. There is no dispute that it did not subject the said interest expenses to TDS deduction. This formed the precise reason for the CIT(A) to invoke the impugned disallowance as held in the course of lower appellate proceedings.
5. We have heard the learned Departmental Representative. Relevant finding perused. We notice at the outset that the assessee's four payees hereinabove are non- banking finance companies already supposed to be assessed under the relevant provisions of the Act. It emerges in this back drop that section 40(a)(ia) second proviso inserted in the Act vide Finance Act 2012 w.e.f. 01.04.2013 stipulating that the impugned disallowance provision does not apply in case the concerned assessee is not an assessee in default in light of section 201(1) of the Act as held to be curative having retrospective effect w.e.f. 01.04.2005 by this Tribunal's co-ordinate bench decision in the case of Rajeev Kumar Agarwal vs. Addl. CIT - ITA No.337/Agra/2013 - decided on 29.05.2013 as upheld by Hon'ble Delhi High Court in its judgement in Tax Appeal No.160/2015 in the case of CIT vs. Ansal Land Mark Township (P) Ltd.; squarely applies here. We thus direct the Assessing Officer to verify the factual position and re-decide the issue afresh after affording adequate opportunity of hearing to the assessee.
6. Assessee's second substantive ground seeks to delete adhoc disallowance of expenses made by the CIT(A) qua total expenses of Rs.10,80,323/- in the nature of loading/unloading charges, labour charges, office expenses and drivers' meal expenses as against the lump sum adhoc disallowance of Rs.2,00,000/- made by the Assessing Officer.
ITA No.269/Ahd/2014
A.Y.2008-09 Page 3 of 4
7. There does not appear to be any dispute that the Assessing Officer was of the view that the above stated heads of expenses were unverifiable nature making him to disallow sum to the extent of a lump sum amount of Rs.2,00,000/-. The CIT(A) however is of the view that the above lump sum disallowance is too high making him to restrict the same to the extent of 5% of the above expenses.
8. Learned Departmental Representative strongly argues that this disallowance has already been deleted to a substantive extent in the course of the lower appellate proceedings. It however emerges that the Assessing Officer's Assessment Order dated 21.12.2010 invoked the impugned disallowance merely because assessee's various heads of expenses were of unverifiable nature since supported by self attested vouchers only. We find that he has not even asked the assessee to prove the contents of the said self attested vouchers. We observe in these facts that because of the failure on assessee's part in proving the genuineness of the expenses, neither of the lower authorities were justified in invoking the impugned disallowance forming subject matter of the instant ground. We thus accept assessee's second substantive ground. Disallowance in question of 5% of the above expenses amount upheld in course of lower appellate proceedings is deleted.
9. Assessee's third and last substantive ground pleads that both the lower authorities have erred in disallowing its prior period expenditure claim of Rs.1,32,500/-.
10. We notice from the Assessment Order that the above said sum comprises of two figures of Rs.70,000/- and Rs.62,500/- for bills debited in the names of Chotu Mistry and Ritesh Techno Fat. The Assessing Officer as well as the CIT(A) are of the view that these bills do not pertain to relevant previous year so as to be allowable. ITA No.269/Ahd/2014
A.Y.2008-09 Page 4 of 4
11. We have heard the Revenue. Relevant finding perused. It emerges that the assessee's case throughout has been that it had received two bills in question only in the relevant previous year so as to be treated as crystallised liability. This crucial plea has nowhere been disputed in course of the lower appellate proceedings. We notice in these factual circumstances Hon'ble jurisdictional High Court's decision in DCIT vs. Adani Enterprise Limited in Tax Appeal No.566/2016 upholding this Tribunal's decision deleting identical prior period expenditure disallowance in view of the fact that the relevant bills have been crystallised in the impugned assessment year in question and in view of the fact that there was no revenue implications since assessee had been taxed at uniform rate in earlier as well as current assessment years; is attracted in facts of the instant case as well. Since learned Departmental Representative fails to dispute difference in assessee's tax rate in the preceding as well as impugned assessment years, we thus accept assessee's third and final substantive ground as well.
12. In the result, this assessee's appeal is partly accepted. Pronounced in the open court today on the 23rd day of February, 2017.
Sd/- Sd/-
Pradip Kumar Kedia S.S. Godara
(Accountant Member) (Judicial Member)
Ahmedabad, the 23 rd day of February, 2017
PBN/*
Copies to: (1) The appellant (2) The respondent
(3) Commissioner (4) CIT(A)
(5) Departmental Representative (6) Guard File
By order
Assistant Registrar
Income Tax Appellate Tribunal
Ahmedabad benches, Ahmedabad