Income Tax Appellate Tribunal - Cuttack
Mahabir Prasad Agrawal, Kalahandi vs Acit, Sambalpur on 24 April, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL,
CUTTACK BENCH, CUTTACK
BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER
AND KULDIP SINGH JUDICIAL MEMBER
ITA No.51/CTK/2015
Assessment Year :2007-08
Mahavir Prasad Agarwal, Vs. ACIT, Circle 2(10, NH-6,
Jagannath Temple Road, Ainthapali, Sambalpur
Bhawanipatana.
PAN/GIR No. ABPPA 2439 K
(Appellant) .. ( Respondent)
Assessee by : Shri S.K.Hota, AR
Revenue by : Shri D.K.Pradhan, DR
Date of Hearing : 24/04/ 2017
Date of Pronouncement : 24 /04/ 2017
ORDER
Per N.S.Saini, AM
This is an appeal filed by the assessee against the order of CIT(A)- Cuttack, dated 28.11.2014, for the assessment year2007-08 .
2. Ground Nos.1 & 2 read as under:
"1. That, the Ld. Authorities below failed to appreciate the provisions of section 40(a)(ia) of the Act in view of the fact that, the expenses incurred towards the hire charges of equipment, machineries and transportation charges are below the limits prescribed under the provisions of the Act and not liable for TDS, therefore the additions of v 46,28,070 is liable to be deleted.2 ITA No. 51/ CTK/2015
Asse ssment Year :20 07- 08
2. That, the Ld. Authorities below failed to appreciate the provisions of section 40(a)(ia) of the Act in view of the fact that the provisions of section 40(a)(ia) are applicable to the amount remains payable at the end of the year and not the amount already paid during the year, therefore the additions of x 46,28,070 is liable to be deleted."
3. The brief facts of the case are that the assessee claimed to have paid Rs.46,28,070/- towards hire charges of equipment, machineries and transportation charges to the profit and loss account but no taxes have been deducted from such payment. The Assessing Officer by invoking the provisions of section 40(a)(ia) of the Act disallowed the deduction for the same.
4. On appeal, the CIT(A) confirmed the action of the Assessing Officer.
5. We find that Hon Hon'ble Allahabad High Court in the case of CIT vs. Victor Shipping Services (P) Ltd., (2013) 357 ITR 642(All) has held that for disallowing expenses from business and profession on the ground that tax has not been deducted at source, the amount should be payable and not it has been paid by the end of the year. The SLP filed against the judgment of Hon'ble Allahabad High Court has been dismissed by the Hon'ble Supreme Court vide judgment dated 2.7.2014 in CC No.(s) 8068/2014. In our considered opinion it has to be verified whether any amount out of Rs.46,28,070/- debited in the profit and loss account towards hiring charges of equipment and transportation charges was outstanding and payable as at the end of the year or not. 3 ITA No. 51/ CTK/2015
Asse ssment Year :20 07- 08 If there was any amount outstanding and payable as at the end of accounting year, then in view of the decision of Hon'ble Allahabad High Court in the case of Vector Shipping Services (P Ltd., (supra), the disallowance to that amount has to be made. If no amount is outstanding and payable as at the end of the accounting year, no disallowance has to be made out of expenditure u/s.40(a)(ia) of the Act. We, therefore, restore this issue to the file of the CIT(A) for adjudicating the same afresh in the light of the discussion made herein above after allowing reasonable opportunity of hearing to the assessee
6. Ground No.3 reads as under:
"The AO is not correct in passing the assessment order u/s.147/143(3) of the Act without disposing off the objection filed by the appellant and the CIT(A) is not correct in confirming the action of the Assessing Officer, therefore, the assessment order is liable to be quashed.
7. We find that the assessee had taken this ground of appeal before the CIT(A) as Ground Nos.1,2 & 3 of appeal.
8. On perusal of the order of the CIT(A), we find that the assessee has not adjudicated these grounds of appeal of the assessee while disposing of the appeal of the assessee. Therefore, in the interest of justice, we restore the issue involved in these grounds of appeal to the file of the CIT(A) for adjudicating the same after allowing reasonable opportunity of hearing to the assessee.
4ITA No. 51/ CTK/2015
Asse ssment Year :20 07- 08
9. In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 24 /04/2017 in the presence of parties.
Sd/- sd/-
(Kuldip Singh) (N.S Saini)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Cuttack; Dated 24 /04/2017
B.K.Parida, SPS
Copy of the Order forwarded to :
1. The Appellant : Mahavir Prasad Agarwal, Jagannath Temple Road, Bhawanipatana.
2. The Respondent. ACIT, Circle 2(10, NH-6, Ainthapali, Sambalpur
3. The CIT(A) Cuttack
4. Pr.CIT, Sambalpur
5. DR, ITAT, Cuttack
6. Guard file.
//True Copy// BY ORDER,
SR.PRIVATE SECRETARY
ITAT, Cuttack