THE INCOME TAX APPELLATE TRIBUNAL IN
(DELHI BENCH "E" NEW DELHI)
BEFORE SHRI G.D. AGARWAL, VICE PRESIDENT
AND
SHRI C.M.GARG, JUDICIAL MEMBER
ITA NO. 2904/DEL/2012
(Assessment Year: 2007-08)
Mato Industries Vs. ACIT
A-5, Industrial Area, Circle -20(1)
G.T.Karnal Road
New Delhi New Delhi
PAN : AAAFM6530D
(Applicant) (Respondent)
ASSESSEE BY : Sh. Parveen Jain, Acv.
REVENUE BY : Shri Pdam Kanunjha , Sr. DR.
ORDER
PER C.M.GARG, JUDICIAL MEMBER :
This appeal has been preferred by the assessee against the
order of the Commissioner of Income Tax (Appeals) XI dated
01.03.2012 in appeal no. 121 / 2011-012 for assessment year 2007-
08.
2 ITA NO. 2904/ Del/2012
2. Although the assessee has raised as many as 6 grounds in
this appeal but except following grounds, other grounds have not
pressed and therefore ground no. (i), (ii), (iv), (vi) are dismissed as
not pressed and remaining ground no. (iii) and (v) read as under :-
"(iii) Whether on the facts and in the circumstances of
the case and in law, the Ld. Assessing Officer was
justified in applying the provisions of section 145A of the
Income-tax Act, 1961 when the trading addition has been
made by applying G.P. on estimated sales?
(v) Whether the provisions of section 40(a)(ia)
applying to payments made to residents during the year or
the amounts standing as payable in the Balance Sheet?
The Ld. Assessing Officer has applied the provisions of
section 40(a)(ia) to the amounts which have been paid
during the year."
3. Briefly stated, the facts giving rise to the present appeal are that
the assessee is a partnership concern, deriving income from
manufacturing excisable auto part bushes and engaged in trading of
the same goods. The assessee has filed its Income Tax Return for
the year under consideration on 1.11.2007 declaring an income of
Rs. 6,89,863/- . Subsequently, the case was selected for scrutiny
and during the course of assessment proceedings, the assessing
officer raised various issues and made certain additions in regard to
3 ITA NO. 2904/ Del/2012
the trading addition, under valuation of closing stock, addition u/s
145(A) of the Act , professional charges, ISO certificate expenses,
telephone expenses, car expenses, excess depreciation claimed on
the subsidy amount and finalise the assessment at total income of
Rs. 10,38,180/- as against the aforesaid return income.
4. Being aggrieved by the above assessment order the
assessee preferred appeal before CIT(A) it was partly allowed
deleting the certain additions but the assessee was again aggrieved
by the impugned order of the First Appellate Authority i.e. CIT(A)
which upheld the additions made by AO u/s 145A of the Act and u/s
40(a)(ia) of the Act with the grounds as reproduced above and
pressed by the assessee before this tribunal.
5. Ground no. (iii) :- The Ld. Counsel of the assessee
submitted that the issue is covered in favour of the assessee by the
decision of Hon'ble High Court of Delhi in the case of CIT Vs. SVP
Industries Ltd. in ITA No. 495/ 2013 dated 03.09.2014. The Ld. DR
fairly accepted , the issue is squarely covered in favour of the
assessee by the said decision of Hon'ble High Court.
4 ITA NO. 2904/ Del/2012
From perusal of the decision of Hon'ble High Court (Supra) we
note that the issue has been decided against the revenue in favour of
the assessee with following observations and conclusion :-
"10. Commissioner of Income Tax (Appeals), on
examination of the issue, had rightly held that a sper the
respondent-Assessee, the excise duty was payable at
the time of removal of goods and not at the time of
manufacture and on the last date of the accounting
year, the goods were lying in the bonded warehouse
and the duty would be payable only at the time of
unbonding. Thus, the contention of the respondent-
Assessee was that neither excise duty was paid nor the
duty was incurred. Further, the duty had not been
included and did not form part of the cost as it was not
claimed in the profit and loss account. The
Commissioner of Income Tax (Appeals) therefore
deleted the addition.
11. The Tribunal has affirmed the aforesaid finding
and dismissed the appeal of the Revenue. There is
nothing on record to show that the Revenue in the
appeal preferred before the Tribunal had raised the
contention that the excise duty had, in fact, become
payable and had been incurred in terms of the Excise
Act or the applicable rules.
12. In these circumstances, we have to hold that the
decision of the Tribunal is correct and accordingly,
substantial question of law mentioned above, is
answered in favour of the respondent- Assessee and
against the appellant-Revenue.
The appeal is accordingly disposed of. There will be no
order as to costs."
5 ITA NO. 2904/ Del/2012
In view of the above, we are inclined to hold that the issue of
disallowance u/s 145 A of the act is squarely covered in favour of the
Assessee and the addition made by the AO u/s 145A of the Act is
deserve to be deleted, accordingly, ground no. (iii) of the assessee
is allowed.
6. Ground no. V :- Apropos , this ground of the assessee, the
Ld. Counsel of the assessee submitted that the Assessing Officer has
applied the provisions of Section 40 (a) (ia) of the Act to the amounts
which have been paid during the year . The Ld. Counsel, further,
pointed out that the Assessing Officer invoked provisions of Section
40 (a) (ia) of the Act for disallowing the amount of Rs. 23,100/- paid to
Shri Narender Kumar Jain on account of professional charges and
also disallowed amount of Rs. 23,248/- paid to SVP system
management for ISO certificate expenses by holding that as per
provision of section 194 J of the Act. The assessee was required to
deduct TDS at the specified rates but the assessee failed to deduct
any TDS on these payments. The Ld. Departmental Representative
pointed out the assessee did not raise this ground before CIT(A).
Therefore, the same cannot be considered that at this stage. The Ld.
6 ITA NO. 2904/ Del/2012
Counsel of the assessee submitted that this ground has raised
before CIT(A) by way of application dated 25.08.2011 but it was not
addressed and adjudicated at the time of passing the impugned
order. The Ld. Departmental Representative (DR) replied that if it is
found just and proper that the department has no serious objection is
this limited issue is restored to the file of the CIT(A) for proper
adjudication.
7. On careful consideration on above submissions of both the
sides, we note that the Ld. DR has not disputed filing of application
dated 25.08 2011 before CIT(A) raising additional ground which
includes the issue of disallowance u/s 40(a) (ia) of the Act which has
not been addressed and adjudicated. Thus, we find at appropriate to
restore the issue to the file of CIT(A) for proper adjudication as the
Assessing Officer has made certain disallowances by invoking
provisions of Section 40 (a) (ia) of the Act.
8. Accordingly, ground no. (v) of the Assessee is deem to be
allowed for statistical purposes by restoring the issue to the file of
First Appellate Authority i.e. CIT(A) for proper adjudication as per
provisions of the Act.
7 ITA NO. 2904/ Del/2012
9. In the result, appeal of the assessee is allowed on ground no.
(iii) and deem to be allowed for statistical purposes on ground no. (v).
We may also point out that other grounds of the assessee have
already been dismissed as not pressed.
Order pronounced in open court on 2nd March, 2015.
Sd/- Sd/-
(G.D.Agarwal) (C.M.Garg)
Vice President Judicial Member
Dated 2nd March 2015
B.Rukhaiyar
Copy forwarded to
1. APPELLANT
2. RESPONDENT
3. CIT
4. CIT (A)
5. CIT (ITAT), New Delhi.
AR,ITAT
NEW DELHI.
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