Western Electric & Trading Co., New ... vs Department Of Income Tax

1 ITA 3420 & 3421/Del/2013

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH "H" NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K.: JUDICIAL MEMBER

ITA no. 3420 & 3421/Del/2013 A.Y. 2007-08 & 2008-09 ACIT, circle-29(1), Vs. M/s Western Electric & Trading Co., New Delhi. 358, Bulaqi Begum Street, Esplanade Road, Dariba Kalan, Delhi-110006.

PAN: AAAFW 0865 H ( Appellant ) ( Respondent )

Appellant by : Shri Arun Garg CA Respondent by : Shri B.R.R. Kumar Sr. DR

Date of hearing : 29-01-2015 Date of order : 30-01-2015.

ORDER

PER GEORGE GEORGE K, J.M:-

These appeals, preferred by the department, are directed against CIT(A)'s orders, both dated 12-3-2013. The relevant assessment years are 2007-08 & 2008-09.

2. The solitary issue, that is raised in these appeals, is, whether the CIT(A) is justified in deleting the additions of Rs. 17,29,699/- for A.Y. 2007-08 and Rs. 12,06,889/- for A.Y. 2008-09, made by the AO by invoking the provisions of section 40(a)(ia) of the Act.

2 ITA 3420 & 3421/Del/2013

3. Brief facts of the case are as follows: The assessee is a firm. It is engaged in contract work and was making payments to sub-contractors. The assessee was deducting TDS, while making payments to the sub-contractors. The AO was of the view that assessee was supposed to deduct TDS on crediting the accounts of the sub-contractors or on the payments of such amounts, which ever was earlier. Accordingly, for A.Y. 2006-07, assessment was reopened and AO made the disallowance of payments made to sub- contractors amounting to Rs. 80,15,216/-. The Assessee did not appeal against this disallowance made by A.O. for A.Y. 2006-07.

4. The assessee during AY 2007-08 has claimed the contract payments of Rs. 38,92,390/- u/s 40(a)(ia), on which the TDS has been paid by the assessee out of total disallowance of Rs. 80,15,216/- of the AY 2006-07. But the AO has allowed the deduction/ contract payments of Rs. 21,62,691/- only as against the claim of Rs. 38,92,390/-. The AO has refused to allow the deduction of Rs. 17,29,699/- (Rs. 38,92,390/- (-) Rs. 21,62,691/-).

5. Similarly during the AY 2008-09 the assessee has claimed the contract payments of Rs. 19,42,816/- u/s 40(a)(ia) on which the TDS has been paid by the assessee. But the AO has allowed the deduction/ contract payments of Rs. 7,35,927/- only as against the claim of Rs. 19,42,816/-. The AO has refused to allow the deduction of ARs. 12,06,889/- ( Rs. 19,42,816/- (-) Rs. 7,35,927/-)

6. The assessee, being aggrieved by the disallowance of Rs. 17,29,699/- and Rs. 12,06,889/- for AY 2007-08 and 2008-09 respectively, filed appeals 3 ITA 3420 & 3421/Del/2013

before the first appellate authority. The CIT(A) allowed the appeals of the assessee.

7. The Revenue, being aggrieved is in appeal before us. The ld. DR supported the order of the AO.

8. On the other hand, the AR had filed a letter, seeking adjournment of the case. However, we rejected the adjournment application and proceeded to dispose of the case on merits.

9. We have heard ld. DR and perused the material on record. The CIT(A), while allowing the appeal of the assessee had categorically found that the assessee had deducted TDS on contract payments, for which deduction is claimed in A.Y. 2007-08 and 2008-09. The relevant finding of the CIT(A) reads as under:

"5.5. I have considered the orders of the AO and the submissions of the assessee and I find considerable merit in the submission of the assessee that the AO is not justified to disallow the claim of deduction of the contract payments on which the TDS has been made and paid to the government u/s 40(a)(ia) on payment basis. After considering all the facts and circumstances of the case, I am of the view that the AO is not justified to make the disallowance of Rs. 17,29,699/- in the AY 2007-08 and Rs. 12,06,889/- in the AY 2008-09 and accordingly, the additions/ disallowances made by the AO are deleted.

10. The revenue has not been able to controvert the above findings of the CIT(A) by placing on record any material/ evidence. Therefore, we confirm 4 ITA 3420 & 3421/Del/2013

the order of the CIT(A) as correct and in accordance with law and no interference is called for. It is ordered accordingly.

11. In the result, the appeals filed by the revenue are dismissed.

Order pronounced in open court on 30-01-2015.

Sd/- Sd/- ( S.V. MEHROTRA ) ( GEORGE GEORGE K. ) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 30-01-2015. MP Copy to : 1. Assessee 2. AO 3. CIT 4. CIT(A) 5. DR