Between v. M/S.plr Projects Pvt. Ltd. …

IN THE HIGH COURT OF JUDICATURE AT HYDERABADFOR THE STATE OF TELANGANA AND THE STATE OF ANDHRAPRADESHI.T.T.A. No. 117 of 2015 Between: The Commissioner of Income Tax ….Appellant Vs. M/s.PLR Projects Pvt. Ltd. … . Respondent JUDGMENT PRONOUNCED ON: 08.10.2015 HON’BLE SRI JUSTICE :HON'BLE SRI JUSTICE G.CHANDRAIAH AND HON’BLE SRI JUSTICE: HON’BLE SRI JUSTICE CHALLAKODANDA RAM 1. Whether Reporters of Local newspapers Yes/No may be allowed to see the judgments? may be allowed to see the judgments? 2. Whether the copies of judgment may be Yes marked to Law Reporters/Journals marked to Law Reporters/Journals 3. Whether Their Ladyship/Lordship wish to Yes/No see the fair copy of the judgment? see the fair copy of the judgment? *HON’BLE SRI JUSTICE G. CHANDRAIAH&HON’BLE SRI JUSTICE CHALLA KODANDA RAM +I.T.T.A. No. 117 of 2015 %08-10-2015 The Commissioner of Income Tax ….Appellant Vs. $ M/s.PLR Projects Pvt. Ltd. … . Respondent !Counsel for the Appellant: Sri J.V.Prasad, senior SC for Income-taxDept. Counsel for Respondent: N.A <Gist : >Head Note: ? Cases referred: JUDGMENT:- (per Hon’ble Sri Justice Challa Kodanda Ram) This appeal filed by the Revenue under Section260-A of the Income Tax Act, 1961 (for brevity “the Act”)arises out of the Order dated 12.03.2014 in I.T.A.No.1079/H/2013 passed by the Income-Tax AppellateTribunal (for brevity “the Tribunal”), Hyderabad Bench “A”,Hyderabad relating to the assessment year 2007-2008. The following substantial questions of law are said to bearising from the orders of the Tribunal for adjudication: 1.Whether on the facts and circumstances of the case, theHon’ble ITAT was justified in deleting the disallowancemade u/s.40(a)(ia) of the Income Tax Act on paymentmade to M/s.Kranthi Constructions without deducting taxat source even though it was towards sub-contracting ofwork of the joint venture?Hon’ble ITAT was justified in deleting the disallowancemade u/s.40(a)(ia) of the Income Tax Act on paymentmade to M/s.Kranthi Constructions without deducting taxat source even though it was towards sub-contracting ofwork of the joint venture? 2.Whether on the facts and circumstances of the case, theHon’ble ITAT is correct in deleting the disallowance madeu/s 40(a)(ia) of the I.T. Act and holding that the insertion ofsecond proviso to Section 40(a)(ia) by Finance Act, 2012with effect from 01.04.2013 is retrospective in operation?Hon’ble ITAT is correct in deleting the disallowance madeu/s 40(a)(ia) of the I.T. Act and holding that the insertion ofsecond proviso to Section 40(a)(ia) by Finance Act, 2012with effect from 01.04.2013 is retrospective in operation? Heard Sri J.V.Prasad, learned Senior StandingCounsel for the Income-Tax Department appearing for theappellant and perused the material placed on record. As we are not inclined to admit this case on accountof the finding of facts given by the Tribunal, the matter isbeing disposed of at the admission stage. Heard Sri J.V.Prasad, learned Senior StandingCounsel for the Income-Tax Department appearing for theappellant and perused the material placed on record. As we are not inclined to admit this case on accountof the finding of facts given by the Tribunal, the matter isbeing disposed of at the admission stage. The Tribunal, as a matter of fact, found that a sum ofRs.1,52,09,336/- was not received by the assessee fromthe Department and that payment was made over directlyto one M/s.Kranti Constructions, who are sub-contractorsand who had in fact executed the work in terms ofMemorandum of Understanding that was entered into bythe assessee. The Tribunal also found that theDepartment made T.D.S. on payments made to M/s.KrantiConstructions and the same is reflected in the returns. Inother words, the Tribunal, as a matter of fact, found thatthese amounts paid to M/s.Kranti Constructions could notbe made as forming part of the assessment of theassessee. In that view of the matter, invocation of Section40(a)(ia) itself would not arise. This finding of fact is notchallenged before us. Hence, the appeal is liable to bedismissed on this ground alone. However, the Tribunal,having rendered a finding that the facts of the case underSection 40(a)(ia) could not be invoked, went on to discussthe retrospective effect given to Section 40(a)(ia) byFinance Act, 2012 with effect from 01.04.2013 while relying on the order of Tribunal, Cochin Bench in the caseo f Antony D. Mundackal v. A.C.I.T. in I.T.A.No.38/Cochin/2013, dated 29.11.2013 for the assessmentyear 2009-2010. Inasmuch as there was no necessity forthe Tribunal to enter into this arena since the order of theTribunal is erroneous to the extent of rendering the findingwith regard to the retrospective aspect of the Finance Act,2012, the issue is left open to the respective parties tocanvass the matter in appropriate forum. Subject to the above observation, this appeal isdismissed. No order as to costs. As a sequel to the dismissal of the appeal,Miscellaneous Petitions, if any pending, shall standdisposed of as infructuous. _________________ G. CHANDRAIAH, J 08.10.2015 bcj ______________________ CHALLA KODANDA RAM,J