M/s. Engineers India Ltd., New Delhi V. DCIT, New Delhi

CO 486/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4509 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 30-12-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NAINA SOIN KAPIL
• Keywords: Question of law; TDS
• Section: 154; 143(3); 234B; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: D , NEW DELHI BEFORE SMT. BEENA A PILLAI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 2821 /DEL/201 5 AY: 20 11 - 12 DCIT, CIRCLE 8(1) ROOM NO.415 4 TH FLOOR C.R.BUILDING I.P.ESTATE NEW DELHI 110 002 VS . ENGINEERS INDIA LTD. ENGINEERS INDIA BHAWAN 1, BHIKAJI CAMA PLACE R.K.PURAM NEW DELHI 110 066 PAN: AAACE5318C A N D CROSS OBJECTION NO.486/DEL/2015 (IN ITA NO. 2821 /DEL/201 5) AY: 20 11 - 12 ENGINEERS INDIA LTD. ENGINEERS INDIA BHAWAN 1, BHIKAJI CAMA PLACE R.K.PURAM NEW DELHI 110 066 PAN: AAACE5318C VS . DCIT, CIRCLE 8(1) ROOM NO.415 4 TH FLOOR C.R.BUILDING I.P.ESTATE NEW DELHI 110 002 (APPELLANT) (RESPONDENT) D EPARTMENT BY : SMT.NAINA SOIN KAPIL, SR.DR . ASSESSEE BY : SH. NAGESWAR RAO, ADV. & SH . PURUSHOTTAM ANAND, ADV. DATE OF HEARING : 29/01/2019 DATE OF PRONOUNCEMENT : 08 /02/2019 ITA NO. 2821/DEL/15 AND CROSS OBJECTION 486/DEL/15 ENGINEERS INDIA LTD. 2 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER P RESENT C ROSS APPEALS HA VE BEEN FILED BY REVENUE AS WELL AS ASSESSEE AGAINST ORDER DATED 27/02/15 PASSED BY LD.CIT(A) - 3, NEW DELHI ON FOLLOWING GROUNDS OF APPEAL: ITA 2821/DEL/15 (REVENUE) 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD.CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF PAYMENT OF RS.1,52,99,818/ - BY THE AO U/S 40(A)(I) OF THE I.T.ACT, 1961. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. CROSS OBJECTION 486/DEL/15 (ASSESSEE) BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, M/S ENGINEERS INDIA LTD (RESPONDENT) CRAVES LEAVE TO PREFER TO FILE CROSS OBJECTIONS IN RESPONSE TO THE APPEA FILED BY THE DEPARTME NT AGAINST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 3 ['CIT(A)] UNDER SECTION 250 OF THE INCOME - TAX ACT, 1961 (THE ACT) ON THE FOLLOWING GROUNDS: 1. THAT THE LEARNED CIT(A) ERRED IN NOT ADJUDICATING ON .GRO UND RAIS ED BY THE RESPONDENT IN APPEAL AGAINST TDS CREDIT OF RS . 18,99,261 NOT AL LOWED BY T HE ASSESSING OFFICER WHILE COMPUTING TAX DEMAND OF THE RESPONDENT ASSESSEE. 2. THAT, BASED ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) AND THE ASSESSING OFFICER OU GHT TO HAVE GRANTED TDS CREDIT OF ITA NO. 2821/DEL/15 AND CROSS OBJECTION 486/DEL/15 ENGINEERS INDIA LTD. 3 RS. 18,99,261 WHILE COMPUTING TAX DEMAND OF THE RESPONDENT ASSESSEE. 3. THAT THE LEARNED CIT(A) ERRED IN NOT SPECIFICALLY ADJUDICATING ON THE ISSUE THAT NO INTEREST U/S 234B OF THE ACT COULD BE LEVIED IN FACTS OF THE PRESE NT CASE, SINCE PREPAID TAXES PAID BY THE RESPONDENT ASSESSEE WAS IN EXCESS OF 90% OF THE TOTAL TAX LIABILITY AND MERELY HOLDING THAT .INTEREST U/S 234B IS CONSEQUENTIAL. 4. THAT THE LEARNED CIT(A) ERRED IN NOT SPECIFICALLY ADJUDICATING ON THE ISSUE OF INTE REST U/S 234C EXCESS CHARGED BY THE ASSESSING OFFICER AND MERELY HOLDING THAT INTEREST U/S 234C IS CONSEQUENTIAL. 2. BRIEF FACTS OF CASE ARE AS UNDER : RETURN OF INCOME WAS FILED DECLARING TOTAL INCOME OF RS. 7,21,44,97,477/ - , WHICH WAS SUBSEQUENTLY REVISED TO TOTAL INCOME OF RS. 7,15,67,26,286/ - . A SSESSEE IS A PUBLIC LIMITED COMPANY AND IS ENGAGED IN BUSINESS OF ENGINEERING, CONSULTANCY AND LSTK CONTRACT WORK. IT IS A PUBLIC SECTOR COMPANY WITH MINISTRY OF PETROLEUM AND NATURAL GAS ESTABLISHED UNDER INDIAN COMPANIES ACT, 1956 AND IS PRIMARILY ENGAGED IN PROVIDING ENGINEERING AND TECHNICAL CONSULTANCY SERVICES AND EXECUTION OF CONTRACTS ON A TURNKEY BASIS PREDOMINANTLY IN OIL/GAS/HYDRO CARBON SECTORS. THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) WAS FINALISED AT TOTAL INCOME OF RS. 7,16,62,27,270/ - AFTER MAKING DISALLOWANCE OF RS. 9750/ - U/S 14A OF THE ACT , AND DISALLOWANCE OF RS. 94,91,410/ - U/S 40(A) OF THE ACT ON ACCOUNT OF NON - DEDUCTION OF TDS U/S 194H ON PAYMENTS MADE TO FOREIGN AGENTS. 3 . AGGRIEVED BY ADDITIONS , ASSESSEE PREFERRED APPEAL BEFORE LD.CIT(A) WHO DELETE D DISALLOWANCE U/S 40(A) OF THE ACT. ITA NO. 2821/DEL/15 AND CROSS OBJECTION 486/DEL/15 ENGINEERS INDIA LTD. 4 3.1 . AGGRIEVED BY ORDER OF LD.CIT(A) REVENUE IS IN APPEAL BEFORE US NOW . 3 . 2 . A T THE OUTSET , LD. C OUNSEL SUBMITTED THAT ISSUE RAISED BY REVENUE IN ITS APPEAL STANDS SQUARELY COVERED BY DECISION OF THIS T RIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2010 - 11 IN ITA NO. 2 2 35/ D EL/2014 V IDE ORDER DATED 02/03/2017. 3 . 3 . HE FURTHER SUBMITTED THAT SAI D ORDER STANDS CONFIRMED BY HONBLE DELHI HIGH COURT IN ITA NO. 1156/2017 V IDE ORDER DATED 14/03/18 WHERE IN HONBLE DELHI HIGH COURT OBSERVED AS UNDER: THIS COURT NOTICES THAT THE ITAT HAS FOLLOWED THE JUDGEMENT OF THE DIVISION BENCH OF THIS COURT IN CI T VS. EON TECHNOLOGY (P) LTD. 2011 (203) TAXMAN 266, WHERE THE COURT IN SIMILAR CIRCUMSTANCES HELD THAT PROVIDING SUCH SERVICES, IN RESPECT OF ACTIVITIES ABROAD, DO NOT CONSTITUTE FEE FOR TECHNICAL SERVICES AND THEREFORE, DISALLOWABLE U/S 40(A). IN VIEW O F THESE CIRCUMSTANCES, NO SUBSTANTIAL QUESTION OF LAW ARISES. THE APPEAL IS CONSEQUENTLY DISMISSED. 4 . LD. SR. DR THOUGH SUPPORTED ORDER OF LD.A.O. COULD NOT REFUTE AFORE STATED OBSERVATIONS BY HONBLE DELHI HIGH COURT WHEREIN DECISION OF THIS T RIBUN AL FOR ASSESSMENT YEAR 2010 - 11 IN ASSESSEES OWN CASE, HAS BEEN UPHELD. 5 . WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. ADMITTEDLY ISSUE STANDS SQUARELY COVERED IN ASSESSEES FAVOUR BY DECISION OF THIS T RIBUNAL IN ASSESSEES OWN CASE , WHICH HAS BEEN UPHELD BY HONBLE DELHI HIGH COURT (SUPRA). RESPECTFULLY FOLLOWING THE SAME WE UPHOLD VIEW TAKEN BY LD. CIT (A). ITA NO. 2821/DEL/15 AND CROSS OBJECTION 486/DEL/15 ENGINEERS INDIA LTD. 5 5. 1. ACCORDINGLY GROUND RAISED BY REVENUE STANDS DISMISSED. 6. IN THE RESULT APPEAL FILED BY REVENUE STANDS DISMISSED. 7. CROSS OBJECTION NO. 486/ DEL/ 2015 GROUND NO. 1 IS GENERAL IN NATURE THEREFORE DO NOT REQUIRE ANY ADJUDICATION. 7. 1 . GROUND NO. 2 : ASSESSEE RAISED ISSUE IN RESPECT OF TDS CREDIT NOT BEING ALLOWED BY LD. AO WHILE COMPUTING TAX DEMAND. ASSESSEE HAS FILED BEFORE US APPLICATION DATED 17/01/2014 UNDER SECTION 154 OF I.T.ACT, 1961 ( THE A CT ) FILED BEFORE LD.ACIT . 7. 2 . LD. AO IS DIRECTED TO PASS AN ORDER IN THE APPLICATION SO FILED BY ASSESSEE AND GIVE CREDIT TO TDS AS PER LAW. 8. GROUND NO. 3, 4 IS CONSEQUENTIAL AND THEREFORE DO NOT REQUIRE ANY ADJUDICATION. 9. IN THE RESULT, C ROSS O BJECTION FILED BY ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 0 8 T H FEBRUARY, 2019. S D / - S D / - ( PRASHANT MAHARISHI) (BEENA A PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 0 8 T H FEBRUARY, 2019 GMV ITA NO. 2821/DEL/15 AND CROSS OBJECTION 486/DEL/15 ENGINEERS INDIA LTD. 6 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR I TAT DELHI BENCHES ITA NO. 2821/DEL/15 AND CROSS OBJECTION 486/DEL/15 ENGINEERS INDIA LTD. 7 DATE DRAFT DICTATED ON 06.02.19 DRAFT PLACED BEFORE AUTHOR 06.02.19 07.02.2019 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 0 7 . 0 2 . 1 9 KEPT FOR PRONOUNCEMENT ON & ORDER UPLOADED ON : 0 8 . 0 2 . 1 9 FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.