Appeal Details
Counselvise Citation
[2013] 122 COUNSELVISE.COM (IT) 9188 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
23 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
27-12-2013
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
A
Assessment Year
2007-2008
Appeal Filed On
04-12-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NOS.2097 & 2098/PN/2012 (A.YS. 2007-08 & 2008-09) ITO, TDS-3, PUNE APPELLANT VS. KSB PUMPS LTD., MUMBAI PUNE ROAD, PIMPRI, PUNE - 411018 PAN: AAACK5918J RESPONDENT CO NOS.91 & 92/PN/2013 (ARISING OUT OF ITA NOS.2097 & 2098/2012) (A.YS. 2007-08 & 2008-09) KSB PUMPS LTD., MUMBAI PUNE ROAD, PIMPRI, PUNE - 411018 PAN: AAACK5918J CROSS OBJECTOR VS. ITO, TDS-3, PUNE APPELLANT ASSESSEE BY : SHRI P.J. AP TE DEPARTMENT BY : SHRI P.L. PATHADE DATE OF HEARING : 05.12.2013 DATE OF ORDER : 27.12.2013 ORDER PER SHAILENDRA KUMAR YADAV, J.M: 2 TWO APPEALS FILED BY REVENUE AND TWO CROSS OBJECTI ONS FILED BY ASSESSEE ARE ARISING OUT OF RESPECTIVE ORDERS OF CI T(A), PUNE PERTAINING TO THE SAME ASSESSEE ON ALMOST COMMON IS SUES. SO THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY T HIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ITA NO.2097/PN/2012, THE REVENUE RAISED THE F OLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT (A) ERRED IN HOLDING THAT PROVISION S OF SECTION 194H OF THE I.T. ACT, 1961 ARE NOT APPLICAB LE IN RESPECT OF SALE TURNOVER DISCOUNT OFFERED TO ITS AG ENTS WITHOUT APPRECIATING THE RATIO OF HON'BLE DELHI HIGH COURT IN THE CASE OF M/S IDEA CELLULAR LTD. (ITA NO. 145/2009 AND ITA NO.784/2009 DATED 19.02.2010) GIVEN ON SIMILAR FACT S. 2. THE APPELLANT CRAVES LEAVES TO AMEND OR ALTER ANY O R ALL THE GROUNDS OF APPEAL OR ADD A NEW GROUND WHICH MAY BE NECESSARY AT THE TIME OF THE HEARING OF THE CASE TH EREAFTER. 3. THE ORDER OF THE LEARNED CIT (A) BEING ERRONEOUS BE SET ASIDE AND A.O'S ORDER RESORTED ON THIS ISSUE. 3. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURE OF PUMPS AND VALVES. IT HAS ITS REGIST ERED OFFICE IN MUMBAI AND MANUFACTURING FACILITIES AT PUNE, COIMBA TORE, NASHIK AND VAMBORI AND BRANCH OFFICES AT VARIOUS PLACES. FOR VERIFICATION OF COMPLIANCE OF TDS PROVISIONS, SURVEY U/S.133A OF I. T ACT WAS CARRIED OUT AT OFFICE PREMISES AT PUNE ON 26.08.2008 AND BA SED ON VERIFICATION, COMBINED ORDER U/S.201(1) AND 201(1A) OF I.T ACT WAS PASSED ON 25.03.2011 FOR A.Y. 2007-08 AND 2008-09. THE MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTHORITY, WHERE IN VARIOUS CONTENTIONS WERE RAISED AND CIT(A) HAVING CONSIDERE D THE SAME, CIT(A) HAS HELD AS UNDER: 21. THUS, FROM THE ABOVE ANALYSIS TO JU DGE THE RELATIONSHIP BETWEEN PRINCIPAL AND AGENT THE WORDIN G OF THE AGREEMENT AS WELL AS TRUE NATURE OF THE AGREEMENT M UST BE ANALYZED. 3 22. FROM THE ANALYSIS OF THE AGREEMENT IT IS SEEN THAT : (I) APPOINTMENT OF DEALERS WAS ON THE BASIS OF PRINCIPA L TO PRINCIPAL (II) IT WAS CLEARLY MENTIONED IN THE AGREEMENT THAT DEAL ERS WERE NOT APPOINTED AS AGENTS, (III) GOODS WERE INVOICED TO DEALERS ON WHICH VAT/SALES T AX WAS CHARGED, (IV) THERE WAS NO PROHIBITION IN THE AGREEMENT TH AT DEALERS CANNOT SELL GOODS OF OTHER PARTIES, (V) THE DISCOUNT WAS ALLOWED ON THE SALES AND T HEREFORE, IT HAD THE EFFECT OF REDUCTION OF SALES FIGURE, (VI) DISCOUNT WAS NOT RECEIVED IN RELATION TO A NY SERVICES RENDERED, (VII) EVEN THE NATURE AND CHARACTER OF THE AGREEM ENT LEAVE APART WORDING OF THE AGREEMENT DOES NOT SUGGEST RELATIONSHIP OF PRINCIPAL AND AGENT. 23. THEREFORE, IN VIEW OF THE ABOVE POSITION, IT IS HELD THAT THE ITO(TDS)-3, PUNE WAS NOT JUSTIFIED IN INVOKING PR OVISIONS OF SEC. 194H OF INCOME-TAX ACT IN RESPECT OF TURNOV ER DISCOUNT ALLOWED TO IT'S DEALERS. THEREFORE, HE I S DIRECTED TO DELETE THE DEMAND RAISED U/S. 201(1) & 201(1 A) OF INCOME-TAX ACT. IN IT'S SUBMISSION, THE APPELLAN T HAS ALSO STATED THAT THE ITO(TDS)-3, PUNE HAS WRONGLY ADOPTED THE FIGURE OF RS.8,73,33,000/- INSTEAD OF RS.8,27,58,5487- IN RESPECT OF TURNOVER DISCOUNT FO R A.Y. 2007-08 & 2008-09. THIS ISSUE HAS BECOME ACADEMIC IN NATURE IN VIEW OF RELIEF ALLOWED ABOVE. HOWEVER, ASSESSING OFFICER SHOULD VERIFY THIS AND M AKE MENTION OF THE SAME IN ORDER GIVING EFFECT TO THIS ORDER TO AVOID ANY MISUNDERSTANDING ON THIS ISSUE IN FUTURE. THUS, SUBJECT TO ABOVE REMARKS, GROUND NO.2 IS ALLO WED. 4. SAME HAS BEEN OPPOSED ON BEHALF OF REVENUE. LEA RNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF ASSESSING OFFICER ON THE ISSUE WHILE LEARNED AUTHORIZED REPRE SENTATIVE SUPPORTED THE ORDER OF CIT(A) ON THE ISSUE. 5. AFTER GOING THE RIVAL SUBMISSIONS AND MATERIAL O N RECORD, WE FIND THAT WE ARE NOT INCLINED TO INTERFERE IN THE F INDINGS OF CIT(A). THE ASSESSING OFFICER WAS NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 194H OF I.T. ACT IN RESPECT OF TURNOVER DIS COUNT ALLOWED TO ITS 4 DEALERS BECAUSE THERE IS NO RELATION OF PRINCIPAL A ND AGENT. ACTUAL APPOINTMENT OF DEALER WAS ON THE BASIS OF PRINCIPAL TO PRINCIPAL BASIS. IT IS NOT IN DISPUTE THAT GOODS WERE INVOIC ED TO DEALERS ON WHICH VAT / SALES TAX WAS CHARGED. MOREOVER, THERE WAS NO PROVISION IN THE AGREEMENT THAT THE DEALER CANNOT S ELL GOODS OF OTHER PARTIES AS WELL. ACCORDINGLY, THE ORDER OF CIT(A) ON THE ISSUE IS UPHELD. 6. CROSS OBJECTIONS ARE NOTHING BUT SUPPORTING THE ORDER OF CIT(A), WHICH GOES INFRUCTUOUS IN VIEW OF ABOVE OUR FINDING ON MERIT AS DISCUSSED IN PREVIOUS PARAS IN THE APPEAL OF REV ENUE. 7. IN THE RESULT, BOTH THE REVENUES APPEALS AS WEL L AS CROSS OBJECTIONS ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THE DAY OF 27 TH DECEMBER 2013. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 27 TH DECEMBER, 2013 GCVSR COPY TO:- 1. DEPARTMENT 2. ASSESSEE 3. THE CIT(A)-V, PUNE 4. THE CIT-V, PUNE 5. THE DR, A BENCH, I.T.A.T., PUNE. 6. GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE
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