ITO,Ward-9(2), Kolkata, Kolkata V. Gyanendra Kumar Patni, Kolkata

ITA 1049/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75063 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 13-07-2012
• Court: TRIBUNAL
• Department Lawyers: APURBA KR DAS
• Assessee Lawyers: N O N E
• Section: 143(3); 194C; 147

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 1049/KOL/2012 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2006-07 INCOME-TAX OFFICER, WD-9(2), KOLKATA VS. GYANENDRA KUMAR PATNI (PAN:AFWPP4346M) (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 05.02.2014 DATE OF PRONOUNCEMENT: 13.02.2014 FOR THE APPELLANT: SHRI APURBA KR. DAS, JCIT, DR FOR THE RESPONDENT: N O N E $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-VIII, KOLKATA IN APPEAL NO. 44/CIT(A)-VIII/KOL/11-12 DATED 21.05.2012. ASSESSM ENT WAS FRAMED BY ITO, WARD-9(2), KOLKATA U/S. 147 R.W.S. 143(3) OF THE INCOME-TAX AC T, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2006-07 VIDE HIS ORDER DATED 26 .06.2011. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE DISALLOWANCE OF DEDUCTION BEING INTEREST PAID OR CR EDITED TO PAYEES WITHOUT DEDUCTING TDS, THEREBY THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT WAS INVOKED. FOR THIS, ASSESSEE HAS RAISED FOLLOWING FOUR GROUNDS: 1. THAT THE LD. CIT (APPEALS) ERRED IN LAW AS WEIL AS IN FACTS IN DELETING THE ADDITIONS OF RS.1 1,39,975/- MADE U/S 40 (A) (IA) OF THE LNCOME TAX ACT, 1961 BY THE ASSESSING OFFICER FOR NOT DEDUCTING TDS ON INTEREST PAID OR CREDITED TO PAYEES. 2. THAT THE LD. CIT (APPEALS) ERRED IN INVOKING PRO VISIONS OF RULE 29D OF LNCOME TAX RULES, AS THE PRESENT CASE FALLS UNDER PURVIEW OF R ULE 29C OF LNCOME TAX RULES. 3. THAT THE LD. CIT (APPEALS) ERRED IN RELYING ON T HE STATEMENT OF THE ASSESSEE IN RESPECT OF COLLECTION OF FORM NO. 15G FROM THE PARTIES BEFO RE THE DUE DATE WITHOUT ANY VALID EVIDENCE. 4. THAT THE LD. CIT (APPEALS) ERRED IN IGNORING THE FACT THAT THE ASSESSEE HAD CLAIMED TO HAVE ACTED UPON FORM NO. 15G RECEIVED FROM FIVE COM PANIES WHO/WHICH ARE NOT EVEN ELIGIBLE TO USE FORM NO. 15G UNDER THE PROVISIONS O F LNCOME TAX ACT, 1961. 3. WE HAVE HEARD LD. DR AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSEE HAS CLAIMED THE PAYMENT OF INTERE ST AS DEDUCTION AMOUNTING TO RS.11,42,287/- 2 ITA NO.1049/K/2012 GYANENDRA KUMAR PATNI , AY:2006-07 ON UNSECURED LOAN. THE ASSESSEE SUBMITTED THE COMP LETE DETAILS OF LOANS AND INTEREST PAID ALONGWITH RETURN OF INCOME, WHICH IS AS UNDER: I) TO 5 (FIVE) COMPANIES = RS. 4,06,825/- II) TO 3 (THREE) HUFS = RS. 73,386/- III) TO OTHER 17 (SEVENTEEN) INDIVIDUALS = RS. 6,62,076/- RS.11,42,287/- THE AO REQUIRED THE ASSESSEE TO INFORM THAT WHETHE THE TDS WAS DEDUCTED ON PAYMENT OF INTEREST ON UNSECURED LOANS OR NOT. THE ASSESSEE R EPLIED THAT IT HAS NOT DEDUCTED ANY TDS. THE AO ON PERUSAL OF RECORDS NOTICED THAT THE ASSESSEE HAS TUNROVER OF MORE THAN RS.40 LACS DURING THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR UNDE R APPEAL AND AS PER SECTION 194A OF THE ACT, THE ASSESSEE IS LIABLE TO DEDUCT TDS AT THE TIME OF CREDIT OR PAYMENT OF INTEREST PAYABLE TO DIFFERENT PARTIES/CONCERNS. ACCORDING TO HIM, AS T HE ASSESSEE FAILED TO DEDUCT TDS, THE PROVISIONS OF SECTIOIN 40(A)(IA) OF THE ACT WILL AP PLY AND ACCORDINGLY, HE MADE DISALLOWANCE OF INTEREST PAID. AGGRIEVED, ASSESSEE PREFERRED APPEA L BEFORE CIT(A). BEFORE CIT(A) ASSESSEE FILED COPIES OF FORM NO. 15G RECEIVED FROM THESE PE RSONS TO WHOM PAYMENT OF INTEREST IS MADE. THE CIT(A) GOING THROUGH THE DECISION OF HON BLE RAJASTHAN HIGH COURT IN THE CASE OF CHHOGMAL CHIRANJILAL (2002) 257 ITR 51 (RAJ.) DELET ED THE DISALLOWANCE BY OBSERVING AS UNDER: MOREOVER, UNDER THE PROVISIONS OF LAW ONCE THE DEC1 ARTION IN FORM NO. 15-G//151 IS PRODUCED BEFORE THE APPELLANT THE APPELLANT IS PREC LUDED FROM DEDUCTING THE TAX U/S 194A/ 194C OF THE ACT. THE FILING OF THESE FORMS BEFORE T HE LD. C.I.T AS PER RULE 29D IS A SUBSEQUENT EVENT FOR WHICH TIME HAS BEEN ALLOWED UP TO 30TH JUNE, I. E. AFTER THE CLOSE OF THE PREVIOUS YEAR WHEREAS THE TAX HAS TO BE DEDUCTE D AT THE TIME OF CREDIT OR PAYMENT TO THE PAYEE WHICH EVENT WILL ALWAYS BE BEFORE THE CLO SE OF THE PREVIOUS YEAR. THEREFORE ONCE FORM NOS. 15G ARE RECEIVED , TAX U/S 194A IS NOT DE DUCTABLE. I AM FORTIFIED BY THE JUDGEMENT OF THE RAJASTHAN HGH COURT IN THE CASE O F CHHOGMAL.. HIRANJIIA1 257 ITR PAGE 51 WHEREIN IT HAS BEEN HELD THAT IF THE DECLAR ATIONS ARE RECEIVED BEFORE CREDIT OR BEFORE PAYMENT WITHIN THE FINANCIAL YEAR THE APPELL ANT IS NOT LIABLE TO DEDUCT THE TAX. IT IS ONLY IF SUCH DECLARATION ARE RECEIVED AFTER THE CLO SE OF THE FINANCIAL YEAR THEN TAX DEDUCTION HAS TO BE MADE UNDER THE PROVISIONS CONTA INED IN RESPECTIVE PROVISIONS OF THE ACT. THE SSUE IS ALSO COVERED BY THE DECISION OF T HE KOLKATA BENCHES OF THE TRIBUNAL RELIED UPON BY THE APPELLANT ABOVE THAT ONCE THE AS SESSEE HAS RECEIVED OF THE DECLARATION, WHETHER HE HAS FILED SUCH DECLARATIONS BEFORE THE C IT OR NOT, TAX IS NOT DEDUCTIBLE UNDER THE PROVISIONS OF THE ACT. SAME VIEW HAS BEEN TAKEN BY THE HONB1E MUMBAI BENCH OF THE TRIBUNAL IN THE CASE VPIN P MEHTA. AS STATED EARLIER ONCE THE APPELLANT HAS RECEIVED P RESCRIBED FORM NO. 15G, DURING THEN PREVIOUS YEAR, WHICH ON THE FACTS OF THE CASE CANNO T BE DISPUTED, NO TAX WAS DEDUCTIBLE ON THE PAYMENT/CREDIT OF INTEREST BY THE APPELLANT TO THE CREDITORS. IN VIEW OF ABOVE FINDINGS, I AM OF THE VIEW THAT THE APPELLANT WAS NOT LIABLE TO DEDUCT THE TAX AND THE PROVISIONS OF SECTION 40(A)(IA) WERE NOT APPLICABLE. . IN THE LIGHT OF THE ABOVE FINDING AND DISCUSSION AN D CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE FOR THE YEAR UNDER CONSID ERATION BEING SIMILAR TO THE FACTS OF APPELLANTS OWN CASE FOR ASSESSMENT YEAR 2008-09 N APPEAL NO. 119/CIT(A)-VIII/KOL/10- 11 DECIDED ON 21.03.2012, THE ADDITION OF RS.11,39, 975/- MADE BY THE AO BY WAY OF DISALLOWANCE UNDER SEC. 40(A)(IA) IS HEREBY DELETED . 3 ITA NO.1049/K/2012 GYANENDRA KUMAR PATNI , AY:2006-07 4. WE FIND THAT THIS ISSUE IS SQUARELY COVERED IN F AVOUR OF THE ASSESSEE AND AGAINST REVENUE. THE ASSESSEE HAS RECEIVED FORM NO. 15G FROM THE PAR TIES BEFORE CREDITING OR BEFORE PAYING SUCH INTEREST AND SUBMITTED THE SAID FORM 15G BEFOR E THE AO DURING THE COUSE OF ASSESSMENT PROCEEDINGS U/S. 143(3) OF THE ACT. AS THE ISSUE I S SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE DECISION CITED SUPRA, WE FIND NO INFIRMITY IN T HE ORDER OF CIT(A) AND THE SAME IS UPHELD. APPEAL OF REVENUE IS DISMISSED. 5. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 6. ORDER IS PRONOUNCED IN THE OPEN COURT ON 13.02.2 014 SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13TH FEBRUARY, 2014 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT ITO, WARD-9(2), KOLKATA 2 ./,- / RESPONDENT SHRI GYANENDRA KUMAR PATNI, P-17, KA LAKAR STREET, KOLKATA-700 007. 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .