Dy. CIT, Circle-9, Pune V. Shri Lalit R. Shinde, Pune

ITA 1060/PUN/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1766 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 10-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D N PARAKH
• Assessee Lawyers: S N DOSHI
• Section: 143(3)

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE , !', $ % BEFORE SHRI VIKAS AWASTHY, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.1060/PN/2013 ASSESSMENT YEAR : 2009-10 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 9, PUNE. . APPELLANT VS. SHRI LALIT R. SHINDE, PLOT NO.212, SECTOR 21, YAMUNANAGAR, NIGDI, PUNE 411 044. PAN : AERPS8682R . RESPONDENT / APPELLANT BY : SHRI D. N. PARAKH / RESPONDENT BY : SHRI S. N. DOSHI / DATE OF HEARING : 11.05.2016 / DATE OF PRONOUNCEMENT: 03.06.2016 & / ORDER PER PRADIP KUMAR KEDIA, AM : THE CAPTIONED APPEAL FILED BY THE REVENUE IS AGAINS T THE ORDER OF CIT(A)-V, PUNE DATED 11.02.2013 RELATING TO ASSESSM ENT YEAR 2009-10 PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (I N SHORT THE ACT). 2. BY WAY OF THE PRESENT APPEAL, THE REVENUE HAS CH ALLENGED THE ACTION OF THE CIT(A) IN DELETING THE DISALLOWANCE OF RS.2,13, 98,549/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE OF RECEI PTS BETWEEN 26AS STATEMENT AND THE RECEIPTS DECLARED IN THE RETURN OF INCOME O F THE ASSESSEE. 3. BRIEFLY STATED, THE ASSESSEE IS AN INDIVIDUAL EN GAGED IN THE BUSINESS OF CABLE NETWORK. THE RETURN OF INCOME FOR THE ASSESS MENT YEAR 2009-10 WAS FILED DECLARING A TOTAL INCOME OF RS.83,15,660/-. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT AS PER 26AS STATEMENT, TOTAL 2 ITA NO.1060/PN/2013 RECEIPT WAS RS.4,09,06,049/- WHILE THE ASSESSEE HAS SHOWN RS.1,95,07,500/- ONLY UNDER THE HEAD CARRIAGE COMMISSION. THE ASS ESSING OFFICER, THUS, FOUND THAT THERE WAS UNDERSTATEMENT OF RECEIPT AMOU NTING TO RS.2,13,98,549/- BY THE ASSESSEE. ON BEING CONFRONTED ON THE ISSUE, THE ASSESSEE SUBMITTED THAT CERTAIN RECEIPTS WERE TRANSFERRED IN FAVOUR OF THE THIRD PARTY SUCH AS DEN MANORANJAN PVT. LTD. AND DEN MANORANJAN SATELLITE P VT. LTD., WHICH ARE JOINT VENTURE COMPANIES IN WHICH THE ASSESSEE HAS BUSINES S INTEREST. IT WAS ALSO SUBMITTED THAT THE SAID ENTITIES HAVE DULY ACCOUNTE D FOR THESE RECEIPTS IN THEIR BOOKS OF ACCOUNT. HOWEVER, THE ASSESSING OFFICER D ECLINED TO ACCEPT THE CONTENTIONS OF THE ASSESSEE. THE ASSESSING OFFICER OBSERVED THAT DIFFERENT PARTIES IN THE SATELLITE/MEDIA INDUSTRIES HAVE CRED ITED THE AMOUNT IN FAVOUR OF THE ASSESSEE AND MADE PAYMENTS. TDS HAS BEEN DULY DEDUCTED ON THESE PAYMENTS IN FAVOUR OF THE ASSESSEE. THEREFORE, THE ASSESSEE IS LIABLE TO PAYMENT OF TAXES ON THE RECEIPTS. HE ACCORDINGLY B ROUGHT DIFFERENTIAL AMOUNT OF RS.2,13,98,549/- TO TAX BY MAKING ADDITION THERE OF TO THE TOTAL INCOME OF THE ASSESSEE. 4. IN APPEAL, THE CIT(A) APPRECIATED THE CONTENTION S OF THE ASSESSEE AND HELD THAT ONCE THE AMOUNT HAS BEEN TRANSFERRED BY T HE ASSESSEE TO JOINT VENTURE NAMELY M/S DEN MANORANJAN SATELLITE PVT. LTD. AND A CCOUNTED FOR BY THE SAID JOINT VENTURE COMPANY, THERE REMAINS NO BASIS FOR M AKING ADDITION IN THE HANDS OF THE ASSESSEE. HE ACCORDINGLY DELETED THE ADDITI ON SUBJECT TO THE OBSERVATIONS THAT CREDIT FOR THE CORRESPONDING TDS ON INCOME NOT DECLARED IS NOT AVAILABLE TO THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE US. 6. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE, CONTENDED THAT THE CIT(A) HAS UNILATERALLY GIVEN THE RELIEF T O THE ASSESSEE WITHOUT GIVING ANY SUITABLE OPPORTUNITY TO THE ASSESSING OFFICER T O VERIFY EVIDENCES RELATING TO THE RECONCILIATION STATEMENT, JOINT VENTURE AGRE EMENT, BILLS RAISED BY THE JOINT VENTURE COMPANY AND OTHER EVIDENCES RELIED UPON BY THE ASSESSEE BEFORE THE CIT(A). IT IS NOT KNOWN AS TO HOW THE ASSESSEE HAS SUBSEQUENTLY ADJUSTED THE 3 ITA NO.1060/PN/2013 RELEVANT AMOUNT QUA DEN MANORANJAN SATELLITE PVT. LTD. AND AS TO WHY TH E PAYMENT HAS BEEN MADE IN THE NAME OF THE PRESENT AS SESSEE THOUGH THE SERVICES WERE RENDERED BY DEN MANORANJAN SATELLITE PVT. LTD. . THE RECONCILIATION STATEMENT FILED BY THE ASSESSEE REQUIRES TO BE VERI FIED, IN THE LIGHT OF EVIDENCES AND MATERIAL PLACED BEFORE THE CIT(A) AFRESH. 7. THE LD. AUTHORIZED REPRESENTATIVE (AR) FOR THE A SSESSEE SHRI S.N. DOSHI, ON THE OTHER HAND, ADVERTED OUR ATTENTION TO THE RECONCILIATION STATEMENT ANNEXED IN THE PAPER BOOK EXPLAINING THE GROSS RECE IPTS SHOWN IN 26AS WHEREIN CERTAIN AMOUNT PERTAINS TO DEN MANORANJAN S ATELLITE PVT. LTD.. THE LD. AR SUBMITTED THAT ONCE THE RECONCILIATION IS TA KEN INTO ACCOUNT, THE ASSESSEE HAS CORRECTLY REFLECTED THE TAXABLE INCOME RELATABLE TO THE ASSESSEE. THE LD. AR NEXT SUBMITTED THAT THE ASSESSEE IS IN T HE BUSINESS SINCE SEVERAL NUMBER OF YEARS. ON 01 ST MARCH, 2008, M/S DEN MANORANJAN SATELLITE PVT. LTD. TOOK OVER THE ASSESSEES BUSINESS RELATING TO CABLE OPERATING ACTIVITIES. THE ASSESSEE AND THE SAID COMPANY ENTERED INTO JOIN T VENTURE ON 27 TH DECEMBER 2007. ALL THE CUSTOMERS WHO WERE PREVIOUSLY DEALIN G WITH THE ASSESSEE HAVE DEDUCTED THE TAX AT SOURCE ON THE AMOUNTS/PAYMENTS ERRONEOUSLY MADE IN THE NAME OF THE ASSESSEE, BEING UNAWARE OF THE FACT THA T THE RELEVANT ACTIVITIES STOOD TRANSFERRED TO DEN MANORANJAN SATELLITE PVT. LTD. IN WHICH THE ASSESSEE INTERESTED IN THE ONE OF THE MEMBERS OF JOINT VENTU RE. SINCE THE TDS HAS BEEN DEDUCTED IN THE NAME OF THE ASSESSEE, THE AFORESAID CREDIT HAS BEEN CLAIMED BY THE ASSESSEE AS THE OTHER PARTY IS NOT ENTITLED UND ER LAW TO CLAIM FOR SUCH CREDIT. THE ASSESSEE HAS GIVEN CREDIT DUE TO THE SAID COMPA NY AND THE GROSS AMOUNT DUE WAS PAID AND ADJUSTED IN THE COURSE OF BUSINESS . HE, THEREFORE, SUBMITTED THAT THE IMPUGNED RECEIPT OF RS.2.13 CRORE (SUPRA) HAS ALREADY BEEN SUBJECTED TO TAXATION IN THE APPROPRIATE HANDS. THE ACTION O F THE ASSESSING OFFICER HAS BEEN THEREFORE RIGHTLY REVERSED BY THE CIT(A), SINC E THIS WOULD LEAD TO DOUBLE TAXATION ON THE SAME INCOME. 8. ON CAREFULLY CONSIDERATION OF THE FACTS AND CIRC UMSTANCES OF THE CASE, WE FIND AT THE OUTSET THAT ONCE THE INCOME HAS BEEN AC COUNTED FOR IN THE HANDS OF THE JOINT VENTURE COMPANY NAMELY DEN MANORANJAN SAT ELLITE PVT. LTD. AND 4 ITA NO.1060/PN/2013 ASSESSED AS SUCH, THE SAME INCOME CANNOT BE TAXED I N THE HANDS OF THE ASSESSEE AGAIN MERELY BECAUSE OF CERTAIN DIFFERENCES APPEARI NG IN BOOKS QUA 26AS STATEMENT. THE ASSESSEE HAS SOUGHT TO DEMONSTRATE THAT THE INCOME HAS BEEN DULY ACCOUNTED FOR AND TAXED IN THE HANDS OF THE JO INT VENTURE COMPANY. WE APPRECIATE THAT THE ASSESSEE CANNOT BE CALLED UPON TO PAY TAXES ON THE SAME RECEIPT IN ITS HANDS BELONGING TO THIRD PARTY. HOW EVER, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER IS ENTITLED TO VERIFY THE COR RECTNESS OF THE RECONCILIATION STATEMENT AND ALSO ENTITLED TO VERIFY WHETHER THE R ECEIPT AS REFLECTED IN THE 26AS STATEMENT HAS BEEN DECLARED BY THE OTHER PARTY IN ITS RETURN. ACCORDINGLY, WE CONSIDER IT EXPEDIENT TO REMIT THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GRANT RELIEF TOWARDS RECEIPTS APPROPRIATED TO THIRD PARTY AFTER FRESH VERIFICATION ON FACTS IN ACCORDANCE WITH LAW. THE ASSESSING OFFICER MAY VERIFY THE RECONCILIATION STA TEMENT AND ANY OTHER DOCUMENTS AS MAY BE RELIED UPON BY THE ASSESSEE IN THIS REGARD AND PASS AN APPROPRIATE ORDER IN TERMS OF THE OBSERVATIONS MADE ABOVE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 03 RD DAY OF JUNE, 2016. SD/- SD/- ( VIKAS AWASTHY ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER PUNE ; DATED : 03 RD JUNE, 2016. & ' () *+( / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-V, PUNE; 4) THE CIT-V, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. &, / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE