Value Labs LLP, Hyd (formerly Value Labs), Hyd, Hyderabad V. DCIT, Circle 8(1), Hyderabad, Hyderabad

ITA 1085/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2280 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 12-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J SIRI KUMAR
• Assessee Lawyers: P MURALI MOHANA RAO
• Keywords: Reopening of assessment; Reassessment proceedings
• Section: 143(3); 234B; 10B; 147; 154

Judgement Text

9IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1085/HYD/2016 ASSESSMENT YEAR: 2004-05) M/S VALUELABS LLP., (FORMERLY KNOWN AS VALUELABS), HYDERABAD. PAN AAKFV2276K VS. DCIT, CIRCLE 8(1), HYDERABAD. (APPLICANT) (RESPONDENT) ASSESSEE BY : SHRI P. MURALI MOHANA RAO REVENUE BY : SHRI J. SIRI KUMAR DATE OF HEARING : 17-11-2017 DATE OF PRONOUNCEMENT : 13-12-2017 ORDER PER P. MADHAVI DEVI, J.M.: IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN CONFIRMING THE ORDER PASSED BY A.O U/S 154 OF THE ACT, DATED 31-07-2006. 2. BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR THE A.Y 2004-05 ON 31-10-04, WHEREIN AMONGST OTHER ITEMS, TAX CREDIT FOR WITHHOLDING OF TAXES BY A MALAYSIAN COMPANY WAS CLAIMED AT RS. 39,42,389/-. WHILE PROCESSING THE RETURN OF INCOME U/S 143(1) OF THE ACT, THE A.O DID NOT GIVE CREDIT FOR THE TAXES 2 ITA .NO.1085/HYD/2016, VALUELABS LLP., HYDERABAD. WITHHELD BY M/S MAXES MOBILE SDI PHD, MALAYSIA OF RS. 39,42,389/-. THE ASSESSEE FILED A PETITION U/S 154 OF THE IT ACT FOR SUCH CREDIT. ALONG WITH THE SAID PETITION, THE ASSESSEE FILED THE ORIGINAL WITHHOLDING TAX CERTIFICATES AND ALSO INDEMNITY BOND BEFORE THE A.O, FOR INDEMNIFICATION OF ANY LOSS, INCURRED BY GOVT., OF INDIA, IF WITHHOLDING OF TAX CREDIT IS GIVEN TO THE ASSESSEE. THE A.O, VIDE ORDERS DATED 31-07-2006, ALLOWED THE CLAIM OF WITHHOLDING OF TAXES OF RS. 39,42,389/- AFTER DUE VERIFICATION OF THE DOCUMENTS. 3. THEREAFTER, THE CASE WAS SELECTED FOR REASSESSMENT PROCEEDINGS U/S 147 OF THE ACT, FOR RESTRICTING THE CLAIM OF EXEMPTION U/S 10B OF THE ACT, AND WHILE CALCULATING THE TAXES PAYABLE, THE A.O OMITTED TO GIVE CREDIT FOR WITHHOLDING OF TAXES OF RS. 39,42,389/-. FURTHER, AN ORDER U/S 154 OF THE IT ACT WAS ALSO PASSED ON 31-07-2006 RECTIFYING THE ASSESSMENT ORDER U/S 143(3) R.W.S 147 OF THE ACT DATED 30-12-2011 RECTIFYING THE INTEREST U/S 234B OF THE ACT. AT THIS POINT OF TIME, THE ASSESSEE REQUESTED THE A.O TO GIVE CREDIT FOR WITHHOLDING OF TAXES. HOWEVER, THE A.O DID NOT ALLOW THE CREDIT FOR WITHHOLDING OF TAXES AS CLAIMED BY THE ASSESSEE. 3 ITA .NO.1085/HYD/2016, VALUELABS LLP., HYDERABAD. 4. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AGAINST THE ORDER PASSED BY THE A.O U/S 154 OF THE ACT, DATED 31-07-2006. THE CIT(A), DIRECTED THE A.O TO ALLOW THE CLAIM OF THE ASSESSEE AFTER VERIFYING THE ASSESSEES CLAIM IN RESPECT OF WITHHOLDING OF TAXES. AGAINST THIS DIRECTION OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE, WHILE REITERATING THE SUBMISSIONS MADE ABOVE, SUBMITTED THAT, THE ASSESSEE HAS ALREADY FILED THE RELEVANT DETAILS ALONG WITH THE ORIGINAL TAX WITHHOLDING CERTIFICATES BEFORE THE A.O DURING THE 154 PROCEEDINGS, AND THE A.O, AFTER VERIFYING THE SAID DOCUMENTS AND ON BEING SATISFIED ABOUT THE ALLOWBILITY, HAS GIVEN CREDIT FOR TAXES OF RS. 39,42,389/-. HE SUBMITTED THAT THE SUBSEQUENT REOPENING OF ASSESSMENT IS ON THE ISSUE OF EXEMPTION U/S 10A OF THE IT ACT, AND WHILE PASSING THE REASSESSMENT ORDER, A.O OUGHT TO HAVE GIVEN CREDIT FOR WITHHOLDING OF TAXES. HE SUBMITTED THAT, THE DIRECTION OF THE CIT(A) TO RE-VERIFY AND GIVE CREDIT FOR WITHHOLDING OF TAXES WILL CAUSE SEVERE HARDSHIP TO THE ASSESSEE, SINCE THE ASSESSEE HAS ALREADY FILED ALL THE DETAILS BEFORE THE A.O. HE SUBMITTED THAT, THE ORDER U/S 154 OF THE IT ACT GIVING CREDIT FOR WITHHOLDING OF TAXES EARLIER HAS NOT BEEN SET 4 ITA .NO.1085/HYD/2016, VALUELABS LLP., HYDERABAD. ASIDE BY ANY OF THE AUTHORITIES, AND THEREFORE, THE ORDER IS FINAL AND THE A.O, WHILE PASSING THE RE-ASSESSMENT ORDER IS SUPPOSED TO GIVE CREDIT FOR WITHHOLDING OF TAXES. HE THEREFORE, PRAYED THAT A.O MAY BE DIRECTED TO PASS THE ORDER IN ACCORDANCE WITH THE ORDER U/S 154 OF THE IT ACT DATED 31-07-2006. 6. THE LD. DR, HOWEVER, SUPPORTED THE ORDER OF THE CIT(A) APPEALS. 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL PLACED ON RECORD, WE FIND THAT THE ASSESSEES CLAIM OF WITHHOLDING OF TAXES WAS MADE IN THE ORIGINAL RETURN OF INCOME AND IN THE ORDER U/S 154 OF THE IT ACT, DATED 31- 07-2006, THE A.O HAS VERIFIED THE ORIGINAL DOCUMENTS FILED BY THE ASSESSEE AND AFTER BEING SATISFIED ABOUT THE ALLOWBILITY OF SAID CLAIM, HAS ALLOWED THE CREDIT. THE SUBSEQUENT REOPENING OF ASSESSMENT IS ON THE ISSUE OF DEDUCTION U/S 10A OF THE IT ACT AND 154 ORDER IS FOR RECALCULATION OF INTEREST U/S 234D OF THE ACT CONSEQUENT TO THE REASSESSMENT PROCEEDINGS. THE ISSUE OF WITHHOLDING OF TAXES WAS NEVER AN ISSUE IN ANY OF THE SUBSEQUENT PROCEEDINGS NOR HAS IT BEEN SET ASIDE BY ANY OF THE AUTHORITIES IN ANY OF THE PROCEEDINGS. THEREFORE, THE ORDER 5 ITA .NO.1085/HYD/2016, VALUELABS LLP., HYDERABAD. PASSED BY THE A.O U/S 154 DATED 31-07-2006 HAS ATTAINED FINALITY. THEREFORE, IN THE SUBSEQUENT ASSESSMENT PROCEEDINGS, WHILE COMPUTING THE TAXES PAYABLE BY THE ASSESSEE, THE A.O OUGHT TO HAVE GIVEN CREDIT FOR TAX WITHHELD BY THE MALAYSIAN COMPANY. THEREFORE, WE DIRECT THE A.O TO PASS THE CONSEQUENTIAL ORDER BY GIVING CREDIT TO THE TAXES WITHHELD BY THE MALAYSIAN COMPANY IN ACCORDANCE WITH THE ORDER U/S 154 OF THE ACT DATED 31-07- 2006. WE FIND THAT ALL THE GROUNDS OF THE APPEAL FILED ALONG WITH FORM-36 AND ALSO THE ADDITIONAL GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALL ON THE SAME ISSUE AND THEY ARE ALL ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 13 TH DECEMBER, 2017. SD/- SD/- (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 13 TH DECEMBER, 2017. 6 ITA .NO.1085/HYD/2016, VALUELABS LLP., HYDERABAD. KRK 1) M/S VALUELABS LLP., C/O P. MURALI & CO. CAS, 6-3- 655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 2) DCIT, CIRCLE-8(1), HYDERABAD. 3) CIT(A) -9, HYDERABAD 4) THE PCIT 2, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6) GUARD FILE.