M/s. Alang Ship Breaking Corporation, Bhavnagar V. The Income Tax Officer, TDS-4, Ahmedabad

ITA 1134/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5913 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 05-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADITYA SHUKLA
• Assessee Lawyers: ADITI SHETH

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ ITA.NO.1134/AHD/2015 / ASSTT. YEAR: 2006-07 M/S.ALANG SHIP BREAKING CORPORATION 203-B, 2 ND FLOOR LEELAEFFCEE WAGHAWADI ROAD BHAVNAGAR 364 001. PAN : AADFA 4339 D VS. ITO, TDS - 4 AHMEDABAD. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : ADITI SHETH, AR REVENUE BY : SHRI ADITYA SHUKLA, SR.DR / DATE OF HEARING : 22/12/2017 / DATE OF PRONOUNCEMENT: 19 /03/2018 +,/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-4, AHMEDABAD DATED 13.2.2015 PASSED FOR THE ASSTT.YEAR 2006-07. 2. THOUGH THE ASSESSEE HAS TAKEN EIGHT GROUNDS OF A PPEAL, BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE WHEREBY IT HAS PLEADED THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING DEMAND OF RS.53,0 42/- UNDER SECTION 206(C)(1) AND RS.50,920/- UNDER SECTION 206(C)(7) OF THE INCOME TAX ACT, 1961. ITA NO.1134 /AHD/2015 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-FI RM AT THE RELEVANT TIME WAS ENGAGED IN THE BUSINESS OF SHIP BREAKING. AFTER DI SMANTLING THE SHIP IT USED TO SALE SCRAP AND OTHER ITEMS GENERATED OUT OF THE SHI P. ACCORDING TO THE AO, THE ASSESSEE WAS REQUIRED TO COLLECT TCS AT THE RATE OF 1% AND DEPOSIT THE SAME IN THE GOVERNMENT ACCOUNT BEFORE DUE DATE AS PER SECTI ON 206C OF THE ACT. THE LD.AO HAS CONFRONTED THE ASSESSEE TO DEMONSTRATE HO W IT HAS COLLECTED TAXES ON SALE OF SCRAP. IN RESPONSE TO THE QUERY OF THE AO, THE ASSESSEE HAS SUBMITTED A LETTER WHICH WAS RECEIVED BY THE AO ON 7.1.2013. IT CONTAINED AS UNDER: 'WE ENCLOSE PHOTOCOPY OF FOLLOWING DOCUMENTS FOR TH E PERIOD OF F. Y. 2005-06 RELEVANT TO THE A. Y. 2006-07 FOR YOUR PERU SAL AND VERIFICATION. [1] FORM NO.27E FOR THE PERIOD FROM 01/04/2005 TO 30/09/2005. [2] FORM NO. 27E FOR THE PERIOD FROM 01/10/200 5 TO 31/03/2006, [3] LEDGER COPY OF TCS ACCOUNT [4] CHALLAN STATUS REPORT OBTAINED FROM NSDL SI TE SHOWING DEPOSIT OF TCS DEPOSITED DURING THE PERIOD OFFY 2005-06 RELEVA NT TO THE A Y 2006- 07. [5] PHOTOCOPY OF FORM NO.27C [IN FIVE CASES] I N WHOSE CASE NO TAX HAS BEEN COLLECTED AT SOURCE. [6] PHOTOCOPY OF CERTIFICATE IN THREE CASES WH ERE TAX HAS BEEN COLLECTED AT LOWER RATE ON THE BASIS OF CERTIFICATE ISSUED BY THE APPROPRIATE AUTHORITY OF INCOME TAX DEPARTMENT.' 4. THEREAFTER THE ASSESSEE HAS SUBMITTED AUDIT REPO RT IN FORM NO.3CB AND 3CD AND OTHER DETAILS. THE LD.AO DID NOT ACCEPT CO NTENTION OF THE ASSESSEE. HE OBSERVED THAT ON SALE VALUE OF RS.50,73,371/- TH E ASSESSEE HAS NOT COLLECTED TCS AND THEREFORE COMMITTED DEFAULT. HE WORKED OUT SHORT COLLECTION OF TCS AT RS.53,042/- AND CALCULATED INT EREST OF SUCH DEFAULT FOR A PERIOD OF 96 MONTHS AT RS.50,920/-. APPEAL TO THE LD.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 5. THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT T HE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF THE ITAT IN THE CASE OF HONEY SHIP BRAKING PVT. LTD. VS. ITO, IN ITA NO.981 & 982/AHD/2015. ON ITA NO.1134 /AHD/2015 3 THE STRENGTH OF THIS ORDER, SHE CONTENDED THAT THE HONBLE GUJARAT HIGH COURT IN THE CASE OF SIYARAM METAL UDYOG P.LTD. IN TAX AP PEAL NOS.519 TO 526 OF 2016 HAS OBSERVED THAT THERE IS NO TIME LIMIT IS PR OVIDED IN SECTION 206C(1) TO MAKE A DECLARATION IN FORM NO.27C COLLECTED FROM BU YER ON ACCOUNT OF MINOR DELAY IN FURNISHING SUCH FORM, THE ASSESSEE CANNOT BE HELD LIABLE FOR NON- COLLECTION OF TDS. ON THE OTHER HAND, THE LD.DR RE LIED UPON ORDERS OF THE REVENUE AUTHORITIES. 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. ACCORDING TO THE ASSESSEE SECTION 206 C ONTEMPLATES THAT IF PURCHASER OF SCRAP WOULD UTILIZE SUCH SCRAP FOR MAN UFACTURE OF ANY ARTICLE AND SUBMIT A DECLARATION IN THIS REGARD IN FORM NO.27C THEN THE ASSESSEE WOULD NOT BE REQUIRED TO DEDUCT TCS ON SUCH SALE OF SCRAP. T HE AO DID NOT DISPUTE THIS PROPOSITION. HIS CASE IS THAT THE ASSESSEE DID NOT SUBMIT FORM NO.27C IN TIME, AND FURTHER THEY ARE INCONSISTENCIES IN THE DETAILS OF SUCH FORMS. WE HAVE PERUSED FINDING OF THE AO RECORDED IN PARA 8 OF THE ASSESSMENT ORDER AND VERIFIED THAT THE DETAILS SUBMITTED IN PAPER BOOK. ON PAGE NO.43 OF THE PAPER BOOK, THE ASSESSEE HAS PLACED ON RECORD LEDGER COPY OF TCS ACCOUNT. IT CONTAINED DETAILS OF SALE OF SCRAP FROM 1.4.2005 TO 31.3.2006. IT IS BEING MAINTAINED IN A SYSTEMATIC MANNER WHERE FORMS HAVE BEEN SUBMITTED, BUT ASSESSEE DID NOT COLLECT TAXES. OTHERWISE DETAILS OF ALL TAXES COLLECTED BY THE ASSESSEE ARE BEING MENTIONED IN THIS LEDGER. THE A SSESSEE HAS ALSO PLACED ON RECORD COPY OF FORM NO.27C COLLECTED FROM THE PURCH ASER OF SCRAP. IF THE AO HAS ANY DOUBT ABOUT DETAILS, HE COULD CROSS-VERIFY IT FROM ULTIMATE PURCHASER. BY MERELY POINTING OUT CERTAIN PERIPHERAL DEFECTS I N THE SERIAL NUMBER OR FONT TYPE ETC. HE CANNOT REJECT THE CONTENTION OF THE AS SESSEE. COPY OF ALL FORMS WERE SUBMITTED TO THE AO DURING THE PROCEEDINGS UND ERTAKEN UNDER SECTION 206C(1) BY THE LD.AO. IN OUR OPINION, THE LD.AO IN STEAD OF VERIFYING DETAILS AND POINTING OUT ANY SUBSTANTIAL DEFECT, JUST HAD A CURSORY LOOK AND REJECTED ITA NO.1134 /AHD/2015 4 CONTENTIONS OF THE ASSESSEE, WHICH IS NOT PERMISSIB LE IN LAW. THEREFORE, AFTER GOING THROUGH ALL DETAILS, WE ARE SATISFIED THAT TH E ASSESSEE HAS COLLECTED FORM NO.27C. THESE FORMS WERE SUBMITTED TO THE CONCERNE D AUTHORITIES, MORE SO, THESE ARE AGAIN SUBMITTED IN THE PROCEEDINGS UNDER SECTION 206(1) AND HAD THE AO ANY DOUBT HE COULD VERIFY THE DETAILS FROM ULTIM ATE PURCHASERS. HE DID NOT CARRIED OUT THIS EXERCISE. THEREFORE, WE ALLOW THE APPEAL OF THE ASSESSEE AND DELETE THE DEMAND RAISED BY THE AO, WHICH HAS B EEN CONFIRMED BY THE LD.CIT(A). 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 19 TH MARCH, 2018 AT AHMEDABAD. SD/- SD/- ( PRADIP KUMAR KEDIA ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER