ACIT 2(1)(2), MUMBAI V. EZEEGO ONE TRAVELS & TOURS LTD, MUMBAI

ITA 1175/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9745 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 20-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K BEPARI

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 1175 /MUM/ 2017 (ASSESSMENT YEAR 20 12 - 13 ) ACIT 2(1)(2) ROOM NO. 561, 5 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. VS. M/S. EZEEGO ONE TRAVELS & TOURS LTD. 1 ST FLOOR, CECIL COURT LANSDOWNE ROAD COLABA MUMBAI - 400039. ( APPELLANT ) ( RESPONDENT ) C.O. NO. 114/MUM/2017 (ASSESSMENT YEAR 2012 - 13) M/S. EZEEGO ONE TRAVELS & TOURS LTD. 1 ST FLOOR, CECIL COURT LANSDOWNE ROAD COLABA MUMBAI - 400039. VS. ACIT 2(1)(2) ROOM NO. 561, 5 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) PAN NO. AABCE5758R ASSESSEE BY SHRI RAJAN VORA DEPARTMENT BY SHRI S.K.BEPARI DATE OF HEARING 11.9. 201 7 DATE OF PRONOUNCEMENT 11 . 9 . 201 7 O R D E R THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 25.11.2016 PASSED BY LD CIT(A) - 3, MUMBAI AND THEY RELATE TO THE ASSESSMENT YEAR 2012 - 13. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN DELETING THE DISALLOWANCE MADE U/S 40(A)(IA) OF THE ACT. THE ASSESSEE IS SUPPORTING THE DECISION OF LD CIT(A) IN THE CROSS OBJECTION FILED BY IT. 2. I HEARD THE PARTIES AND PERUSED THE RECORD. THE AO NOTICED THAT THE ASSESSEE HAS INCURRED A SUM OF RS.38.59 LAKHS TOWARDS RENT AND REPAIRS AND M/S. EZEEGO ONE TRAVELS & TOURS LTD. 2 CLAIMED THE SAME AS DEDUCTION. THE ABOVE SAID PAYMENTS WERE MADE TO M/S COX & KINGS INDIA LTD (CKIL) AND THE ASSESSEE COMPANY BELONGS TO THE SAME GROUP. THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE FROM THE ABOVE SAID PAYMENTS AND HENCE THE AO ENQUIRED ABOUT THE DETAILS OF TAX DEDUCTED AT SOURCE THERE FROM. IT WAS SUBMITTED THAT THE ORIGINAL PAYMENTS WERE MADE BY M/S CKIL ON BEHALF OF THE ASSESSEE BY DULY DEDUCTING TAX AT SOURCE AND THE ASSESSEE HAS MERE LY REIMBURSED THE AMOUNTS TO M/S CKIL. ACCORDINGLY IT WAS SUBMITTED THAT THERE WAS NO REQUIREMENT OF DEDUCTING TAX AT SOURCE AGAIN AND ACCORDINGLY IT WAS SUBMITTED THAT THE PROVISIONS OF SEC. 40(A)(IA) WOULD NOT BE ATTRACTED. THE AO WAS NOT CONVINCED WITH THE SAID EXPLANATIONS AND ACCORDINGLY DISALLOWED THE ABOVE SAID AMOUNT OF RS.38.59 LAKHS U/S 40(A)(IA) OF THE ACT. THE LD CIT(A), HOWEVER, DELETED THE ADDITION BY OBSERVING THAT THE TAX IS NOT REQUIRED TO BE DEDUCTED ON REIMBURSEMENTS. AGGRIEVED, THE REV ENUE HAS FILED THIS APPEAL. 3. THE LD D.R SUBMITTED THAT THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE FROM THE PAYMENTS MADE TO M/S CKIL AND HENCE THE AO HAS RIGHTLY ADDED THE ABOVE SAID AMOUNT U/S 40(A)(IA) OF THE ACT. ON THE CONTRARY, THE LD A.R PL ACED RELIANCE ON THE DECISION RENDERED BY HONBLE BOMBAY HIGH COURT IN THE CASE OF THE CIT VS. OBC ENGINEERS (INCOME TAX LODGING NO.2026 OF 2012 DATED 07 - 03 - 2013) AND SUBMITTED THAT THERE IS NO REQUIREMENT TO DEDUCT TAX AT SOURCE FROM THE EXPENDITURE REIMB URSED BY THE ASSESSEE. 4. I NOTICE THAT M/S CKIL HAS INCURRED THE EXPENDITURE BY WAY OF RENT AND REPAIRS ON BEHALF OF THE ASSESSEE. THE LD CIT(A) HAS RECORDED A FINDING THAT M/S CKIL HAS DULY COMPLIED WITH TDS PROVISIONS AT THE TIME OF MAKING PAYMENT S TO THE CONCERNED PAYEES. THUS, IT IS NOTICED THAT THE PAYMENT BY WAY OF RENT AND REPAIRS HAVE BEEN DULY SUBJECTED TO DEDUCTION OF TAX AT SOURCE. THE ASSESSEE HAS REIMBURSED THE AMOUNT TO M/S CKIL ON WHICH TAX HAS ALREADY BEEN DEDUCTED AT SOURCE. SINCE THE IMPUGNED PAYMENTS HAVE BEEN MADE M/S CKIL ON BEHALF OF THE ASSESSEE AND THE TAX HAS BEEN DEDUCTED AT SOURCE THERE FROM BY M/S CKIL, IN MY VIEW, IT SHOULD BE CONSTRUED THAT M/S M/S. EZEEGO ONE TRAVELS & TOURS LTD. 3 CKIL HAS DEDUCTED TAX AT SOURCE ALSO ON BEHALF OF THE ASSESSEE. IN THIS VI EW OF THE MATTER, THE OBLIGATION OF THE ASSESSEE TO DEDUCT TAX AT SOURCE HAS BEEN FULFILLED BY M/S CKIL AND HENCE I AGREE WITH THE VIEW TAKEN BY LD CIT(A) THAT THE PROVISIONS OF SEC. 40(A)(IA) WOULD NOT GET ATTRACTED IN THIS FACTUAL MATRIX. ACCORDINGLY I UPHOLD THE DECISION TAKEN BY LD CIT(A) ON THE ABOVE SAID REASONING. 5. THE ASSESSEE HAS FILED THE CROSS OBJECTION ONLY TO SUPPORT THE ORDER PASSED BY LD CIT(A) AND HENCE THE SAME DOES NOT REQUIRE ANY ADJUDICATION. 6. IN THE RESULT, THE APPEAL OF T HE REVENUE AS WELL AS THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 11 . 9 . 201 7. SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 11 / 9 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS IT AT, MUMBAI