SHRI A.G.SHETTY, Chandrapur V. A.C.I.T. , CHANDRAPUR CIRCLE, Chandrapur

ITA 152/NAG/2017

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 3977 (ITAT-NAGPUR)
• Duration Of Justice: 5 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 19-04-2017
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Business income; TDS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, NAGPUR (AT e-Court, PUNE) BEFORE SHRI R.S. SYAL, VICE PRESIDENT आयकर अपील सं. /ITA No.152/NAG/2017 नधा रण वष / Assessment Year : 2007-08 A.G. Shetty, Prop. Darshan & Co., C/o. Ultra Tech Cement Ltd., PO Awarpur, Tal. Korpana, Dist. Chandrapur 442917 Maharashtra PAN :AHFPS7393L Vs. ACIT, Chandrapur Circle, Chandrapur Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP: This appeal by the assessee arises out of the order passed by the Commissioner of Income-tax (Appeals)-II, Nagpur on 28-06-2013 in relation to the assessment year 2007-08. 2. The only issue raised in this appeal is against not allowing credit for the TDS amounting to Rs.10,72,669/-. Assessee by Shri Abhay Agrawal Revenue by Shri G.J. Ninawe Date of hearing 22-09-2022 Date of pronouncement 23-09-2022 ITA No. 152/NAG/2017 A.G. Shetty 2 3. Briefly stated, the facts of the case are that the assessee derived income from the business of supply of loading labour on contract basis to Ultra Tech Ltd. (sic L & T Limited). The company, inter alia, created a provision for payment to the assessee for a sum of Rs.4,76,74,168/- on which tax amounting to Rs.10,72,669/- was deducted at source. The assessee claimed credit for such TDS without offering the receipt to tax. On being called upon to explain as to why the corresponding income was not offered for taxation, the assessee submitted that the sum of Rs.4.76 core was as estimated provision created by Ultra Tech Cement Ltd. to be settled in the succeeding year. The AO refused to allow credit for the TDS of Rs.10,72,669/- on the ground that the corresponding income was not offered for taxation. The ld. CIT(A) countenanced the view point of the AO, which led the assessee to approach the Tribunal. 4. Having heard the rival submissions and perused the relevant material on record, it is seen that the assessee admittedly claimed credit for TDS of Rs.10.72 lakh on the corresponding provision for receipt of Rs.4.76 crore, which was not offered for taxation. The claim of the assessee before the Tribunal is that the provision for ITA No. 152/NAG/2017 A.G. Shetty 3 receipt of Rs.4.76 crore does not represent any income as it was only a provision towards reimbursement of certain expenses by Ultra Tech Ltd., such as, Leave wages, Holiday wages, Medical expenses. In support of such a contention, the ld. AR relied on page 8, being, the certificate issued by Ultra Tech Cement Ltd, (undated) certifying that the amount reimbursed to the assessee towards leave wages, holiday wages, medical expenses etc., does not involve any profit element. This certificate does not refer to any specific amounts and is a general assertion. The ld. AR relied on page 25 of the paper book, which is a three-paged Reconciliation statement of gross receipts shown in the Profit and loss account and TDS certificates for the year 2006-07. He referred to the last four items dated 31-03-2007 totalling to Rs.4.76 crore as the amounts for which Ultra Tech Cement Ltd. estimated a provision on which tax of Rs.10.72 lakh was deducted at source. On going through the break-up of such amount of Rs.4.76 crore, it is seen that it comprises of four items, namely, Gratuity settlement of Rs.3.48 crore; LTA Advance of Rs.32,10,000/-; Bonus/ex-gratia reimbursement of Rs.88.72 lakh; and Bonus/ex-gratia reimbursement of Rs.7.69 lakh. Thus, it can be seen that there is ITA No. 152/NAG/2017 A.G. Shetty 4 complete mismatch between the assessee’s contention based on the Certificate issued by Ultra Tech Cement Ltd. by which the company certified that payment against Leave wages, Holiday wages and Medical expenses etc. were reimbursements vis-à-vis the assessee’s own reconciliation statement showing the amounts towards Gratuity settlement, LTA Advance and Bonus/ex-gratia reimbursement. The certificate of Ultra Tech Ltd. is general and does not refer to any particular amounts for the year under consideration. No letter from the Company has been placed on record indicating the true nature of the specific amount of Rs.4.76 crore. In contrast, it can be seen from para ii) on the penultimate page of the assessment order that the assessee contended before the AO that the receipt of Rs.4.76 crore did not accrue to the assessee during the relevant financial year and as such was not offered for taxation. This implies that the assessee contended before the AO that though it was a business receipt, but did not pertain to the year under consideration. Thus, it is vivid that there are different versions about the receipt of Rs.4.76 crore. When the nature of receipt itself is unclear as to its taxability or otherwise, the question of allowing credit for TDS on such an amount cannot be decided. ITA No. 152/NAG/2017 A.G. Shetty 5 Under such circumstances, I am satisfied that proper adjudication on this issue cannot be done unless complete factual scenario is looked into. Due to non-availability of the relevant evidence and conflict between the Certificate and the Reconciliation statement as discussed above on one hand and the assessee’s own contention before the AO on the other, I am of the considered opinion that it would be just and fair if the impugned order is set aside and the matter is restored to the file of the AO. I order accordingly and direct the AO to first examine the precise nature of the Rs.4.76 crore and then decide the issue afresh as per law after allowing reasonable opportunity of hearing to the assessee. 5. In the result, the appeal is allowed for statistical purposes. Order pronounced in the Open Court on 23 rd day of September, 2022 - Sd/- (R.S.SYAL) VICE PRESIDENT प ु णे Pune; दनांक Dated : 23 rd September, 2022 Satish ITA No. 152/NAG/2017 A.G. Shetty 6 आदेश क त ल प अ े षत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. यथ / The Respondent; 3. The CIT(A)-II, Nagpur 4. 5. The Pr.CIT-II, Nagpur िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, Nagpur / DR, Nagpur 6. गाड फाईल / Guard file आदेशान ु सार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 22-09-2022 Sr.PS 2. Draft placed before author 23-09-2022 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *