M/s. Labhchand Umeshchand, Kolkata V. I.T.O Wd - 56(2),kolkata, Kolkata

ITA 1558/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99654 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 27-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA PRASAD J
• Assessee Lawyers: K K CHHAPARIA
• Section: 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.1558/KOL/2013 ASSESSMENT YEAR:2008-09 M/S LABHCHAND UMESHCHAND 24, PRAFULLA SARKAR STREET, GROUND FLOOR, KOLKATA 700 072 [ PAN NO. AAAFL 9862 H ] / V/S . INCOME TAX OFFICER, WARD-56(2), 3, GOVERNMENT PLACE (WEST), KOLKATA /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI K.K. CHHAPARIA, FCA /BY RESPONDENT SHRI RAJENDRA PRASAD, JCIT-DR /DATE OF HEARING 14-07-2015 /DATE OF PRONOUNCEMENT 07-08-2015 /O R D E R THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-XXXVI, KOLKATA IN APPEAL NO.180/CIT(A )-XXXVI/KOL/10-11/93 DATED 08.04.2013. ASSESSMENT WAS FRAMED BY ITO WARD -56(2), KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S THE ACT) VIDE HIS ORDER DATED 23-09-2010 FOR ASSESSMENT YEAR 2008-09. 2. FIRST GROUND IN THIS APPEAL OF ASSESSEE IS AGAINST THE ORDER OF LD. CIT(A) IN CONFIRMING THE ADDITION MADE BY ASSESSING OFFICER I N REGARD TO DISALLOWANCE OF A SUM OF RS.26,071/- BEING 20% OF RECONDITIONING EXPENSES OF RS.1,30,335/-. AT THE TIME OF HEARING LD. COUNSEL FOR THE ASSESSED HAS NOT PRESSE D THIS GROUND. THEREFORE, THIS GROUND IS BEING DISMISSED AS NOT PRESSED. ITA NO.1558/KOL/2013 A.Y. 2008-09 M/S LABHCHAND UMESHCHAND V. ITO WD-56(2) KOL. PAGE 2 3. SECOND ISSUE IN THIS APPEAL OF ASSESSEE IS AGAINST THE ORDER OF LD. CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS.3,19,990/- U/S 40 (A)(IA) OF THE ACT MADE BY AO FOR NON PRODUCING ANY EVIDENCE OF FILING FORM 15G/15H T O THE DEPARTMENT. BRIEFLY STATED FACTS ARE THAT DURING THE YEAR UNDER APPEAL, ASSESS EE DEBITED INTEREST OF RS.11,21,108/- TO ITS PROFIT AND LOSS ACCOUNT IN REGARD TO INTERES T PAID ON LOAN TAKEN BY THE ASSESSEE OUT OF RS.11,21,108/- INTEREST OF RS.3,19,900/- WAS PAID TO 12 LOAN CREDITORS AND INTEREST TO EACH LOAN CREDITOR WAS MORE THAN RS.5,0 00/- DURING THE YEAR. AS SUCH, INCOME TAX WAS REQUIRED TO BE DEDUCTED AT SOURCE. H OWEVER, IN CASE, THE PAYEE I.E. LOAN CREDITORS HAD SUBMITTED FORM 15G/15H TO THE PR AYER OF INTEREST I.E., ASSESSEES TAX WAS NOT REQUIRED TO BE DEDUCTED AT SOURCE. DURI NG THE ASSESSMENT PROCEEDINGS, AS THE EVIDENCE OF FILING FORM 15G/15H TO THE DEPARTME NT WAS NOT PROVIDED TO THE AO, HE PROCEEDED TO DISALLOW THE INTEREST PAYMENT OF RS .3,19,900/- U/S 40(A)(IA) OF THE ACT. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE LD. CIT(A) WHO ALSO CONFIRMED THE ADDITION MADE BY AO WITH HIS FOLLOWING FINDING:- 3D GROUND NO.4- THIS GROUND IS REGARDING DISALLOWA NCE OF INTEREST OF RS.319900/- U/S 40(A)(IA) FOR NON DEDUCTION OF TDS. IN HIS SUBMISSION APPELLANT RELIED ON THE JUDGMENT OF SPECIAL BENCH O F ITAT, VIZAG IN CASES OF MERILYN SHIPPING & TRANSPORT VS. ACIT, RANGE-1, VIZAG REPORTED IN 138 ITD 23, AS NOTHING IS PAYABLE AND TOTAL INTERES T HAS BEEN PAID. HOWEVER, OPERATION OF JUDGEMENT QUOTED BY APPELLANT , HAS BEEN SUSPENDED BY HONBLE HC OF AP. HENCE JUDGMENT OF HO NBLE ITAT IS NOT APPLICABLE UNDER THE CIRCUMSTANCES. HENCE ADDITION MADE BY AO OF RS.319900/- UNDER SECTION 40(A)(IA) IS SUSTAINED. AGGRIEVED, NOW ASSESSEE CAME IN SECOND APPEAL BEFOR E THE TRIBUNAL. 4. LD. COUNSEL FOR ASSESSEE IN HIS PAPER BOOK HAVE SUBMITTED COPIES OF FORM 15G OF 12 LOAN CREDITORS AND ALL THESE 12 FORM 15G HAVE CONTAINED FULL DETAILS OF THE PAYEES INCLUDING THEIR NAMES, ADDRES S, PAN, DETAIL OF LOAN GIVEN, RATE OF INTEREST, ASSESSMENT YEAR FOR WHICH DECLARA TIONS HAVE BEEN SUBMITTED AND DULY SIGNED AND VERIFIED BY THE PAYEES. SECTION 194 A PROVIDES FOR DEDUCTION OF TDS INTEREST PAID BY THE ASSESSEE AT THE APPROPRIAT E RATE AND SEC. 197A PROVIDES THAT NOTWITHSTANDING ANYTHING CONTAINED IN SEC. 194 A NO DEDUCTION SHALL BE ITA NO.1558/KOL/2013 A.Y. 2008-09 M/S LABHCHAND UMESHCHAND V. ITO WD-56(2) KOL. PAGE 3 MADE UNDER THIS SECTION IF THE PAYEE OF THE INTERES T FURNISH TO THE PERSON RESPONSIBLE FOR PAYING THE INTEREST, A DECLARATION IN WRITING IN DUPLICATE IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANN ER TO THE EFFECT THAT THE TAX ON HIS ESTIMATED TOTAL INCOME OF THE PREVIOUS YEAR IN WHICH THE INTEREST IS TO BE INCLUDED WILL BE NIL. SUB-SECTION (2) PROVIDES THAT THE PERSON RESPONSIBLE FOR PAYING INTEREST SHALL DELIVER OR CAUSE TO BE DELIVE RED TO THE CCIT OR CIT ONE COPY OF THE DECLARATION SUBMITTED BY THE PAYEE OF T HE INTEREST TO THE ASSESSEE ON OR BEFORE THE SEVENTH DAY OF THE MONTH NEXT FOLLOWI NG THE MONTH IN WHICH THE DECLARATION WAS FURNISHED TO HIM. IF THE PERSON RES PONSIBLE FOR PAYING THE INTEREST (I.E. THE ASSESSEE) DOES NOT COMPLY WITH S UB-SECTION 2 OF SEC. 197A OF THE ACT, HE IS LIABLE TO PAY PENALTY OF RS.100/- FO R EVERY DAY DURING WHICH THE FAILURE CONTINUES. SUCH PENALTY CAN BE IMPOSED ONLY BY THE COMMISSIONER OR CHIEF COMMISSIONER OF INC TAX AS STATED IN CLAUSE ( B) OF SUB-SECTION 3 OF SEC. 272A IN SUB-SECTION 3 OF SEC. 272A OF THE ACT AND I N SUB-SECTION 4 REQUIRES THAT AN OPPORTUNITY SHALL BE GIVEN TO THE ASSESSEE BEFOR E ANY PENALTY ORDER IS PASSED. 5. THE SUB-SECTION 1A OF SEC. 197A OF THE ACT MEREL Y REQUIRES A DECLARATION TO BE FILED BY THE PAYEE OF THE INTEREST AND ONCE I T IS FILED THE PAYER OF THE INTEREST HAS NO CHOICE EXCEPT TO DECEASED FROM DEDU CTING TAX FROM INTEREST. THE SUB-SECTION USES THE WORD SHALL WHICH LEAVES NO CHOICE TO THE ASSESSEE IN THE MATTER. THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF MUMBAI BENCH F BENCH I N THE CASE OF VIPIN P. MEHTA V. ITO IN ITA NO.3317/MUM/2010 DATED 20-05-2011. IN THE P RESENT, ASSESSEE HAS DULY RECEIVED FORM 15G FROM ALL THE 12 PARTIES AND ALSO PROVIDED DETAILS OF NAME, PAN, JURISDICTION OF THE PAYEE AND THE AMOUNT OF INTEREST PAID TOTALING TO RS.3,19,900/-. THE E-TDS QUARTERLY RETU RN OF FORM 26Q FOR QUARTERLY FOURTH OF FINANCIAL YEAR 2007-08 WAS DULY FILED BY THE ASSESSEE ON 16-06-2008, WHICH WAS INCORPORATED WITH DETAILS OF ALL THE DEDU CTEES TO WHOM PAYMENT OF INTEREST WERE MADE AMOUNTING TO RS.5,000/- IN A YEA R. HERE, I LIKE TO REFER AS PER ITA NO.1558/KOL/2013 A.Y. 2008-09 M/S LABHCHAND UMESHCHAND V. ITO WD-56(2) KOL. PAGE 4 THE FORMAT PRESCRIBED IN INCOME TAX RULES, IN REGAR D TO QUARTERLY STATEMENT OF DEDUCTION OF TAX U/S 200(3) OF THE ACT, FORM 26Q HA S TO BE FILED ON-LINE/IN SOFT COPY IN RESPECT OF PAYMENT OTHER THAN SALARY FOR EA CH QUARTER. IN THIS FORM 26Q DETAILS OF PARTIES TO WHOM, INTEREST HAS BEEN PAID FOR MORE THAN RS.5,000/- AND INCOME TAX IS DEDUCTED AT SOURCE, DETAILS OF PAYEES ALONG WITH THE DETAILS OF CHALLAN THROUGH WHICH TAX DEDUCTED HAS BEEN DEPOSIT ED IS INCORPORATED. IN FORM 26Q DEDUCTEEWISE DETAIL IS ALSO BE PROVIDED WHERE T HE DECLARATION IN SECTION 197(1A) OF THE ACT IS PROVIDED BY THE PAYEES TO THE DEDUCTOR OR BY THE DEDUCTEES. ON EXAMINATION OF THE PROVISION OF RECEI PT OF THE TDS RETURN FILED ON FORM 26Q A NUMBER OF DEDUCTEES RECORDS ARE 39 AND T OTAL AMOUNT PAID IS AT RS.10,98,898/- AND TDS DEDUCTED AND DEPOSITED IS AT RS.80,237/- OUT OF 39 DEDUCTEEES RECORD, 27 DEDUCTEES ARE THOSE TO WHOM I NTEREST HAS BEEN PAID AFTER DEDUCTION OF TAX AT SOURCE AND 12 ARE THE DEDUCTEES FROM WHOM DECLARATION OF FROM 15G/15H HAVE BEEN RECEIVED BY THE ASSESSEE BEF ORE CLOSING OF FINANCIAL YEAR I.E. ON 31 ST MARCH, 2008. HOWEVER, ASSESSEE WAS FURTHER REQUIRE D TO SUBMIT THE PHYSICAL COPIES OF FORM 15G/15H TO THE CCIT OR CIT WITHIN SEVEN DAYS OF THE NEXT MONTH, FROM THE MONTH IN WHICH THE DECLARA TION WAS RECEIVED. LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED IN HIS GROUN D THAT ASSESSEE WAS UNDER BONA FIDE BELIEF THAT THE DEPARTMENT DOES NOT ACCEPT THE DOC UMENTS PHYSICALLY IN REGARD TO DETAILS OF TAX DEDUCTED AT SOURCE, AS THE COMPLETE DETAILS HAD ALREADY BEEN FILED IN E-TDS STATEMENT FILED BY THE ASSESSEE ON 16.06.2008. THERE HAS BEEN NO OBJECTION BY AUTHORITIES BELOW IN REGARD TO THE DETAILS PROVIDED IN FORM 26Q E-FILE BY THE ASSESSEE WHICH WAS CONTAININ G ALL DETAILS, WHICH MEANS THAT ASSESSEE WAS HAVING THE DECLARATION FORMS 15G/ 15H FROM ALL THE 12 PARTIES AT THE TIME OF PAYEE/CREDITOR AND INTEREST IN THE A CCOUNT OF THE PAYEES AND AS SUCH, WAS NOT REQUIRED TO DEDUCT TDS ON THE PAYMENT OF INTEREST OF RS.3,19,908/-. HOWEVER, THERE IS A DEFAULT ON THE P ART OF THE ASSESSEE U/S 197A(2) OF THE ACT FOR NOT FURNISHING PHYSICALLY CO PIES OF DECLARATION BEFORE ITA NO.1558/KOL/2013 A.Y. 2008-09 M/S LABHCHAND UMESHCHAND V. ITO WD-56(2) KOL. PAGE 5 CCIT OR CIT FOR THIS NON SUBMISSION, PENALTY IS PRE SCRIBED IN SECTION 272A OF THE ACT. 6. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. I FIND THAT AS THE ASSES SEE HAS DULY RECEIVED DECLARATION ON FORM 15G/15H AT THE TIME OF PAYMENT/ CREDIT TO THE ACCOUNT OF PAYEES HE WAS NOT REQUIRED TO DEDUCT TDS ON THIS PA YMENT. ALSO THE ASSESSEE HAS GIVEN THE DETAILS OF DEDUCTEES FROM WHOM FROMS 15G/15H HAVE BEEN RECEIVED, IN E-STATEMENT OF TDS FILED BY HIM. IT WA S A REASONABLE REASON DUE TO WHICH ASSESSEE DID NOT FILE PHYSICAL COPY OF DECLA RATION FORM 15G BEFORE CCIT OR CIT. THEREFORE, I DELETE THE ADDITION MADE BY AO WHICH SUSTAINED BY LD. CIT(A) OF INTEREST PAYMENT OF RS.3,19,900/- U/S 40( A)(IA) OF THE ACT. THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 7. THIRD GROUND OF ASSESSEES APPEAL IS AGAINST THE ORDER OF LD. CI T(A) FOR CONFIRMING THE ACTION OF AO FOR NOT ALLOWING CREDIT FOR RS.33,620/- ON ACCOUNT OF TAX COLLECTED AT SOURCE. BRIEF FACTS IN REGARD T O THIS GROUND OF ASSESSEES APPEAL IS THAT AFTER COMPLETION OF ASSESSMENT PROCE EDINGS U/S. 143(3) OF THE ACT WHILE COMPUTATION OF TAX LIABILITY OF THE ASSESSEE, AO HAS NOT GIVEN CREDIT OF TAX COLLECTED AT SOURCE OF RS.33,620/-. THIS MATTER WAS NOT ADJUDICATED BY LD. CIT(A) AND HE CONFIRMED THE ACTION OF AO. AGGRIEVED , NOW ASSESSEE IS IN APPEAL BEFORE TRIBUNAL. 8. LD. DR SUPPORTED THE ORDERS OF AUTHORITIES BELOW . 9. I HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. BEFORE ME, LD. COUNSEL F OR ASSESSEE HAS PROVIDED STATEMENT OF TCS FOR THE RELEVANT ASSESSMENT YEAR, THE NAME OF DEDUCTEE/DEDUCTOR, TAN NO. OF DEDUCTOR ALONG WITH A MOUNT OF TES. AS THE ITA NO.1558/KOL/2013 A.Y. 2008-09 M/S LABHCHAND UMESHCHAND V. ITO WD-56(2) KOL. PAGE 6 ASSESSEE IS POSSESSING THE CERTIFICATE OF TES, I DE EM IT FIT TO RESTORE THIS ISSUE TO THE FILE OF AO TO ADJUDICATE THE SAME IN THE LIGHT OF EVIDENCES PRODUCED BY THE ASSESSEE. I HEREBY DIRECT THE AO TO VERIFY THE DETA ILS OF TES ALONG WITH THE CERTIFICATE OF TES RECEIVED BY THE ASSESSEE FROM TH E DEDUCTOR AND ALLOW THE CREDIT AS AVAILABLE TO THE ASSESSEE ON THE BASIS OF THESE EVIDENCES. THIS GROUND OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PUR POSES. 10. IN THE RESULT, APPEAL FILED BY ASSESSEE IS PARTLY A LLOWED. ORDER PRONOUNCED IN OPEN COURT ON 07/08/2015 SD/- (MAHAVIR SINGH) JUDICIAL MEMBE R KOLKATA, *DKP - 07/08/2015 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- M/S LABHCHAND UMESHCHAND, 24, PRAFULL A SARKAR STREET, GROUND FLOOR, KOLKATA-72 2. / RESPONDENT- ITO WARD-56(2) 3, GOVT. PLACE(W), KO LKATA-72 3. ' % / CONCERNED CIT KOLKATA 4. % - / CIT (A) KOLKATA 5. & ))' , ' / DR, ITAT, KOLKATA 6. + / GUARD FILE. BY ORD ER/ , / ',