INDO LLOYD FREIGHT SYSTEMS PVT LTD, CHENNAI V. DCIT COMPANY CIRCLE 2 (3), CHENNAI

ITA 1575/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0121 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 10-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: T VASUDEVAN
• Keywords: TDS; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . . . , . , ! BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI S.JAYARAMAN, ACCOUNTANT MEMBER / I.T.A. NO.1575/CHNY/2018 /ASSESSMENT YEAR : 2010-11 M/S. INDO LLOYD FREIGHT SYSTEMS P. LTD., OLD NO.11, NEW NO.19, KATCHALEESWARAR AGRAHARAM STREET, GEORGE TOWN, CHENNAI-600 001. VS THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-2(3), CHENNAI-600 034 PAN: AAACI3782L ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. T.VASUDEVAN, ADVOCATE /RESPONDENT BY : MR. AR V SREENIVASAN, JCIT /DATE OF HEARING : 26.03.2019 /DATE OF PRONOUNCEMENT : 28.03.2019 / O R D E R PER S.JAYARAMAN, AM: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-13, CHENNAI, IN ITA NO. 05/ CIT(A)-13/AY 2010- 11 DATED 06.12.2017 FOR ASSESSMENT YEAR 2010-11. 2. M/S. INDO LLOYD FREIGHT SYSTEMS P. LTD., THE ASSESS EE, IS ENGAGED IN THE BUSINESS AS CUSTOMS HOUSE AGENTS IN CLEARING AND FORWARDING ACTIVITY. WHILE MAKING THE ASSESSMENT FOR THE ASSE SSMENT YEAR 2010- 11, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF TDS OF 12,63,187/- ON THE GROUND THAT PROPORTIONATE INCOME AS APPEAR ING IN FORM 26AS WAS NOT OFFERED FOR TAX. FURTHER, HE MADE DISALLOW ANCE U/S.40(A)(IA) AT 2 ITA NO.1575/CHNY/2018 42,09,477/- CLAIMED TO HAVE BEEN INCURRED TOWARDS P ROFESSION & CONSULTANCY CHARGES, RENT AND BUSINESS PROMOTION EX PENSES. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE LD. CIT(A) DISMISSED THE APPEAL. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED THIS APPEAL. 3. THE LD. AR SUBMITTED THAT THE LD. CIT(A) FAILE D TO APPRECIATE THAT THE ENTIRE GROSS RECEIPTS ON WHICH TDS HAD BEEN EFF ECTED BY THE PAYERS IS PART OF THE DISCLOSURES BY ASSESSEE AND THAT THE ASSESSEE HAVING NETTED THE RECEIPTS AGAINST THE DIRECT COSTS INCUR RED WHILE SHOWING IN P & L ACCOUNT, THE DENIAL OF TDS CREDIT IS WHOLLY UNJUSTIFIED AND UNTENABLE IN LAW. IN THIS REGARD, HE INVITED OUR ATTENTION TO THE PAPER BOOK, WHEREIN DIVISION-WISE OPERATING INCOME SHOWIN G RECEIPTS, PAYMENT, NET OPERATING REVENUE TAKEN TO PROFIT A ND LOSS ACCOUNT AND BRANCHES WISE PARTICULARS WERE PLACED AND SUBMITTED THAT THOUGH THE ASSESSEE HAS GIVEN ENTIRE PARTICULARS, THE AO HELD THAT ASSESSEE OFFERED ONLY 32% OF THE GROSS INCOME IN THE PROFI T & LOSS ACCOUNT AFTER NET OFF EXPENSES AND ACCORDINGLY ALLOWED PROPORT IONATE CLAIM ONLY. PER CONTRA, THE LD. DR SUBMITTED THAT IT IS CLEAR FROM THE MATERIAL POINTED OUT BY THE LD. AR AND FROM THE ORDERS OF THE LOWER AUTHORITIES THAT OUT OF THE RECEIPTS OF 16,72,01,761/-, THE PAYMENTS CLAIMED TO HAVE BEEN MADE OF 14,34,80,865/- HAS NOT BEEN SUBJECTED TO PROPER 3 ITA NO.1575/CHNY/2018 SCRUTINY AS IT WAS NOT IN THE MAIN ACCOUNTS, THE A O HAS SIMPLY TAKEN NOTE OF THE FACT THAT THE INCOME AS PER FORM 26AS WAS AT 7,87,38,380/- AND PROCEEDED TO COMPLETE THE ASSES SMENT. SINCE THE PAYMENT CLAIMED AT 14,34,80,865/- HAS NOT BEEN PROPERLY SCRUTINIZED, THIS ISSUE MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR PROPER EXAMINATION AND DUE A DJUDICATION. 4. THE NEXT ISSUE IS ON THE DISALLOWANCE MADE U/S .40(A)(IA). THE LD. AR INVITED OUR ATTENTION TO THE ORDER OF THE LD . CIT(A) AND SUBMITTED THAT THOUGH THE ASSESSEE HAS DEDUCTED THE TAX ON T HE IMPUGNED PAYMENTS AND CHALLANS FOR THE TAXES PAID, WHICH WAS DOWNLOADED FROM THE NSDL WEBSITE WERE FURNISHED BEFORE THE CIT(A), THE LD. CIT(A) DISMISSED THE APPEAL. IN THIS REGARD, THE LD. AR I NVITED OUR ATTENTION TO THE COPIES OF CHALLAN STATUS QUERY TAX PAYER DOWNL OADED FROM NSDL WEBSITE PLACED IN THE PAPER BOOK AND SUBMITTED THA T THE IMPUGNED PAYMENTS SUFFERED TDS, CORRESPONDING PARTICULARS ARE AVAILABLE, THERE WAS NO NON-COMPLIANCE OF TDS PROVISIONS AND THERE FORE THE IMPUGNED DISALLOWANCE IS NOT WARRANTED. IN THIS REGARD, LD. DR SUBMITTED THAT THIS ISSUE MAY ALSO BE REMITTED BACK TO THE ASSESSING OF FICER FOR PROPER EXAMINATION AND DUE ADJUDICATION. 4 ITA NO.1575/CHNY/2018 5. WE HEARD THE RIVAL SUBMISSIONS. THE IMPUGNED ISSUES HAVING NOT BEEN PROPERLY APPRECIATED BY THE LOWER AUTHO RITIES, WE DEEM IT FIT TO SET ASIDE THEIR ORDERS AND REMIT THESE ISSUES B ACK TO THE FILE OF THE AO FOR A FRESH, DENOVO, EXAMINATION. THE ASSESSEE SHALL LAY RELEVANT MATERIALS IN SUPPORT OF ITS CONTENTION BEFORE THE AO AND COMPLY WITH THE REQUIREMENTS OF THE AO IN ACCORDANCE WITH LAW. THE AO IS FREE TO CONDUCT APPROPRIATE ENQUIRY AS DEEMED FIT, BUT HE SHALL FURNISH ADEQUATE OPPORTUNITY TO THE ASSESSSEE ON THE MATE RIAL ETC TO BE USED AGAINST IT AND DECIDE THE MATTER IN ACCORDANCE WIT H LAW. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 28 TH MARCH, 2019 SD/- SD/- ( . . . ) (. ) ( N.R.S.GANESAN) (S.JAYARAMAN) ( / JUDICIAL MEMBER) ( /ACCOUNTANT MEMBER) /CHENNAI, /DATED 28 TH MARCH, 2019 SOMU #$% &% /COPY TO: APPELLANT 2. RESPONDENT 3. ( () /CIT(A) 4. ( /CIT 5. % ##- /DR 6. 0 /GF