DCIT CORPORATE CIRCLE 4 (1), CHENNAI V. M/S LITE ON MOBILE INDIA PVT LTD, KANCHEEPURAM

ITA 1725/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8203 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 21-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAYAPRABHA
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: TDS; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI . . . , ! ' # , $ #% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.1725/CHNY/2018 & '& /ASSESSMENT YEAR: 2014-15 DY. COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-4(1), CHENNAI. VS. M/S. LITE-ON-MOBILE INDIA PVT. LTD., PLOT NO.1A, NOKIA TELECOM SPECIAL ECONOMIC ZONE, SIPCOT INDUSTRIAL PARK PHASE III, CHENNAI BANGALORE HIGHWAY, SRIPERUMBUDUR, KANCHEEPURAM 602 105. [PAN: AADCP 9246K] ( () /APPELLANT) ( *+() /RESPONDENT) () , - / APPELLANT BY : MS. VIJAYA PRABHA, JCIT *+() , - /RESPONDENT BY : SHRI R. VIJAYARAGHAVAN, ADVOCATE . , /$ /DATE OF HEARING : 14.03.2019 01' , /$ / DATE OF PRONOUNCEMENT : 28.03.2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGA INST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -8, CHENNAI (HEREINAFTER CALLED AS CIT(A)) DATED 28.08.2018 F OR THE ASSESSMENT YEAR (AY) 2014-15. ITA NO.1725/CHNY/2018 (AY: 2014-15) :- 2 -: 2. THE APPELLANT RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1. THE ORDER OF THE .CIT(A) IS CONTRARY TO LAW AND FACTS OF THE CASE. 2. THE LD.CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS. 39,66,971/- MADE ON ACCOUNT OF GROSSIN9 UP OF TDS ON MANAGEMENT FEE. 2.1 THE CIT(A) HAD FAILED TO CONSWER THAT THE TDS P AID BY THE ASSESSEE COMPANY IS ON BEHALF OF ITS ASSOCIATE ENTE RPRISE, WHICH IS NOT AN ALLOWABLE EXPENSE AS PER LAW. 3. THE ID CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS. 74,78,035/- MADE ON ACCOUNT OF GROSSING OF TDS ON EXTERNAL COMM ERCIAL BORROWING. 3.1 THE CIT(A) HADFAILED TO CONSIDER THAT THE TDS PAID BY TN ASESSEE COMPANY IS ON BEHALF OF ITS ASSOCIATE ENTER PRISE, WHICH IS NOT AN ALLOWABLE EXPENSEAS PER LAW. 3.2. THE CIT(A) HAD FAILED TO CONSIDER THE DECISION OF THE VIDE ITS ORDER DATED30.0.2017 VIDE F.NO.381/DRP-2 BANGALORE/ 2016-17 DRP ON THE SAME ISSUE FOR EARLIER YEAR IS AY 2013-14, I N RESPECT OF THE SAME ASSESSEE. 4. THE ID.CIT(A) ERRED IN FORWARDING THE SCHEDULE O F GROSSED UP AMOUNTS ON WHICH TDS HAS BEEN DEDUCTED, WHICH WERE PRODUCED BEFORE HIM FOR THE FIRST TIME, FOR EXAMINATION OF T HE AC. 5. HAVING REGARD TO THE PROVISIONS OF RULE 46A OF T HE I.T.RULES, THE CIT(A) OUGHT TO HAVE FORWARDED THE SCHEDULE OF GROS SED UP AMOUNTS ON WHICH TDS HAS BEEN DEDUCTED, WHICH WERE PRODUCED BEFORE HIM FOR THE FIRST TIME, FOR EXAMINATION OF THE AD. 6. IT IS SUBMITTED THAT SINCE ISSUE IS CONTESTED BE FORE THE HONBLE ITAT BY THE ASSESSEES COMPANY, AND IN ORDER, TO KE EP THE ISSUE ALIVE, THE PRESENT APPEAL IS SUGGESTED. 7. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE RESPONDENT-ASSESSEE IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956. IT IS ENGAG ED IN THE BUSINESS OF MANUFACTURE AND SALE OF PLASTICS MOULDS & ELECTRONI C COMPONENTS. THE ITA NO.1725/CHNY/2018 (AY: 2014-15) :- 3 -: RETURN OF INCOME FOR THE AY 2014-15 WAS FILED ON 25 .11.2015 DISCLOSING LOSS OF RS. 9,33,05,846/-. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE DY. CIT, CORPORATE CIRCLE-4(1), CHENNAI VIDE ORDER DATED 30.12.2016 AT LOSS OF RS. 8,16,10,840/-. WHILE DOING SO, THE ASSESSING OFFICER (AO) HAD DISALLOWED THE FOLLOWING TWO ITEMS 1) DISALLOWANCE OF GROSSING OF TDS ON MANAGEM ENT FEE OF RS. 39,66,971/- 2) DISALLOWANCE OF GROSSING OF TDS ON E XTERNAL COMMERCIAL BORROWINGS OF RS. 74,78,035/- ON THE GROUND THAT TH E RESPONDENT- ASSESSEE HAD NOT DEDUCTED TDS ON TDS WHICH IS BORNE BY THE ASSESSEE COMPANY ON BEHALF OF THE PAYEE. ON APPEAL BEFORE LD . CIT(A), CONSIDERING THE SUBMISSIONS, DETAILS FILED BEFORE H IM HELD THAT THE ASSESSEE HAD DEDUCTED TDS ON TDS AND DIRECTED THE A O TO DELETE THE DISALLOWANCE. 4. BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. 5. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THERE IS NO DISPUTE REGARDING LIABILITY OF TDS ON TDS, WHICH IS BORNE BY THE RESPONDENT-ASSESSEE. IT IS THE CONTENT ION OF THE RESPONDENT-ASSESSEE THAT IT DEDUCTED TDS ON TDS BY GROSSING UP THE TDS AMOUNT. HOWEVER, FROM THE DETAILS FILED IT IS NOT CLEAR WHETHER TDS WAS DEDUCTED ON TDS AMOUNT. HOWEVER, IT IS A MATTE R OF FACT WHICH ITA NO.1725/CHNY/2018 (AY: 2014-15) :- 4 -: REQUIRES TO BE PROVED. SINCE, THESE DETAILS WERE N OT FLED BEFORE THE LD. AO. IN OUR CONSIDERED OPINION, THE MATTER REQUIRES REMISSION TO THE FILE OF AO FOR FRESH ADJUDICATION AFTER VERIFICATION OF EVIDENCE OF TDS MADE ON TDS. HENCE, THE APPEAL FILED BY THE REVENUE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 28 TH DAY OF MARCH, 2019 IN CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ! ' # ) (INTURI RAMA RAO) $ /ACCOUNTANT MEMBER /CHENNAI, 2 /DATED: 28 TH MARCH, 2019. EDN, SR. P.S , */34 54'/ /COPY TO: 1. () /APPELLANT 2. *+() /RESPONDENT 3. . 6/ ( )/CIT(A) 4. . 6/ /CIT 5. 47 */ /DR 6. & 8 /GF