DCIT, Coimbatore V. M/s. Ultra Readymix Concrete P Ltd., Coimbatore

ITA 1727/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64510 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2012
• Appeal Filed By: Department
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 14-09-2012
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Assessee Lawyers: N V IJAYKUMAR ITA NO MDS; CO NO MDS
• Section: 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ------- ITA NO.1727/MDS/2012 ASSESSMENT YEAR : 2008-09 THE DY. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(3), COIMBATORE. V. M/S. ULTRA READYMIX CONCRETE P. LTD., NO. 36-38, 11 TH STREET, TATABAD, COIMBATORE-641 012. (PAN :AAACU7836K) (APPELLANT) (RESPONDENT) A N D C.O. NO. 168/MDS/2012 (IN ITA NO. 1727/MDS/2012) ASSESSMENT YEAR 2008-09 M/S. ULTRA READYMIX V. THE DY. COMMISSIONER CONCRETE P. LTD., OF INCOME TAX, NO. 36-38, 11 TH STREET, COMPANY CIRCLE-I(3), TATABAD, C OIMBATORE. COIMBATORE-641 012. (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY : SHRI K.E.B. RENGARAJAN, JR . STANDING COUNSEL ASSESSEE BY : SHRI N. V IJAYKUMAR ITA NO.1727/MDS /2012 & CO. NO. 168/MDS/2012 2 DATE OF HEARING : 06-11-2012 DATE OF PRONOUNCEMENT : 06-11-201 2 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTIO N BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE CIT(APPEALS)-I, COIMBATORE DATED 17-04-2012 FOR THE ASSESSMENT YEAR 2008-09. 2. THERE IS A DELAY OF 74 DAYS IN FILING THE APPEAL BY THE REVENUE. THE DELAY HAS BEEN EXPLAINED BY WAY OF AN AFFIDAVIT WHEREIN IT IS STATED THAT THE DELAY WAS OCCURRED IN FILING THE APPEAL BEFORE THE TRIBUNAL DUE TO MISPLACEMENT OF T HE RECORDS AND REQUESTED THAT THE DELAY MAY BE CONDONED. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT THE REASON GIVEN BY THE REVENUE FOR THE DELAY IN FILING THE AP PEAL IS NEITHER INTENTIONAL NOR WANTON. THEREFORE WE FIND IT A FIT CASE TO CONDONE THE DELAY. ACCORDINGLY THE DELAY IS CON DONED AND THE APPEAL FILED BY THE REVENUE IS ADMITTED. 3. INSOFAR AS THE MERITS OF THE CASE IS CONCERNED , THE FACTS ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY CARRYING ON ITA NO.1727/MDS /2012 & CO. NO. 168/MDS/2012 3 THE BUSINESS OF MANUFACTURE OF READYMIX CONCRETE, B LUE METAL AND BY-PRODUCTS. FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD FILED THE RETURN OF INCOME ELECTRONICA LLY BY DECLARING TOTAL LOSS OF ` 42,86,699/- UNDER THE NORMAL PROVISIONS AND BOOK PROFIT OF ` 1,61,53,247/- UNDER SECTION 115JB OF THE INCOME TAX ACT, 1961 ('THE ACT' FOR SHO RT). THE RETURN WAS PROCESSED INITIALLY U/S 143(1) OF THE AC T AND SUBSEQUENTLY THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY AFTER ISSUING A NOTICE TO THE ASSESSEE. 4. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS OBSERVED THAT AS PER THE TRAN SPORT BILLS THE ASSESSEE SHOULD HAVE DEDUCTED TDS ON THEM. AS THIS HAD NOT BEEN DONE THE AMOUNT OF ` 92,12,636/- WAS DISALLOWED UNDER SECTION 40A(IA) OF THE ACT. SUBSEQUENTLY PEN ALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WERE INITIATED. DURING THE COURSE OF THE PENALTY PROCEEDINGS DETAIL ED SUBMISSIONS WERE MADE BY THE ASSESSEE ON 31-05-2011 AND 03-06-2011 WHICH ARE REPRODUCED AS UNDER : AS PER THE ASSESSMENT ORDER U/S 143(3) AN AMOUNT OF ` 92,12,636/- HAS BEEN DISALLOWED, BEING THE AMOUNT ON WHICH TAX WAS NOT DEDUCTED AT SOURCE AND NOT PAID. IN COMPLIANCE OF THE ITA NO.1727/MDS /2012 & CO. NO. 168/MDS/2012 4 ORDER WE HAVE PAID THE TDS AMOUNT OF ` 2,93,000/- ON 21.01.2011. COPY OF THE CHALLAN ENCLOSED HEREWITH. PRESENTLY WE ARE PURCHASING THE SAND AND BLUE METALS WITH SINGLE BILL, BEING TH E COST OF MATERIAL AT OUR PLANT. WE HAVE PURCHASED SAND AND BLUE METALS FOR MANUFACTURE OF READY MIX CONCRETE. WE HAVE ISSUED PURCHASE ORDERS FOR SUPPLY OF BLUE METAL WITH SUPPLIERS OF BLUE METAL AND FOR SUPPLY OF RIVE R SAND WITH RIVER SAND SUPPLIERS. THIS ORDER REFERS TO SUPPLY OF MATERIALS ONLY AT OUR PLANT. THE SUPPLIERS OF THESE MATERIALS HAVE ISSUED TWO BILLS, ONE WAS FOR MATERIAL AND THE OTHER WAS TRANSPORT, ALTHOUGH WE ORDERED ONLY FOR MATERIALS. SINCE WE PURCHASED ONLY MATERIALS, WE THOUGH TDS NEED NOT BE DEDUCTED, ALTHOUGH SUCH BILLS WERE ISSUED BY THE SUPPLIERS OF MATERIALS. WE HAVE NOT CONCEALED ANY PARTICULARS OF INCOME NOR FURNISHED ANY INCORRECT EVIDENCE OR MATERIALS IN THE COURSE OF ASSESSMENT PROCEEDINGS. WE TOOK A STAND WHILE FILLING OF INCOME-TAX RETURN THAT THE AMOUNT PAID WAS ACTUAL TOWARDS SUPPLY OF MATERIALS AS SUCH, AND NO TDS WAS DEDUCTIBLE. HENCE WE DID NOT ADD BACK THE TRANSPORT CHARGES WHILE APPLYING PROVISIONS OF SEC. 40A(IA). ITA NO.1727/MDS /2012 & CO. NO. 168/MDS/2012 5 THE ASSESSING OFFICER AFTER CONSIDERING THE EXPLANA TION OF THE ASSESSEE HAS OBSERVED THAT THE ASSESSEE HAS FAILED TO PAY TDS ON FREIGHT CHARGES WHICH AMOUNTED TO WRONGFUL CLAIM OF EXPENDITURE. THE ASSESSING OFFICER THEREFORE LEVIE D A PENALTY OF ` 28,46,705/- U/S 271(1)(C) OF THE ACT. 5. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(APPEALS). IT WAS SUBMITTED BEFORE THE LEARNED CIT(APPEALS) THAT ALL THE PARTICULARS IN RESPECT OF THE PAYMENTS MADE WERE DISCLOSED TO THE ASSESSING OFFICER AND TH E AASSESSEE HAD NEITHER CONCEALED THE INCOME NOR FURN ISHED INACCURATE PARTICULARS. THE LEARNED CIT(APPEALS) A FTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE CANCELL ED THE PENALTY BY OBSERVING AS UNDER : 5. I HAVE GONE THROUGH THE SUBMISSIONS MADE BY THE APPELLANT AND THE ORDER OF THE ASSESSING OFFICE R. AS SEEN FROM THE PURCHASE ORDER PLACED WITH THE MATERIAL SUPPLIERS, IT IS CLEARLY MENTIONED THAT TH E DELIVERY OF THE SAND AND METAL SHOULD BE AT THE FAC TORY PREMISES OF THE APPELLANT. HOWEVER, THE SUPPLIERS BIFURCATED THE VALUE OF INVOICE INTO MATERIAL SUPPL Y AND TRANSPORT BILLS FOR THE PURPOSE OF VAT. AS SEEN FR OM THE ASSESSMENT ORDER ALSO, THE APPELLANT SUBMITTED THE ITA NO.1727/MDS /2012 & CO. NO. 168/MDS/2012 6 SAME FACTS BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER AT PARA 4 OF THE ASSESSMENT ORDER STATED THAT THE ASSESSEE HAS DEDUCTED TDS ON MOST O F THE EXPENSES AND ALSO FILED RECONCILIATION STATEMEN TS. HOWEVER, SINCE NO TDS WAS DEDUCTED ON ACCOUNT OF PAYMENT MADE FOR TRANSPORT, THE ASSESSING OFFICER MADE DISALLOWANCE U/S 40A(IA) OF THE INCOME TAX ACT , 1961. THE LD. AR SUBMITTED THAT IN THE NEXT FINANC IAL YEAR, THE APPELLANT DEDUCTED TDS ON THESE PAYMENTS AND REMITTED TO THE GOVERNMENT ACCOUNT WITH INTERES T. THE APPELLANT FILED COPY OF THE CHALLAN WHERE PAYMENTS WERE MADE ON ACCOUNT OF TDS DEDUCTION. THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO SHOW THAT THE APPELLANT HAS FILED INACCURATE PARTICULARS OR CONCEALED INCOME. THE HONOURABLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PRIVATE LIMITED 322 ITR 128 (SC) HELD THAT IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, MAKING AN INACCURATE CL AIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THEREFORE, IT IS OBVIOUS THAT IT MUST BE SHOWN THAT THE CONDITIONS UNDER S. 271(1)(C) MUST EXIST BEFORE THE PENALTY IS IMPOSED. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETUR N FILED BECAUSE THAT THE ONLY DOCUMENT, WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. A ITA NO.1727/MDS /2012 & CO. NO. 168/MDS/2012 7 MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCUR ATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO INACCURATE PARTICULARS. 6. THE ASSESSEE HAD FURNISHED ALL THE DETAILS OF IT S EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCU RATE NOR COULD BE VIEWED AS CONCEALMENT OF INCOME ON ITS PART. THE FACTS OF THE CASE ARE CLEARLY COVERED BY THE DECISION OF THE APEX COURT DISCUSSED ABOVE. FURTHE R, THE APPELLANT HAS PAID TDS WITH INTEREST IN THE NEX T FINANCIAL YEAR. 6. ON BEING AGGRIEVED, THE REVENUE HAS CARRIED THE MATTER BEFORE THE TRIBUNAL. THE LEARNED DR STRONGL Y SUPPORTED THE ORDER PASSED BY THE ASSESSING OFFICER . ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSE E STRONGLY SUPPORTED THE ORDER PASSED BY THE LEARNED CIT(APPEALS). 7. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORD S AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. THE CASE OF THE REVENUE IS THAT THE ASSESSEE PAID CERTA IN AMOUNTS TOWARDS TRANSPORT BILLS AND IN ACCORDANCE W ITH ITA NO.1727/MDS /2012 & CO. NO. 168/MDS/2012 8 SECTION 40A(IA) OF THE ACT THE ASSESSEE WAS UNDER OBLIGATION TO DEDUCT TDS. THE ASSESSEE FAILED TO D EDUCT THE TDS. THEREFORE THE AMOUNT OF EXPENDITURE OF ` 92,12,636/- WAS DISALLOWED BY THE ASSESSING OFFICER . BEFORE THE CIT(APPEALS) IT WAS SUBMITTED BY THE ASS ESSEE THAT THE ASSESSEE COMPANY HAD PAID TDS AMOUNT WITH INTEREST AMOUNTING TO ` 2,93,000/- ON 21-01-2011. THE LEARNED CIT(APPEALS) AFTER CONSIDERING THE ENTIRE F ACTS AND CIRCUMSTANCES OF THE CASE AND BY FOLLOWING THE DECI SION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT V. REL IANCE PETRO PRODUCTS PVT. LTD. (SUPRA) CANCELLED THE PENA LTY LEVIED BY THE ASSESSING OFFICER. WE FIND THAT THE ASSESSEE NEITHER CONCEALED THE INCOME NOR FILED INACCURATE PARTICULARS OF INCOME BUT ONLY FAILED TO DEDUCT THE TDS WHICH WAS PAID SUBSEQUENTLY. THEREFORE, AFTER TAKI NG INTO CONSIDERATION THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE WE FIND NO INFIRMITY IN THE ORDER PASSED BY TH E LEARNED CIT(APPEALS) AND ACCORDINGLY THE APPEAL FIL ED BY THE REVENUE IS DISMISSED. 8. INSOFAR AS THE CROSS OBJECTION NO. 168/MDS/2012 IS CONCERNED, THIS HAS BEEN FILED ONLY TO SUPPORT THE ORDER ITA NO.1727/MDS /2012 & CO. NO. 168/MDS/2012 9 PASSED BY THE LEARNED CIT(APPEALS). IN VIEW OF OUR DECISION IN THE APPEAL OF THE REVENUE, THE CROSS OB JECTION FILED BY THE ASSESSEE IS INFRUCTUOUS AND THEREFORE THE SAME IS DISMISSED AS INFRUCTUOUS. 9. IN THE RESULT, BOTH THE APPEAL FILED BY THE REVE NUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON TUESDAY, THE 6 TH OF NOVEMBER, 2012, AT CHENNAI. SD/- SD/- (ABRAHAM P. GEORGE) ( V.DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 06 TH NOVEMBER, 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE