Zenith Erectors Pvt. Ltd., , Haldia V. ACIT, Circle - 27, Haldia , Haldia

ITA 2183/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7015 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 12-10-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: J M THAND
• Keywords: Proportionate interest; Retrospective amendment; TDS
• Section: 143(3); 40(a)(ia); 201(1)

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 2183 / KOL / 20 17 ASSESSMENT YEAR :2013-14 ZENITH ERECTORS PVT LTD. P-12, HALDIA INDUSTRIAL ESTATE, DURGACHAK, CPT MARKET, HALDIA, DIST. PURBA MEDINIPUR, PIN 721602 [ PAN NO.AAACZ 1478 J ] V/S . ACIT, CIRCLE-27 LIC MORE, BASUDEVPUR, KHANJANCHAK, HALDIA, PURBA MEDINIPUR-721602 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI J.M. THAND, ADVOCATE /BY RESPONDENT SMT. MADHU MALTI GHOSH /DATE OF HEARING 16-41-2019 /DATE OF PRONOUNCEMENT -04-2019 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2013-14 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-7, KOLKATAS O RDER DATED 09.02.2017 PASSED IN CASE NO.163. 165 & 176 CIT(A)-7/KOL/CIRCL E-27/16-17, INVOLVING PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES FIRST SUBSTANTIVE GROUND CHALLENG ES BOTH THE LOWER AUTHORITIES ACTION DISALLOWING VARIOUS PAYMENTS AM OUNTING TO 2,07,27,715/- U/S 40(A)(IA) OF THE ACT ON ACCOUNT OF ITS FAILURE IN DEDUCTING TDS THEREUPON. ITA NO.2183/KOL/2017 A .Y. 2013-14 ZENITH ERECTORS PVT. LTD. VS. ACIT, CIR-27, HALDIA PAGE 2 WE MAKE IT CLEAR AT THE OUTSET THAT THERE IS NO DIS PUTE ABOUT THE NON-DEDUCTION OF TDS ON THE ABOVE PAYMENTS. THE ASSESSEE IS FAIR ENOUGH TO THIS EFFECT. IT FILES BEFORE US A COPY OF LISTS OF PAYEES DETAILS T HEIR PAN, TOTAL BILL AND TDS DETAILS DURING THE COURSE OF HEARING. LEARNED COUNS EL QUOTES U/S. 40(A)(IA) 2 ND PROVISO STIPULATING NON APPLICATION OF IMPUGNED STA TUTORY PROVISION IN CASE OF THE PAYEES CONCERNED HAVING ASSESSED TO TAX NOT MAK ING IT AS THE ASSESSEE IN DEFAULT U/S 201(1) OF THE ACT. HON'BLE DELHI HIG H COURTS DECISION IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP PVT. LTD. (2015) 377 ITR 635 (DEL) HOLDS THAT SEC. 40(A)(IA) 2 ND PROVISO INSERTED BY THE FINANCE ACT, 2012 W.E.F. 01.04.2013 APPLIES WITH RETROSPECTIVE EFFECT BEING CURATIVE IN NATURE. WE DRAW SUPPORT THEREFROM AND RESTORE THE INSTANT FIRST ISS UE BACK TO THE ASSESSING OFFICER FOR FACTUAL VERIFICATION OF THE PAYEES IN I SSUE AS TO WHETHER THEY HAVE DULY RECORDED PAYMENTS IN ISSUE AS INCOME FOLLOWED BY ASSESSMENT THEREOF AS PER LAW AS STIPULATED IN SEC. 40(A)(IA) 2 ND PROVISO R.W.S. 201(1) 1 ST PROVISO OF THE ACT. THE ASSESSEE IS DIRECTED TO FILE ALL THE N ECESSARY DETAILS WITHIN THREE EFFECTIVE OPPORTUNITIES OF HEARING BEFORE THE ASSES SING OFFICER. THIS FIRST SUBSTANTIVE GROUND IS ACCEPTED FOR STATISTICAL PURP OSES IN ABOVE TERMS. 3. NEXT COMES ASSESSEES SECOND SUBSTANTIVE GROUND SEEKING TO DELETE SECOND DISALLOWANCE OF INTEREST PAYMENT AMOUNTING T O 13,42,902/- PAID TO M/S INDIAN OIL CO. LTD WITHOUT DEDUCTING TDS. THERE IS NO ISSUE HEREIN AS WELL THAT ASSESSEE HAS NOT DEDUCTED ANY TDS REGARDING TH E IMPUGNED INTEREST PAYMENT. HON'BLE DELHI HIGH COURTS JUDGMENT IN CIT VS. TRANS BHARAT AVIATION (P) LTD (2010) 320 ITR 671 (DEL) HAS UPHELD THE TRIBUNALS DECISION PRESUMING THAT IF THE PAYEE / DEDUCTEE IS A GOVERNMENT OF IND IA UNDERTAKING, IT CANNOT BE PRESUMED TO HAVE NOT PAID TAX ON THE RECEIPTS IN IS SUE. LEARNED DEPARTMENTAL REPRESENTATIVE IS FAIR ENOUGH IN NOT DISPUTING THE FACT THAT DEDUCTEEE HEREIN M/S INDIAN OIL CO. LTD. IS A GOVERNMENT OF INDIA PU BLIC SECTOR UNDERTAKING. WE DRAW SUPPORT FROM THE ABOVE LEGAL POSITION AND D ELETE THE IMPUGNED DISALLOWANCE / ADDITION IN PRINCIPLE. WE THEREFORE CONCLUDE THAT ASSESSEES LIABILITY TO PAY INTEREST IS ONLY UPTO THE DATE OF FILING OF RETURN AT ITS PSU/PAYEES BEHEST AS PER THE SAID CASE LAW. THE ASSESSING OFFI CER IS ACCORDINGLY DIRECTED ITA NO.2183/KOL/2017 A .Y. 2013-14 ZENITH ERECTORS PVT. LTD. VS. ACIT, CIR-27, HALDIA PAGE 3 TO FURNISH AFRESH COMPUTATION IN THESE LETTERS. THI S SECOND SUBSTANTIVE GROUND IS TAKEN AS PARTLY ACCEPTED ACCORDINGLY. 4. LASTLY COMES TO ASSESSEES THIRD SUBSTANTIVE GRO UND THAT CIT(A) HAS ERRED IN NOT DELETING PROPORTIONATE INTEREST DISALL OWANCE OF 69,20,652/- AND ADVANCE GIVEN. WE ARE INFORMED THAT THE ASSESSING O FFICER HAS NOT GIVEN ANY EFFECT TO THE CIT(A)S DIRECTION IN THIS REGARD IN CONSEQUENTIAL COMPUTATION. WE ACCORDINGLY DIRECT THE ASSESSING OFFICER TO PASS AF RESH ORDER IN COMPLIANCE TO THE CIT(A)S DIRECTIONS CONTAINED IN PARA 9.3 PAGE- 11 OF THE LOWER APPELLATE ORDER. THE CIT(A) HAS MADE IT CLEAR THEREIN THAT MO ST OF THE ASSESSEES LOAN ARE FOR BUSINESS PURPOSES ONLY. HE HAD THEREFORE DI RECTED THE ASSESSING OFFICER TO VERIFY THE NECESSARY FACTS AND ALLOW APP ROPRIATE RELIEF. WE ACCORDINGLY RESTORE THE INSTANT THIRD ISSUE AS WELL BACK TO THE ASSESSING OFFICER. 5. THIS ASSESSEES APPEAL IS PARTLY ALLOWED IN ABOV E TERMS. ORDER PRONOUNCED IN THE OPEN COURT 2 6/04/2019 SD/- SD/- ( %) (' %) (DR.A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 26 / 04 /201 9 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ZENITH ERECTORS PVT. LTD. P-12, HALDIA I NDIUSTRIAL ESTATE, DURGACHAK CPT MARKET, HAL DIA, DIST. PURBA MEDINIPUR-721602 2. /RESPONDENT-ACIT, LIC MORE, BASUDEVPUR, KHANJANCHAK , HALDIA, PURBA MEDINIPUR PIN 72 1602 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , 3,