Mahindra & Mahindra Ltd., Mumbai V. ITO,TDS-1, Nashik

ITA 219/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49865 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 08-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARESHWAR SHARMA
• Assessee Lawyers: H P MAHAJANI; V R KRISHNAN
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 218 TO 221/PN/2010 A.Y. 2005-06 TO 2008-09 MAHINDRA & MAHINDRA LTD., (IAGATPURI) MAHINDRA TOWERS CORPORATE TAXATION DEPARTMENT GROUND FLOOR, WORLI, MUMBAI PAN AAACM 3025E APPELLANT VS. I.T.O. TDS 1, NASIK RESPONDENT APPELLANT BY: SHRI H.P. MAHAJANI AND SHRI V.R. KRISHNAN RESPONDENT BY: SHRI HARESHWAR SHARMA ORDER PER SHAILENDRA KUMAR YADAV ALL THESE APPEALS PERTAIN TO THE SAME ASSESSEE ON SIMILAR ISSUE ARISING OUT OF CONSOLIDATED ORDER OF THE CIT(A) DATED 30-11-2009 FOR A.Y. 2005-06 TO 2008-09 ON THE POINT OF CONFIRMATION OF ORDER PASSED BY THE ASSESSING OF FICER U/S 201(1) AND 201(1A) READ WITH SECTION 194-C OF T HE ACT, WITH REGARDS TO DEFAULT FOR DEDUCTION OF TAX AT SOU RCE. SO, 2 218 TO 221/PN/2010 MAHINDRA & MAHINDRA LTD A.Y. 2005-06 TO 2008-09 THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSEE IS A PUBLIC LIMITED COMPANY ENGAGED IN MANUFACTURE AND SALE OF UTILITY VEHICLES, SPORTS UT ILITY VEHICLES (SUVS), THREE WHEELERS AND OTHER MOTOR VEH ICLES. THE ASSESSEE HAS ONE OF THE MANUFACTURING UNITS LOC ATED IN IGATPURI, WHICH MANUFACTURES ENGINES BASICALLY FOR THEIR CAPTIVE USE. THE ASSESSEE BUYS VARIOUS COMPONENTS F ROM DIFFERENT VENDORS FOR THE PURPOSE OF MANUFACTURE OF THESE ENGINES. THESE COMPONENTS ARE MANUFACTURED ACCORDIN G TO THE SPECIFICATIONS, DESIGNS AND REQUIREMENTS OF THE ASSESSEE. THE ITO (TDS) NASIK (HEREINAFTER REFERRE D TO AS THE ASSESSING OFFICER FOR SHORT) WANTED TO EXAMIN E THESE TRANSACTIONS TO SEE WHETHER THERE WAS ANY LIABILITY TO DEDUCT TO TAX U/S 194-C OF THE ACT IN VIEW OF THE TRANSACTIONS OF THE ASSESSEE WITH VARIOUS VENDORS R EGARDING PURCHASE OF THESE COMPONENTS. IT WAS FOUND THAT THE ASSESSING OFFICER PASSED AN ORDER U/S 201(1) AND 20 1(1A) OF THE ACT FOR A.Y. 2007-98 HOLDING THAT THERE WAS A FAILURE OF THE ASSESSEE REGARDING DEDUCTION OF TAX U/S 194- C OF THE ACT. THE ASSESSING OFFICER PASSED SIMILAR ORDERS F OR A.Y. 3 218 TO 221/PN/2010 MAHINDRA & MAHINDRA LTD A.Y. 2005-06 TO 2008-09 2005-06 TO 2008-09. AGGRIEVED BY THESE ORDERS, THE ASSESSEE WENT IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, WHEREIN THE CIT(A) HELD AS UNDER: 8. I HAVE CONSIDERED THE DETAILED SUBMISSIONS OF T HE APPELLANT AND ALSO THE ORDERS PASSED BY THE AO AS W ELL AS HIS REMAND REPORT. THE FACTUAL POSITION PREVAIL ING IN IGATPURI PLANT/UNIT IS ALMOST SAME TO THAT AT TH E NASIK PLANT/UNIT. THE APPELLANT ADMITTED THIS POSITION AT PARA 7 OF THEIR SUBMISSIONS DATED 10-8- 2009. AS THE FACTS ARE SAME FOR THE YEARS UNDER APPEAL AND THE VARIOUS ISSUES RAISED BY THE APPELLA NT WERE ELABORATELY DISCUSSED AND DECIDED BY ME IN THE ORDER DATED 6-3-2009 AND THE SAID DECISION APPLIES WITH EQUAL FORCE TO THE PRESENT APPEALS UNDER CONSIDERATION BEFORE ME. AS REGARDS THE APPELLANT S CONTENTION THAT THE PRESENT APPEAL SHOULD BE DECIDE D IN THE SPIRIT OF THE NEW AMENDMENT BROUGHT TO THE SECTION 194-C OF THE ACT, CANNOT BE ACCEPTED AS THE SAID AMENDMENTS ARE APPLICABLE IN RESPECT OF THE TRANSACTIONS AND THE PAYMENTS MADE OR CREDITED ON O R AFTER 1-10-2009. THE LEGISLATURE MADE IT VERY CLEA R ABOUT THE PROSPECTIVE EFFECT OF THESE AMENDMENTS, THEREFORE, THE BENEFIT CANNOT BE EXTENDED RETROSPECTIVELY TO FAVOUR THE APPELLANTS CASES. A READING OF THE MEMORANDUM EXPLAINING THE PROVISIONS OF THE FINANCE BILL CLEARLY SHOWS THAT THE PROPOSED AMENDMENTS ARE EFFECTIVE FROM 1-10-2009 AND ACCORDINGLY, WOULD APPLY TO THE CREDITS OR PAYMENTS EFFECTED ON OR AFTER 1-10-2009. THEREFORE, THE APPELLANTS SUBMISSIONS CANNOT BE ACCEPTED IN HIS REGARD. 9. IN VIEW OF THE ABOVE DISCUSSIONS, I AM OF THE CONSIDERED OPINION THAT THE ORDER DATED 6-3-2009 IN APPELLANTS OWN CASE IN RESPECT OF THE NASIK UNIT MENTIONED ABOVE, SQUARELY APPLIES TO THE PRESENT APPEALS AND I HOLD ACCORDINGLY. HENCE, THE APPEALS FOR A.Y. 2005-06 TO 2008-09 ARE HEREBY DISMISSED. 4 218 TO 221/PN/2010 MAHINDRA & MAHINDRA LTD A.Y. 2005-06 TO 2008-09 3. SO, THE CIT(A) REJECTED THE CLAIM OF ASSESSEE BY FOLLOWING HIS OWN ORDER FOR THE A.Y. 2007-08 AS MEN TIONED ABOVE. THE LEARNED AR POINTED OUT BEFORE US THAT THE TRIBUNAL IN ITA NO. 377/PN/2009 FOR A.Y. 2007-08 IN ASSESSEES OWN CASE IN RESPECT OF NASIK UNIT HAD O CCASION TO CONSIDER SIMILAR ISSUE AND THE MATTER HAS BEEN R ESTORED TO CIT(A) VIDE PARA 7 OF ITS ORDER DATED 1-6-2010 B Y OBSERVING AS UNDER: FROM THE ABOVE, IT IS MENTIONED THAT IT IS THE CAS E, WHERE THE RAW MATERIALS WERE NOT SUPPLIED BY THE ASSESSEE TO THE VENDORS AND THE REQUIRED RAW MATERIALS WERE PURCHAS ED BY THEM. OF COURSE, SPECIFICATIONS AND REQUIREMENTS W ERE MADE AVAILABLE BY THE ASSESSEE. WHEREAS IN THE ORDERS O F THE REVENUE, THERE IS REFERENCE TO BOTH CIRCUMSTANCES I .E. PAYMENTS INVOLVING SUPPLY OF RAW MATERIALS AND OTHE RS. THESE FACTS ARE NOT CATEGORICALLY MENTIONED BY THE REVENU E IN THE ORDERS. IT IS NOT CLARIFIED EVEN BEFORE US, IF THE IMPUGNED PAYMENTS TO THE VENDORS WITHOUT TDS ENTIRELY DO NOT INVOLVE SUPPLY OF MATERIAL BY THE ASSESSEE. FURTHER, SO FA R AS THE CITATIONS RELIED ON BY THE REVENUE ARE CONCERNED, W E FIND THAT THEY ARE EARLIER IN TIME VIS--VIS THE JUDGMENT IN THE CASE OF GLENMARK PHARMACEUTICALS LTD (ITA NO. 2256 OF 2009 DATED 12-3-2010). HOWEVER, PRIMA FACIE, WE FIND THAT THE FACTS OF THE CASE ARE COMPARABLE WITH THAT OF THE CASE OF GLENMA RK PHARMACEUTICALS LTD. (SUPRA) AND THEREFORE, SO IS T HE RATIO DECIDENDI OF THE SAID BINDING JUDGMENT OF BOMBAY HI GH COURT. THEREFORE, WE ARE OF THE OPINION, THAT THE MATTER S HOULD BE REFERRED TO FILES OF CIT(A) FOR THE LIMITED PURPOSE OF EXAMINING THE FACT OF THE CASE OF GLENMARK PHARMACEUTICALS LT D (SUPRA) AND ALLOW RELIEF AS PER THE SAID JUDGMENT. IN ANY CASE, WE HAVE ALSO TAKEN A VIEW IN THE CASE OF C.G. LUCY SWI TCHGEAR LTD ( VS,. JCIT IN ITA O. 490/PN/2009FOR A.Y. 2005-06. CIT(A) SHALL GRANT THE REASONABLE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. CIT(A) SHALL EXAMINE THE ISSUE IN THE LI GHT OF THE AMENDED PROVISIONS OF SECTION 194C AS EXPLAINED BY THE 5 218 TO 221/PN/2010 MAHINDRA & MAHINDRA LTD A.Y. 2005-06 TO 2008-09 HONBLE HIGH COURT IN THE SAID JUDGMENT. ACCORDING LY, ALL THE GROUNDS OF THE ASSESSEE ARE SET ASIDE. THE LEARNED AR FURTHER SUBMITTED THAT NOTHING REMA INED TO BE VERIFIED AT THE STAGE OF THE CIT(A) BECAUSE THE SAM E WERE GIVEN BEFORE HIM, SO THE RELIEF SHOULD BE GRANTED IN THE LIGHT OF THE ABOVE SAID DECISION OF THE TRIBUNAL IN ITA NO. 377/PN/200 9 (SUPRA). ON THE OTHER HAND, THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND PE RUSING THE MATERIAL ON RECORD, WE FIND THAT THE ISSUE INVOLVED IN THE PRESENT APPEALS IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE IN RESPECT OF NASIK UNIT IN ITA NO. 377/PN/2009 FOR A.Y. 2007-08 BECAUSE IT PERTAINS TO THE SAME ASSESSEES GROUP FOR DIFFERENT UNIT WHICH WAS CONDU CTING THE BUSINESS IN SIMILAR MANNER. FACTS BEING SIMILAR, SO FOLLOWING THE SAME, WE RESTORE THE MATTER FOR ALL THE YEARS UNDER CONSIDERATION TO THE CIT(A) WITH SIMILAR DIRECTIONS AS GIVEN IN THE AFORESAID ORDER OF THE TRIBUNAL IN ITA NO. 377/PN/2009 DATED 1-6-2010. SO, THE CIT(A) WILL DECIDE THE ISSUE IN LIGHT OF OBSERVATIO NS OF ITAT IN A.Y. 2007-08 FOR SIMILARLY PLACED UNIT. 6 218 TO 221/PN/2010 MAHINDRA & MAHINDRA LTD A.Y. 2005-06 TO 2008-09 5. IN THE RESULT, THE APPEALS ARE ALLOWED FOR STAT ISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE 2011 S D/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER S D/ - (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE DATED THE 30 TH JUNE 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (A) I NASIK 4. THE CIT CENTRAL 4. THE D.R, A BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE