Porel Dass Water & Effluent Pvt. Ltd., Howrah V. The Income Tax Officer, Ward-1(4), Kolkata, Kolkata

ITA 2208/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9130 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 18-11-2016
• Court: TRIBUNAL
• Department Lawyers: MD GHAYAS UDDIN
• Section: 143(3)

Judgement Text

I.T.A. NO. 2208/KOL./2016 ASSESSMENT YEAR: 2010-2011 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 2208/KOL/ 2016 ASSESSMENT YEAR: 2010-2011 POREL DASS WATER & EFFLUENT CONTROL PVT. LIMITED,.. ...........APPELLANT HOWRAH INDUSTRIAL-CUM-COMMERCIAL COMPLEX, 24, BELILLIOUS ROAD, HOWRAH-711 101 [PAN: AAFCP 0496 F] -VS.- INCOME TAX OFFICER,................................ ..............................RESPONDENT WARD-1(4), KOLKATA, AAYAKAR BHAWAN, 7 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHRI SANJAY BHATTACHARYA, ADVOCATE, FOR THE ASSESSE E MD. GHAYAS UDDIN, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : MARCH 27, 2017 DATE OF PRONOUNCING THE ORDER : MARCH 31, 2017 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-18, KOLKATA DA TED 12.09.2016 AND THE SOLITARY ISSUE ARISING OUT OF THE SAME RELATES TO THE DISALLOWANCE OF ASSESSEES CLAIM FOR CREDIT OF TDS AMOUNTING TO RS. 6,48,946/-. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF CARRYING OUT CONTRACTUAL WORKS. AS PER THE AGREEMENT DATED 10.07.2009, IT HAD TAKEN OVER THE ENTIRE BUSI NESS OF M/S. A.K. DASS & CO., A PROPRIETARY CONCERN OF SHRI SOUMENDU PORE L. THE SAID PROPRIETARY CONCERN WAS AWARDED CONTRACT BY EXECUTI VE ENGINEER, BURDWAN DIVISION, GOVERNMENT OF WEST BENGAL AND ALT HOUGH THE WORK UNDER THE SAID CONTRACT WAS TAKEN OVER BY THE ASSES SEE-COMPANY FROM 15.07.2009 ITSELF AS PER THE AGREEMENT DATED 10.07. 2009, THE PRINCIPAL AGREED TO ASSIGN THE CONTRACT TO THE ASSESSEE-COMPA NY ONLY W.E.F. I.T.A. NO. 2208/KOL./2016 ASSESSMENT YEAR: 2010-2011 PAGE 2 OF 5 28.04.2010. MEANWHILE THE CONTRACT WORK WAS EXECUTE D BY THE ASSESSEE- COMPANY AND THE RECEIPTS FROM THE SAME WERE DULY TA KEN INTO ACCOUNT BY IT WHILE FILING THE RETURN FOR THE YEAR UNDER CONSI DERATION. THE CERTIFICATE FOR TAX DEDUCTED AT SOURCE FROM THE SAID RECEIPTS, HOWEVER, WAS ISSUED BY THE EXECUTIVE ENGINEER, BURDWAN DIVISION, GOVERNMEN T OF WEST BENGAL IN THE INDIVIDUAL NAME OF SHRI SOUMENDU POREL, PROPRIE TOR OF M/S. A.K. DASS & CO. THE ASSESSING OFFICER, THEREFORE, REFUSED TO GIVE CREDIT FOR THE SAID TDS TO THE ASSESSEE-COMPANY ON THE GROUND THAT THE RELEVANT TDS CERTIFICATE WAS ISSUED IN THE NAME OF PROPRIETARY C ONCERN AND NOT IN THE NAME OF ASSESSEE-COMPANY WHILE COMPLETING THE ASSES SMENT OF THE ASSESSEE-COMPANY UNDER SECTION 143(3) VIDE AN ORDER DATED 19.01.2013. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS), WHO UPHELD THE ACTION OF THE ASSESSIN G OFFICER IN DISALLOWING THE CLAIM OF THE ASSESSEE FOR CREDIT OF TDS AMOUNTING TO RS.6,48,946/- FOR THE FOLLOWING REASONS GIVEN IN PA RAGRAPH NO. 3 OF HIS IMPUGNED ORDER:- 3. IN THIS CASE ONLY ONE ISSUE IS INVOLVED. SRI S OUMENDU POREL [PROPRIETOR OF M/ S. A.K. DASS & CO. ] WAS AW ARDED CONTRACT BY EXECUTIVE ENGINEER, BURDWAN DIVISION, G OVT. OF WEST BENGAL. SUBSEQUENTLY THIS WORK WAS CLAIMED TO HAVE BEEN TAKEN OVER BY THE ASSESSEE COMPANY WITH EFFECT FROM 15.07.2009. ASSESSEE COMPANY WROTE TO THE EXECUTIVE ENGINEER, BURDWAN DIVISION FOR RAISING BILLS IN THE NAME OF T HE ASSESSEE COMPANY. HOWEVER, THIS LETTER WAS REFERRED FOR LEGA L OPINION. FINALLY, WITH EFFECT FROM 28.04.2010, MUNICIPAL AFF AIRS DEPARTMENT AGREED TO ASSESSEE'S REQUEST BY EXECUTIO N OF ASSIGNMENT AND NOVOTION AGREEMENT. ASSESSEE HAS CLA IMED THAT BILLS OF RS.1,85,34,000/ - AND RS.99,55,000/- WERE RAISED IN THE NAME OF THE PROPRIETARY CONCERN, M/S. A.K. DASS & C O., EVEN AFTER 15.07.2009 AND TDS CERTIFICATE OF RS.4,19,981 /- AND RS.2,28,695/- RESPECTIVELY, WERE ISSUED IN THE NAME OF THE PROPRIETARY CONCERN. APPELLANT HAS SUBMITTED THAT T HE RECEIPTS HAVE BEEN OFFERED FOR TAX IN COMPANY'S NAME. HENCE CREDIT FOR TDS OF RS.6,48,946/ - SHOULD BE ALLOWED TO THE ASSE SSEE. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE ASSESSEE. IT IS SEEN THAT WORK WAS AWARDED T O INDIVIDUAL IN THE NAME OF HIS PROPRIETARY CONCERN. WITH EFFECT FROM 15.07.2009, THIS WORK WAS CLAIMED TO HAVE BEEN EXEC UTED BY I.T.A. NO. 2208/KOL./2016 ASSESSMENT YEAR: 2010-2011 PAGE 3 OF 5 THE ASSESSEE COMPANY. HOWEVER, BEFORE DOING THAT AS SESSEE SHOULD HAVE TAKEN PRIOR PERMISSION OF THE MUNICIPAL AUTHORITIES. ASSESSEE'S REQUEST HAVE BEEN ACCEPTED IN THE NEXT FINANCIAL YEAR, WITH EFFECT FROM 28.04.2010. HENCE MUNICIPAL AUTHORITIES HAVE NOT TAKEN ANY COGNIGENCE OF WORK B EING EXECUTED BY THE ASSESSEE COMPANY DURING THE CURRENT YEAR. AS THE TDS CERTIFICATES ARE NOT IN THE NAME OF THE ASS ESSEE COMPANY, ITS CREDIT CANNOT BE GIVEN IN THE ASSESSME NT OF THE COMPANY, UNLESS THE ASSESSEE GETS THE NECESSARY REC TIFICATION DONE BY THE MUNICIPAL AUTHORITY IN THEIR TDS RETURN . UNDER THE CIRCUMSTANCES REQUEST OF ASSESSEE CANNOT BE ACCEPTE D. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT WHEN THE CORRESPONDING CONTRACT RECEIPTS WERE DULY TAKEN INT O ACCOUNT BY THE ASSESSEE-COMPANY WHILE FILING ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, THE CREDIT FOR TAX DEDUCTED AT SOURC E FROM THE SAID RECEIPTS SHOULD BE GIVEN TO THE ASSESSEE-COMPANY, EVEN THOUG H THE RELEVANT TDS CERTIFICATE WAS IN THE NAME OF THE PROPRIETARY CONC ERN. IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE DECISION OF THE HONBL E ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT VS.- BHOORATNAM & CO. [35 7 ITR 396 (A.P.)], WHEREIN THE DECISION OF THE TRIBUNAL GIVING CREDIT TO THE ASSESSEE OF THE TDS MENTIONED IN THE TDS CERTIFICATE ISSUED BY THE DEDUCTOR WAS UPHELD BY THE HONBLE ANDHRA PRADESH HIGH COURT DESPITE TH E FACT THAT THE SAID TDS CERTIFICATE WAS ISSUED IN THE NAME OF JOINT VEN TURE AND NOT IN THE NAME OF THE ASSESSEE-COMPANY. IT WAS HELD BY THE HO NBLE ANDHRA PRADESH HIGH COURT THAT THE CREDIT FOR TDS CERTIFIC ATE COULD NOT BE DENIED TO THE ASSESSEE WHILE ASSESSING CONTRACT RECEIPTS M ENTIONED IN THE SAID TDS CERTIFICATE AS INCOME OF THE ASSESESE. IT WAS F URTHER HELD THAT WHEN NO RETURN OF INCOME FOR THE RELEVANT YEAR WAS FILED BY THE JOINT VENTURE AND NO CREDIT FOR THE TDS AS MENTIONED IN THE RELEV ANT CERTIFICATE WAS ALLOWED TO THE JOINT VENTURE, IT WAS THE ASSESESE, WHICH WOULD BE ALLOWED CREDIT FOR SUCH TDS WHEN THE CORRESPONDING CONTRACT RECEIPTS AS MENTIONED IN THE TDS CERTIFICATE WERE ASSESSED AS I NCOME OF THE ASSESSEE. I.T.A. NO. 2208/KOL./2016 ASSESSMENT YEAR: 2010-2011 PAGE 4 OF 5 5. THE LD. D.R., ON THE OTHER HAND, INVITED MY ATTE NTION TO THE RELEVANT RULE 37BA(2) AND CONTENDED THAT THE CREDIT FOR TDS CAN BE ALLOWED IN THE HANDS OF A PERSON OTHER THAN THE DEDUCTEE IF THE WH OLE OR PART OF THE INCOME ON WHICH TAX HAS BEEN DEDUCTED AT SOURCE IS ASSESSABLE IN THE HANDS OF SUCH PERSON SUBJECT TO THE CONDITION THAT THE DEDUCTEE FILES A DECLARATION TO THE DEDUCTOR AND THE DEDUCTOR REPORT S THAT DEDUCTION IN THE NAME OF THE OTHER PERSONS IN THE INFORMATION RE LATING TO DEDUCTION OF TAX AS REFERRED TO IN SUB-RULE (1) OF RULE 37BA. HE CONTENDED THAT THE CREDIT FOR TDS GENERALLY IS AUTOMATICALLY ALLOWED T O THE DEDUCTEE IN WHOSE NAME THE TDS CERTIFICATE IS ISSUED ON THE BAS IS OF THE INFORMATION FURNISHED BY THE DEDUCTOR AND THE CONDITION STIPULA TED IN RULE 37BA(2) FOR CLAIMING TDS OTHER THAN THE DEDUCTEE IS TO ENSU RE THAT NO DOUBLE CREDIT IS CLAIMED OR ALLOWED FOR TDS. HE CONTENDED THAT SINCE THE SAID CONDITION IS NOT SATISFIED IN THE PRESENT CASE, THE ASSESESE IS NOT ENTITLED TO CLAIM CREDIT FOR THE TDS AS RIGHTLY HELD BY THE AUTHORITIES BELOW. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERU SED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NO DOUBT TRUE T HAT THE CONDITION STIPULATED IN RULE, I.E. 37BA(2) FOR CLAIMING CREDI T FOR TDS IN THE HANDS OF THE PERSON OTHER THAN THE DEDUCTEE IS TO AVOID ALLO WING DOUBLE CREDIT FOR TDS AMOUNT AS RIGHTLY CONTENDED BY THE LD. D.R. HOW EVER, AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE IN THIS REGARD, TH E CONCERNED PROPRIETOR SHRI SOUMENDU POREL HAS NOT CLAIMED CREDIT FOR TDS AMOUNT IN QUESTION NOR THE SAME HAS BEEN ALLOWED TO HIM EVEN BY THE DE PARTMENT. HE HAS SUBMITTED THAT THIS MATER CAN BE VERIFIED BY THE AS SESSING OFFICER TO ENSURE THAT THERE IS NO DOUBLE CRTEDIT ALLOWED FOR THE TDS AMOUNT IN QUESTION AND IF IT IS FOUND ON SUCH VERIFICATION TH AT NO CREDIT IS ALLOWED FOR THE TDS IN THE HANDS OF THE PROPRIETOR/INDIVIDU AL, THE CLAIM OF THE ASSESSEE FOR CREDIT OF SUCH TDS MAY BE ALLOWED. I F IND MERIT IN THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE AND SINCE THE LD. D.R. HAS ALSO NOT RAISED ANY OBJECTION IN THIS REGARD, I SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) AND RESTORE THE MATTE R TO THE FILE OF THE I.T.A. NO. 2208/KOL./2016 ASSESSMENT YEAR: 2010-2011 PAGE 5 OF 5 ASSESSING OFFICER FOR DECIDING THE SAME AFRESH AFTE R NECESSARY VERIFICATION. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 31, 201 7. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 31 ST DAY OF MARCH, 2017 COPIES TO : (1) POREL DASS WATER & EFFLUENT CONTROL PVT. LIMITED, HOWRAH INDUSTRIAL-CUM-COMMERCIAL COMPLEX, 24, BELILLIOUS ROAD, HOWRAH-711 101 (2) INCOME TAX OFFICER, WARD-1(4), KOLKATA, AAYAKAR BHAWAN, 7 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-18, KOLK ATA; (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.