Ms/ Sysnet Associates India Private Limited, Bengaluru V. The Income Tax Officer, Ward- 6(1)(4), Bengaluru

ITA 2294/BANG/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4084 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-02-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 01-11-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: N O N E
• Keywords: Rectification of order; TDS

Judgement Text

ITA NO.2294/BANG/2019 SYSNET ASSOCIATES INDIA PVT. LTD., BANGALORE IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: BANGALORE BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.2294/BANG/2019 ASSESSMENT YEAR: 2013-14 SYSNET ASSOCIATES INDIA PVT. LTD. ROOM NO.259, 2 ND FLOOR, BMTC BUILDING KORAMANGALA 6 TH BLOCK BENGALURU PAN NO : AAECS2600K VS. ITO WARD-6(1)(4) BENGALURU APPELLANT RESPONDENT APPELLANT BY : N O N E RESPONDENT BY : SHRI KANNAN NARAYANAN, D.R. DATE OF H EARING : 15.02.2021 DATE OF PRONOUNCEMENT : 15.02.2021 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 26-08-2019 PASSED BY LD CIT(A)-6, BENGALURU AND IT RELATES TO THE ASSESSMENT YEAR 2013-14. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE, EVE N THOUGH THE NOTICE OF HEARING SENT BY THE REGISTRY BY REGISTERED POST HAS BEEN DULY ACKNOWLEDGED. HENCE WE PROCEED TO DISPOSE OF THE A PPEAL, EX-PARTE WITHOUT THE PRESENCE OF THE ASSESSEE. ITA NO.2294/BANG/2019 SYSNET ASSOCIATES INDIA PVT. LTD., BANGALORE PAGE 2 OF 4 3. FROM THE GROUNDS OF APPEAL, WE NOTICE THAT TH E ASSESSEE PRAYS FOLLOWING EFFECTIVE RELIEFS:- (A) GRANTING FULL CREDIT OF TDS OF RS.8,25,002/- (B) GRANTING OF CREDIT OF REGULAR ASSESSMENT TAX O F RS.1,73,600/- PAID BY THE ASSESSEE. 4. WE HEARD LD DR AND PERUSED THE RECORD. THE FACTS THAT LED TO THE ABOVE SAID DISPUTES ARE DISCUSSED IN BRIEF. TH E ASSESSEE ENTERED INTO A CONTRACT WITH M/S WIPRO LTD FOR SUPPLYING LI CENCE TO USE CERTAIN SOFTWARE. THE CONTRACT WAS ENTERED FOR AN AMOUNT OF RS.82,50,016/-. M/S WIPRO LTD DEDUCTED TDS OF RS.8 ,25,002/-. 5. THE AO NOTICED THAT THE ASSESSEE DID NOT DEC LARE THE ABOVE SAID AMOUNT OF RS.82,50,016/- AS ITS SALES, EVEN THOUGH IT HAD CLAIMED DEDUCTION OF TDS AMOUNT OF RS.8,25,002/-. HENCE TH E AO CALLED FOR EXPLANATIONS FROM THE ASSESSEE. IT WAS EXPLAINED B Y THE ASSESSEE THAT IT HAS RECEIVED A SUM OF RS.45,37,508/- ONLY F ROM WIPRO AND THE SAME HAS BEEN SHOWN AS ADVANCE BY THE ASSESSEE. IT WAS SUBMITTED THAT THE CONTRACT COULD NOT BE COMPLETED, IN VIEW O F THE DISPUTE THAT DEVELOPED BETWEEN THE ASSESSEE AND M/S WIPRO. SINC E THE TRANSACTION WAS NOT COMPLETED, IT WAS SUBMITTED THA T THE ASSESSEE DID NOT RECOGNISE THE INCOME. HOWEVER, THE ASSESSE E DID NOT FURNISH ANY DOCUMENT IN SUPPORT OF THE ABOVE SAID SUBMISSIO NS AND HENCE THE AO ASSESSED THE ABOVE SAID AMOUNT OF RS.82,50,0 16/- AS INCOME OF THE ASSESSEE AND GAVE TDS CREDIT OF RS.8,25,002/ -. ACCORDINGLY, THE AO RAISED A DEMAND OF RS.19,26,637/- 6. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BY FILING APPEAL BEFORE LD CIT(A). IN THE MEAN TIME, THE ASSESSEE F ILED A RECTIFICATION PETITION BEFORE THE AO SEEKING ADJUSTMENT OF BROUGH T FORWARD LOSSES. THE AO PASSED THE RECTIFICATION ORDER DATED 17-06-2 016 GIVING SET OFF OF THE LOSSES BROUGHT FORWARD. ACCORDINGLY, THE DE MAND CAME TO BE ITA NO.2294/BANG/2019 SYSNET ASSOCIATES INDIA PVT. LTD., BANGALORE PAGE 3 OF 4 REDUCED TO RS.1,73,599/-. ACCORDING TO THE ASSESSE E IT HAS PAID THE ABOVE SAID DEMAND. 7. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) DIRECTED THE AO TO RECOGNISE THE REVENUE TO THE EXTENT OF RS.45,37,508 /-, I.E., TO THE EXTENT RECEIVED BY THE ASSESSEE. THE LD CIT(A) ALS O DIRECTED THE AO TO ALLOW PROPORTIONATE CREDIT OF TDS AMOUNT. ACCO RDINGLY, THE AO PASSED THE ORDER ON 14.10.2019 TO GIVE EFFECT THE O RDER OF LD CIT(A). IN THAT ORDER, THE AO RAISED A DEMAND OF RS.3,99,93 0/-. THE AO GAVE PROPORTIONATE TDS CREDIT OUT OF TDS AMOUNT OF RS.8,25,002/- DEDUCTED BY WIPRO LTD. HOWEVER, THE DID NOT GIVE C REDIT OF RS.1,73,600/- CLAIMED TO HAVE BEEN PAID BY THE ASSE SSEE, BEING THE DEMAND RAISED IN THE RECTIFICATION ORDER PASSED BY THE AO. 8. THE FIRST ISSUE CONTESTED BY THE ASSESSEE RE LATES TO THE NON- GRANTING OF FULL TDS AMOUNT OF RS.8,25,002/-. WE N OTICE THAT THE PROVISIONS OF RULE 37BA OF I T RULES GOVERN THE GRA NTING OF TDS CREDIT. WE NOTICE THAT THE LD CIT(A) HAS GIVEN DIR ECTION TO THE AO TO ALLOW PROPORTIONATE AMOUNT OF TDS CREDIT WITHOUT RE FERRING TO THE PROVISIONS OF RULE 37BA. HENCE WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES TO BE EXAMINED AT THE END OF AO AFRESH IN ACCORDANCE WITH THE PROVISIONS OF RULE 37BA. ACCORDINGLY, WE SET A SIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND RESTORE THE S AME TO THE FILE OF THE AO. 9. THE SECOND ISSUE CONTESTED BY THE ASSESSEE R ELATES TO NON- GRANTING OF CREDIT FOR REGULAR TAX OF RS.1,73,600/- PAID BY THE ASSESSEE IN THE ORDER GIVING EFFECT PASSED BY THE A O TO GIVE EFFECT TO THE ORDER PASSED BY LD CIT(A). SINCE THIS CLAIM OF THE ASSESSEE REQUIRES VERIFICATION OF FACTS, WE RESTORE THIS ISS UE ALSO TO THE FILE OF THE AO. ITA NO.2294/BANG/2019 SYSNET ASSOCIATES INDIA PVT. LTD., BANGALORE PAGE 4 OF 4 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH FEB, 2021 SD/- (BEENA PILLAI) JUDICIAL MEMBER SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 15 TH FEB, 2021. VG/SPS COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.