Chola Business Services Ltd., CHENNAI V. DCIT Corporate Circle 1(2), CHENNAI

ITA 2299/CHNY/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3249 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 03-08-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: TDS
• Section: 40(a)(ia)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI , ! . , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ! ./ ITA NO.2299/CHNY/2018 # /ASSESSMENT YEAR: 2015-16 M/S. CHOLA BUSINESS SERVICE LIMITED NO.2, DARE HOUSE, NSC BOSE ROAD PARRYS, CHENNAI 600 001 [PAN: AACCC 5400D] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX CORPORATE CIRCLE-1(2) CHENNAI 600 034 ( /APPELLANT) ( $%& /RESPONDENT) & ' ( / APPELLANT BY : SHRI R. VIJAYARAGHAVAN, ADVOCATE $ %& ' ( /RESPONDENT BY : SHRI A.R.V. SREENIVASAN, JCIT-DR ) ' *+ /DATE OF HEARING : 14.11.2019 ,-# ' *+ / DATE OF PRONOUNCEMENT : 14.11.2019 . / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-1, CHENNAI IN APPEAL NO.ITA NO.45/CIT(A)-1/2017-18 DATED 30.05.2018 FOR THE ASS ESSMENT YEAR 2015-16. ITA NO.2299/CHNY/2018 :- 2 -: 2. SHRI R. VIYAYARAGHAVAN, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI A.R.V. SREENIVASAN, JCIT REPRESEN TED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LEARNED AUTHORIZED REPRE SENTATIVE THAT THE ONLY ISSUE IN THE ASSESSEES APPEAL WAS AGAINST THE ACTI ON OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING AN ADDITION BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME T AX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT) TO DISALLOW THE ASSESSEES C LAIM OF PAYMENT OF INSURANCE PREMIUM IN RESPECT OF THE EMPLOYEES OF THE ASSESSEE S COMPANY FOR NON- DEDUCTION OF TDS U/S.192 OF THE ACT. IT WAS SUBMIT TED BY THE LEARNED AUTHORIZED REPRESENTATIVE THAT THE ASSESSEE HAD MAD E PAYMENT FOR VARIOUS INSURANCE ORGANIZATIONS FOR GROUP TERM LIFE POLICY AND GROUP ACCIDENT POLICY AND GROUP HEALTH POLICY, GROUP MEDI-CLAIM POLICY, G ROUP GRATUITY SCHEME POLICY AND GROUP GRATUITY CASH ACCUMULATION PLAN. IT WAS SUBMITTED THAT BOTH THE ASSESSING OFFICER AN D THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS UNDERSTOOD THE PAYMENT OF THE INSURANCE PREMIUM AS BEING TOWARDS KEYMAN INSURANCE POLICY. IT WAS A SUBMISSION THAT THE INSURANCE POLICY WHICH HAS BEEN PAID FOR BY THE ASSESSEE WERE NOT KEYMAN INSURANCE POLICY BUT WERE GROUP POL ICIES IN RELATION TO ALL THE EMPLOYEES OF THE ASSESSEES COMPANY. IT WAS A SUBM ISSION THAT THE SAID INSURANCE PREMIUM PAID DID NOT FALL WITH THE PROVIS IONS OF SECTION 17(2) OF THE ACT AND CONSEQUENTLY WAS NOT PERQUISITE IN THE HAND S OF THE EMPLOYEES WHICH REQUIRE THE DEDUCTION OF TDS U/S.192 OF THE ACT. I T WAS THE PRAYER THAT AS THE ITA NO.2299/CHNY/2018 :- 3 -: INSURANCE PREMIUM PAID WAS NOT PERQUISITE U/S.17(2) OF THE ACT, THE DISALLOWANCE WAS NOT CALLED FOR. 4. IN REPLY, THE LEARNED DEPARTMENTAL REPRESENTATI VE SUBMITTED THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS CA LLED FOR THE DETAILS OF THE INSURANCE POLICIES WHICH WERE NOT PRODUCED BEFO RE HIM. IT WAS A SUBMISSION THAT HE HAS NO OBJECTION IF THE ISSUE WA S RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AS TO WHETHER TH E INSURANCE PREMIUM PAID WAS TOWARDS THE KEYMAN INSURANCE OR WHETHER IT WAS TOWARDS GROUP INSURANCE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND PERU SED THE MATERIALS AVAILABLE ON RECORD. 6. THE PERUSAL OF THE ORDER OF THE LEARNED COMMISSI ONER OF INCOME TAX (APPEALS) CLEARLY SHOWS THAT BEFORE THE LEARNED COM MISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE WAS SPECIFICALLY REQUESTED TO PRODUCE ALL THE INSURANCE POLICIES AND EVIDENCES FOR THE PREMIUM AM OUNTS PAID TO SUPPORT THE CONTENTION THAT THE PREMIUM WAS NOT IN THE NATURE O F PERQUISITES IN THE HANDS OF THE EMPLOYEES. THE INSURANCE POLICIES THAT WERE REQUESTED FOR, WERE NOT PLACED ON RECORD. THIS BEING SO, WE FIND SUBSTANCE IN THE SUBMISSIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE AND THE ISSUE I N THIS APPEAL IS LIABLE TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FO R RE-ADJUDICATION. THE ASSESSEE IS TO PRODUCE COPIES OF THE INSURANCE POLI CIES TO PROVE HIS CLAIM THAT THE INSURANCE POLICIES ARE NOT IN THE NATURE OF KEY MAN INSURANCE POLICIES BUT, ITA NO.2299/CHNY/2018 :- 4 -: ARE FOR THE GROUP INSURANCE OF HIS EMPLOYEES. IF, THE ASSESSEE IS ABLE TO SHOW THAT THE POLICIES ARE GROUP INSURANCE POLICIES, THE N OBVIOUSLY THE SAME WOULD NOT FALL WITHIN THE TERMS OF SECTION 17(2) OF THE A CT AND WOULD NOT BE PERQUISITES AND CONSEQUENTLY WOULD NOT REQUIRE THE DEDUCTION OF TDS U/S.192 OF THE ACT. HOWEVER, IF THE INSURANCE PREMIUM PAID IS IN RESPECT OF THE KEYMAN INSURANCE POLICY, ADMITTEDLY THE SAME WOULD BE THE PERQUISITE AND THE DISALLOWANCE STANDS CONFIRMED. 7. HENCE, THE ISSUE IS RESTORED TO THE FILE OF T HE ASSESSING OFFICER FOR RE- ADJUDICATION IN LINE WITH THE DIRECTIONS GIVEN ABOV E AND AFTER GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE ITS C LAIM. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH NOVEMBER, 2019 IN CHENNAI. SD/- ( . ) ( S. JAYARAMAN ) + /ACCOUNTANT MEMBER /CHENNAI, /! /DATED: 14 TH NOVEMBER, 2019 . IA, SR. PS SD/- ( ) (GEORGE MATHAN) /JUDICIAL MEMBER . ' $*01 21#* /COPY TO: 1. & /APPELLANT 2. $%& /RESPONDENT 3. ) 3* ( )/CIT(A) 4. ITA NO.2299/CHNY/2018 :- 5 -: ) 3* /CIT 5. 1 45 $* /DR 6. 56 7 /GF