Liladhar Joshi, Lucknow V. I.T.O, Ward-1(4), Durgapur., Durgapur

ITA 2327/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4212 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 15-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 30-08-2013
• Court: TRIBUNAL
• Department Lawyers: RAJAT KUMAR KUREEL
• Assessee Lawyers: K K KHEMKA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI N.V.VASUDEVAN, JM & DR. A.L.SAINI, AM ./ ITA NO.2327/KOL/2013 ( / ASSESSMENT YEAR:2009-2010) LILADHAR JOSHI, PROP. L.D.JOSHI & CO., F-3, CHINHAT INDUSTRIAL AREA, CHINHAT, LUCKNOW-226019(UP) VS. ITO, WARD-2(2), DURGAPUR-713216(WB) ./ ./PAN/GIR NO. : ACZPJ 3538 P ( /APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI K.K.KHEMKA, ADVOCATE /REVENUE BY : SHRI RAJAT KUMAR KUREEL, JCIT / DATE OF HEARING : 24/11/2016 /DATE OF PRONOUNCEMENT 30/11/2016 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAIN ING TO THE ASSESSMENT YEAR 2009-2010, IS DIRECTED AGAINST AN O RDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS), DURGAPUR IN A PPEAL NO.223/CIT(A)/DGP/2011-12, DATED 23.04.2013, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER (AO) UN DER SECTION.143(3) OF THE INCOME TAX ACT 1961, (IN SHORT THE ACT), DATE D 30.12.2011. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEE HAD FILED HIS RETURN OF INCOME ON 29.09.2009 DECLARING TOTAL INCOME OF RS.10,24,717/-. LATER ON THE ASSESSEES CASE WAS SE LECTED FOR SCRUTINY U/S.143(3) OF THE INCOME TAX ACT. DURING THE YEAR U NDER CONSIDERATION, THE ASSESSEE HAS DERIVED THE INCOME BY MANUFACTURIN G AND TRADING. THE AO MADE ADDITION U/S.40(A)(IA) OF THE ACT OBSERVING THE FOLLOWINGS :- ITA NO.2327/13 LILADHAR JOSHI 2 THE ASSESSEE HAS SHOWN UN-SECURED LOAN OF RS.11,40, 518/- FROM INDIABULL FINANCIAL SERVICES LTD., LUCKNOW AS WELL AS RS.29,82,108/- FROM BARCLAYS BANK PLC, NEW DELHI IN THE BALANCE SHEET DURING THE YEAR UNDER CONSIDERATION. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, THE AR OF THE ASSESSEE FILE D THE RE- PAYMENT SCHEDULE WHEREIN IT HAS BEEN NOTICED THAT T HE ASSESSEE HAD PAID TOTAL INTEREST OF RS.8,65,300/-[RS.2,80,29 1/- PLUS RS. 5,85,009/-] ON INTEREST ACCOUNT. AS BOTH THE LOAN P ROVIDERS BEING NON BANKING FINANCIAL INSTITUTIONS, IT WAS MANDATOR Y ON THE PART OF THE ASSESSEE TO DEDUCT TAX AT SOURCE ON THE INTERES T COMPONENT OF THE E.M.IS AS PAID IN BOTH THE CASES. BUT THE ASSES SEE HAS FAILED TO DEDUCT TAX ON EMI PAYMENT WHICH CLEARLY CONTRAVENES THE PROVISIONS OF SECTION 40(A)(IA) OF THE I.T.ACT, 196 1 READ WITH SECTION 194A. HENCE, THE ENTIRE AMOUNT OF RS.8,65,300/- IS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 3. AGGRIEVED FROM THE ORDER OF LD. AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A), WHO HAS ALSO CONFIRMED THE A DDITION MADE BY THE AO, BY OBSERVING THE FOLLOWINGS :- 3. GROUND NO.1.: IN THIS GROUND THE APPELLANT IS DISPUTING THE A.O'S ACTION IN DISALLOWING INTEREST PAID BY HIM ON THE GROUND THAT NO TDS HAD BEEN DEDUCTED ON SUCH PAYMENTS. THE INTEREST IS SEE N TO HAVE BEEN PAID TO TWO ENTITIES. THESE ARE M/S. LNDIA BUL LS FINANCIAL SERVICES LTD AND M/S. BARCLAYS BANK PLC. THE A.O. I S SEEN TO HAVE MADE THIS DISALLOWANCE AS HE HAS TREATED THESE TWO ENTITIES AS NON BANKING FINANCIAL CORPORATIONS. IN COURSE OF APPELL ATE PROCEEDINGS NO SUBMISSION HAS BEEN MADE REGARDING THE STATUS OF M/S INDIA BULLS FINANCIAL SERVICES LTD. THE APPELLANT HAS CON TENDED THAT M/S. BARKLAYS BANK PLC IS NOT A NON-BANKING FINANCIAL IN STITUTION. HE HAS ALSO SUBMITTED COPY OF ORDER U/S.195(3) OF THE IT.A CT. 1961, ISSUED BY DCIT(INTERNATIONAL TAXATION) 3(2), MUMBAI, DATED 24.03.2011 WHEREBY, M/S. BARKLAYS BANK PLC HAS BEEN ALLOWED TO RECEIVE, WITHOUT DEDUCTION OF INCOME TAX, INTERESTS AND, ANY OTHER SUM, NOT BEING INTERESTS OR DIVIDENDS. THE STATUS OF M/S. BA RKLAYS BANK IN INDIA HAS NOT BEEN AMPLIFIED IN THE APPELLANT'S SUB MISSION. HOWEVER, THE ISSUE OF THE CERTIFICATE U/S.195(3) RA ISES A QUESTION REGARDING THE CLAIM MADE BY THE APPELLANT THAT THE SAID INSTITUTION IS NOT A NON-BANKING FINANCIAL CORPORATION. IF THAT WA S INDEED THE CASE THEN I DO NOT SEE THE NEED FOR THE SAID CERTIFICATE . THIS IS AN ISSUE WHICH HAS NOT BEEN CLARIFIED BY THE APPELLANT. THE CERTIFICATE AS SUCH IS VALID FOR THE F.YR.2011-12 AND NOT FOR THE YEAR ENDER APPEAL. IN VIEW OF THAT, THE DISALLOWANCE MADE BY THE A.O. IS CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. ITA NO.2327/13 LILADHAR JOSHI 3 4. NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A) , THE ASSESSEE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL :- 1) FOR THAT THE LD. COMMISSIONER OF INCOME TAX(APPE ALS) ERRED IN LAW AS WELL AS ON FACTS IN INVOKING PROVISIONS OF S EC.40(A)(IA) FOR INTEREST PAID TO THE FOLLOWING PARTIES :- (A) INDIA BULLS - RS.2,80,291/- (B) BARCLAYS BANK - RS.5,85,009/- TOTAL: RS.8,66,300/- ALTHOUGH THE ASSESSEE HAS CHALLENGED IN THIS APPEAL THE DISALLOWANCE U/S.40(A)(IA) OF THE ACT IN RESPECT OF (A) INDIA BU LLS AND (B) BARCLAYS BANK, BUT THE AT TIME OF HEARING THE MAIN GRIEVANCE OF TH E ASSESSEE HAS BEEN CONFINED TO THE DISALLOWANCE U/S.40(A)(IA) OF THE A CT IN RESPECT OF BARCLAYS BANK ONLY AND THE GROUND OF APPEAL RELATING TO INDI A BULLS HAS NOT BEEN PRESSED. 5. LD. AR FOR THE ASSESSEE HAS SUBMITTED THAT THE A SSESSEE COULD NOT PRODUCE THE TDS CERTIFICATE IN RELATION TO BARCLAYS BANK BEFORE THE AO, AT THE TIME OF ASSESSMENT PROCEEDINGS AS WELL AS DURIN G THE APPELLATE PROCEEDINGS BEFORE THE CIT(A), BECAUSE THE TDS CER TIFICATE WAS NOT AVAILABLE WITH THE ASSESSEE, THEREFORE, HE COULD NO T PRODUCE. LD. AR FOR THE ASSESSEE HAS REQUESTED US THAT NOW THE ASSESSEE HAS GOT TDS CERTIFICATE FROM BARCLAYS BANK IN RESPECT OF INTERE ST PAYMENT OF RS.5,85,009/-, WHICH THE ASSESSEE CAN PRODUCE BEFOR E THE AO FOR HIS NECESSARY EXAMINATION AND VERIFICATION. THEREFORE, THE LD AR REQUESTED THE US TO REMIT THE CASE BACK TO THE ASSESSING OFFI CER FOR HIS VERIFICATION. ITA NO.2327/13 LILADHAR JOSHI 4 6. LD. DR FOR THE REVENUE EVEN AGREED ON THE PROPOS ITIONS CANVASSED BY THE LD. AR TO REMIT THE CASE BACK TO THE AO, SO THAT, THE ASSESSEE CAN FILE THE TDS CERTIFICATE BEFORE THE AO FOR HIS NECE SSARY VERIFICATION. 7. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT I N THE SUBMISSIONS OF THE ASSESSEE, AS THE PROPOSITIONS CANVASSED BY THE LD. AR FOR THE ASSESSEE ARE SUPPORTED BY THE FACTS NARRATED BY HIM ABOVE. L D. AR FOR THE ASSESSEE HAS POINTED OUT THAT AT ASSESSMENT STAGE A ND AT APPELLATE PROCEEDINGS BEFORE THE CIT(A), HE COULD NOT PRODUCE THE TDS CERTIFICATE BECAUSE THE ASSESSEE DID NOT GET THE TDS CERTIFICAT E FROM CONCERNED PARTY. IN THE INTEREST OF JUSTICE, WE ARE OF THE VI EW THAT AO SHOULD EXAMINE THE TDS CERTIFICATES AND GIVE THE NECESSARY RELIEF TO THE ASSESSEE. THEREFORE, WE REMIT THE CASE BACK TO THE FILE OF TH E AO TO EXAMINE THE TDS CERTIFICATE AND GIVE NECESSARY RELIEF, IF ANY. WE ALSO DIRECT THE ASSESSEE TO PRODUCE THE TDS CERTIFICATE IN RESPECT OF BARCLAYS BANK LTD. BEFORE THE AO. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30/ 11/2016. SD/ - (N.V.VASUDEVAN) SD/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; $% DATED 30/11/2016 & ()* /PRAKASH MISHRA , . / PS ITA NO.2327/13 LILADHAR JOSHI 5 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) % & , / ITAT, 1. / THE APPELLANT-LILADHAR JOSHI 2. / THE RESPONDENT.-ITO WARD-2(2),DURGAPUR 3. 4 ( ) / THE CIT(A), DURGAPUR 4. 4 / CIT , DURGAPUR 5. 56 7 8 , 8 , / DR, ITAT, KOLKATA 6. 7 9 / GUARD FILE. 5 //TRUE COPY//