I.T.O Wd - 4(3),kolkata, Kolkata V. M/s Ashirwad Vanijya Pvt. Ltd., Kolkata

ITA 2379/KOL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1614 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 13-04-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 17-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SITAL CHANDRA DAS A DDL CIT LD
• Assessee Lawyers: SUBASH AGARWAL LD
• Keywords: Procedural lapse
• Section: 5(2); 133(6)

Judgement Text

1 ITA NO. 2379/KOL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KO LKATA BEFORE: SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUD ICIAL MEMBER I.T.A NO. 2379/KOL /2013 A.Y: 200 5-06 I.T.O., WARD 4(3), KOLKATA VS. M/S. ASHIRWAD V ANIJYA PVT. LTD PAN:AACCA 1354L [APPELLANT] [RESPONDENT] FOR THE APPELLANT : SHRI SITAL CHANDRA DAS, A DDL.CIT, LD.SR.DR FOR THE RESPONDENT : SHRI SUBASH AGARWAL, ADVOC ATE, LD.AR DATE OF HEARING : 15-06-2017 DATE OF PRONOUNCEMENT : 23-08-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-IV, KOLKATA DT . 18-06-2013 FOR THE A.Y 2005-06. 2. THE ONLY ISSUE TO BE DECIDED AS TO WHETHER THE C IT-A IS JUSTIFIED IN DELETING THE DISALLOWANCE MADE U/S.40(A)(IA) OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS CASE ARE THAT THE ASSESS EE IS A COMPANY AND A CONTRACTOR. THE ASSESSEE GOT CONTRACT WORKS FROM M/S. ISPTAT INDUSTRIES LTD AND M/S. ISPTAT METALLICS (I) LTD. T HE ASSESSEE HAS GIVEN SUB-CONTRACTS TO TWO PARTIES NAMELY M/S. ENGI NEERING PROFESSIONAL CO. P.LTD (FOR RS.1,61,41,140/-) AND M /S. FORWARD BUILDERS & CONTRACTORS P. LTD( FOR RS.1,23,60,430/- ). THE AO FOUND THAT THE ASSESSEE PAID RS. 1,61,41,140/- TO M/S. EN GINEERING PROFESSIONAL CO. P.LTD WITHOUT DEDUCTING THE TDS A ND PAID RS. 1,23,60,430/- TO M/S. M/S. FORWARD BUILDERS & CONTR ACTORS P. LTD WITHOUT DEDUCTING LOW TDS. THE AO DISALLOWED RS. 1, 61,41,140/- AND RS. 1,17,69,049/- TOTALING TO RS.2,79,10,189/- FOR THE PAYMENT OF 2 ITA NO. 2379/KOL/2013 M/S. ENGINEERING PROFESSIONAL CO. P. LTD AND M/S. F ORWARD BUILDERS & CONTRACTORS U/SEC. 40(A)(IA) OF THE ACT AND ADDED T HE SAME TO THE TOTAL INCOME OF THE ASSESSEE VIDE HIS ORDER PASSED U/S. 147/143(3) OF THE ACT DT. 31-12-2010. 4. THE ASSESSEE CHALLENGED THE SAME BEFORE THE CIT- A. BEFORE HIM THE ASSESSEE FILED NIL DEDUCTION OF TDS CERTIFICATE ISSUED BY THE REVENUE (ITO, WARD 1(2), SURAT IN RESPECT OF M/S. E NGINEERING PROFESSIONAL CO. PVT. LTD AND TDS CERTIFICATE ISS UED BY ITO, WARD 592), SURAT FOR LOWER DEDUCTION OF TDS IN RESPECT O F M/S. FORWARD BUILDERS & CONTRACTORS. CONSIDERING THE SUBMISSION S OF ASSESSEE THE CIT-A DELETED THE IMPUGNED ADDITION MADE BY THE AO U/S. 40(A)(IA) BY STATING AS UNDER:- 5.3. I HAVE CAREFULLY CONSIDERED THE SUBMISSION PUT FORTH ON BEHALF OF THE APPELLANT ALONG WITH THE SUPPORTING DOCUMENTS FURNISHED, PERUSED TH E FACTS OF THE CASE INCLUDING THE IMPUGNED ASSESSMENT ORDER, ASSESSMENT FOLDER FOR TH E ASSESSMENT YEAR 2005-2006 AND OTHER MATERIALS BROUGHT ON RECORD. I FIND AS UNDER: - THE APPELLANT FURNISHED THE FOLLOWING DOCUMENTS DUR ING THE APPELLANT PROCEEDINGS. 1. COPY OF CERTIFICATE ISSUED BY THE ITO WARD 1(2), SURAT TO M/S. ENGINEERING PROFESSIONAL CO. PVT. LTD. FOR 'NIL / DEDUCTION CERTIFICATE. 2. COPY OF CERTIFICATE ISSUED BY THE ITO WARD 5(2), SURAT TO M/S. FORWARD BUILDERS & CONTRACTORS FOR LOWER DEDUCTION CERTIFICATE. 3. COPIES OF THE LEDGER ACCOUNTS OF M/S. ENGINEERIN G PROFESSIONAL CO. PVT. LTD., M/S. FORWARD BUILDERS & CONTRACTORS, M/S. ISPAT METALLIC S (INDIA) LTD AND M/S. ISPAT INDUSTRIES LTD FOR THE ASSESSMENT YEAR 2005-2006 AND FOR THE A SSESSMENT YEAR 2006-2007. 4. LETTER OF CONFIRMATIONS RECEIVED FROM M/S. ENGIN EERING PROFESSIONAL CO. PVT. LTD. AND M/S. FORWARD BUILDERS & CONTRACTORS. 5. COPIES OF TDS CERTIFICATES RECEIVED FROM M/S. IS PAT INDUSTRIES LTD AND M/S. ISPAT METALLICS (INDIA) LTD. THE TOTAL AMOUNT OF TDS DEDU CTED BY BOTH THE COMPANIES WERE IN AGGREGATE OF RS. 611776/-. THE FOLLOWING DOCUMENTS IN THE ASSESSMENT FOLDER WE RE ALSO EXAMINED: 1. ALL THE ORIGINAL TDS CERTIFICATES AMOUNTING TO R S. 611766/- RECEIVED FROM M/S. ISPAT INDUSTRIES LTD AND M/S. ISPAT METALLICS (INDIA) LTD . THE REFUND WERE ISSUED TO THE APPELLANT AFTER PROPER VERIFICATION. 2. COPY OF LETTER NO. 4(3)/AACC4 1354 L/KO1/1080 DA TED 23.11.2007 ISSUED BY THE AO TO THE APPELLANT STATING THAT LETTERS U/S. 133(6) OF T HE INCOME TAX ACT;, 1961 WERE SENT TO THE PARTIES WHICH WERE DULY SERVED BUT NO REPLY HAS BEEN RECEIVED. 3. COPY OF REPLY OF THE APPELLANT DATE 28.11.2007 I N RESPONSE TO THE LETTER ISSUED AT SL. NO. 2 ABOVE. 4. COPY OF THE REPLY RECEIVED BY THE AO FROM ITO WA RD 1(2) SURAT CONFIRMING THE GENUINENESS FOR ISSUANCE OF 'NIL DEDUCTION CERTIFI CATE VIDE LETTER NO. ITO/WD 1(2)/ENGG. PROF/09-10 DATED 14.12.2009 IN THE NAME OF M/S. ENG INEERING PROFESSIONAL CO. PVT. LTD. 3 ITA NO. 2379/KOL/2013 5. COPY OF THE REPLY RECEIVED BY THE AO FROM ITO WA RD 5(2), SURAT FOR ISSUANCE OF LOWER DEDUCTION CERTIFICATE VIDE LETTER NO. SRT/ITO /WARD5(2)/2009-10 DATED 14.12.2009 IS REPRODUCED HEREWITH: 'SUB: ISSUE OF CERTIFICATE U/S. 197 IN FAVOUR OF M/ S. ENGINEERING PROFESSIONAL CO. PVT. LTD. KINDLY REFER TO YOUR OFFICE LETTER NO. ITO/4(3) /KOL/2009-10 DATED 02.12.2009 IN THIS CONNECTION IT IS SUBMITTED THAT REGISTER OF ISSUE OF CERTIFICATE U/S. 197 COULD NOT BE TRACED OUT FOR THE SAID PERIOD. SHRI VIVEK JOHRI, I TO WAS POSTED TO THIS WARD DURING THE SAID PERIOD. HOWEVER IN ABSENCE OF ANY DOCUMENT TO CONFIRM THE SAME, I ENCLOSE HEREWITH PHOTO STATE COPY OF REFUND ORDER AND INTIMATION WHI CH BEARS THE SIGNATURE AND STAMP OF SHRI VIVEK JOHRI FOR YOUR VERIFICATION IN THIS REGA RD. DELAY CAUSED IS HIGHLY REGRETTABLE YOURS FAI THFULLY R.S. MEENA I.T.O WARD-5(2), SURAT 3.4. IT APPEARS FROM THE ABOVE LETTER OF THE AO THA T THE QUARRY IN RESPECT OF ISSUANCE OF LOWER DEDUCTION CERTIFICATE WAS RELATED TO M/S. ENG INEERING PROFESSIONAL CO. PVT. LTD. INSTEAD OF M/S. FORWARD BUILDERS & CONTRACTORS. IT IS ALSO OBSERVED FROM THE REFUND ORDER AND INTIMATION SENT BY THE ITO WARD 5(2), SURAT WHI CH BEARS SIGNATURE OF THE THEN ITA WARD 5(2) AND SAME IS TALLIED WITH THE SIGNATURE ON THE LOWER DEDUCTION CERTIFICATE ISSUED BY THE SAID ITO IN FAVOUR OF M/S. FORWARD BUILDERS & CONTRACTORS. ON PERUSAL OF THE NIL/LOWER DEDUCTION CERTIFICATES IT IS CLEARLY MENT IONED IN THE ANNEXURE TO BOTH THE CERTIFICATES WHICH FORMS PART OF THE SAID CERTIFICA TES, THE DATE OF CONTRACT I.E. 01.04.2004 AND DATE BY WHICH WORK ON THE CONTRACT WOULD BE COM PLETED I.E. 31.03.2005 AGAINST THE NAME OF THE APPELLANT. 3.5. IT HAS BEEN ARGUED BY THE A.O. THAT THE TDS CE RTIFICATE CANNOT BE RELIED UPON AS THEY WERE NOT ISSUE U/S. 197 BUT INSTEAD ISSUED U/S. 194 C. BUT ANY CLERICAL OR PROCEDURAL LAPSE BY ANY OFFICER OF THE INCOME TAX DEPARTMENT CANNOT BE ASSIGNED AS A REASON FOR DISALLOWANCE OR ADDITION IN THE HANDS OF A RIGHTFUL ASSESSEE. THE COPIES OF LEDGER ACCOUNT, LETTER OF CONFIRMATIONS AND ORIGINAL TDS CERTIFICAT ES AMOUNTING TO RS. 6,11,776/- WHICH ARE PLACED IN THE ASSESSMENT FOLDER ARE A CLEAR INDICAT ION OF CONTRACT VALUE EXECUTED AND AMOUNT PAID IN THE FINANCIAL YEAR 2004- 2005 CORRES PONDING TO ASSESSMENT YEAR 2005- 2006. IT IS OBSERVED FROM THE ASSESSMENT FOLDER THA T NOTICES U/S. 133(6) WERE DULY ISSUED ON M/S. ENGINEERING PROFESSIONAL CO. PVT. LTD AND M /S. FORWARD BUILDERS & CONTRACTORS VIDE AOS LETTER NO. 4(3)/AACCA 1354 L/KOL.1080 DATED 23 .11.2007. IN THE LIGHT OF THE ABOVE DISCUSSION AND FINDING AND ON GOING THROUGH THE DET AILED FACTS AND MATERIALS ON ASSESSMENT FOLDER I FIND THAT THE ALLEGATIONS MADE BY THE AO IN THE IMPUGNED ASSESSMENT ORDER ARE NOT SUSTAINABLE AND AS SUCH I AM OF THE V IEW THAT DELETING THE ADDITIONS OF RS.2,79,10,189/- MADE BY THE LD. ASSESSING OFFICER U/S. 40(A)(IA) OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF PAYMENT TO SUB-CONTRACTORS IS NE CESSARY. THIS GROUND OF APPEAL IS ALLOWED. 5. THE LD. DR RELIED ON THE ORDER OF THE AO AND PRA YED TO ALLOW THE GROUNDS RAISED BY THE REVENUE. ON THE OTHER HAND, T HE LD.AR REITERATED THE SUBMISSIONS MADE BEFORE THE CIT-A AN D REFERRED TO PAGE 7 OF THE PAPER BOOK AND SUBMITTED THE COPIES O F LEDGER ACCOUNT FOR F.Y 2004-05 RELEVANT TO A.Y UNDER CONSIDERATION WERE FILED BEFORE THE AO IN RESPECT OF THE SAID PARTIES, BUT THE AO DID NOT CONSIDER THE SAME IN HIS PERSPECTIVE. HE ALSO REFERRED TO PAGE 1 OF THE PAPER BOOK AND SUBMITTED THAT ITO, WARD 1(2), SURAT ISSUED C ERTIFICATE TO THE ASSESSEE FOR DEDUCTION OF TDS AT NIL IN RESPECT OF M/S. ENGINEERING PROFESSIONAL CO. PVT. LTD AND REFERRED TO PAGE 2 OF THE PAPER BOOK 4 ITA NO. 2379/KOL/2013 AND SUBMITTED TO DEDUCT TDS @ 0.10% ON THE AMOUNT O F CONTRACT IN RESPECT OF M/S. FORWARD BUILDERS & CONTRACTORS. HE RELIED ON THE ORDER OF THE CIT-A AND PRAYED TO DISMISS THE GROUND(S) OF APPEAL RAISED BY THE APPELLANT REVENUE. 6. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE CIT-A CONSIDERING THE CERTIFICATES ISSUED FOR DEDUCTION OF TDS AT NIL AND AT LOWER RATE IN RESPEC T OF SAID TWO PARTIES. BEFORE US THE LD.AR OF THE ASSESSEE ALSO F ILED THE COPIES OF SAID CERTIFICATES ISSUED BY THE ITO, WARD 1(2), SUR AT AND ITO, WARD 5(2), SURAT IN RESPECT OF M/S. ENGINEERING PROFESSI ONAL CO.PVT. LTD AND M/S. FORWARD BUILDERS & CONTRACTORS AVAILABLE IN THE PAPER BOOK. WE FIND THAT THE CIT-A DISCUSSED THE ISSUE IN DETA IL AND CONSIDERED THE MATERIAL EVIDENCE ON RECORD. THUS, HE WAS JUSTI FIED IN DELETING THE IMPUGNED ADDITION MADE U/S. 40(A)(IA) OF THE ACT ON THIS ISSUE. WE UPHOLD THE SAME ON THIS ISSUE. THE GROUND(S) RAISE D BY THE REVENUE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23-08-2017 SD/- SD/- J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 23-08-2017 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/REVENUE: THE I T O, WARD 4(3), AAYKAR BHA WAN, 8 TH FLOOR, P-7 CHOWRINGHEE SQUARE, KOLKATA-69. 2 RESPONDENT/ASSESSEE: M/S. ASHIRWAD VANIJYA PVT. LTD 7A BENTINCK ST., 1 ST FLOOR, KOLKATA-1 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR.PS/H.O.O ITAT KOLKATA 5 ITA NO. 2379/KOL/2013