M/s.Kerala Transport Co., Calicut V. The ACIT, Calicut

ITA 251/COCH/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7272 (ITAT-COCHIN)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 30-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: TM SREEDHARAN LD SR
• Keywords: Non-deduction of tax
• Section: 148

Judgement Text

1 ITA NO.251/COCH/2014 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI CHANDRA PO OJARI (AM) I.T.A NO. 251/COCH/2014 (ASSESSMENT YEAR 2007-08) M/S KERALA TRANSPORT COMPANY VS THE ACIT, CIR.1(1) YMCA ROAD, KOZHIKODE KOZHIKODE PAN : AADFK0173H (APPELLANT) (RESPONDENT) I.T.A NO. 262/COCH/2014 (ASSESSMENT YEAR 2007-08) THE DY.CIT, CIR.1(1) VS M/S KERALA TRANSPORT CO KOZHIKODE KOZHIKODE (APPELLANT) (RESPONDENT) ASSESSEE BY :SHRI TM SREEDHARAN, LD.SR COUNSEL RESPONDENT BY : SHRI M ANIL KUMAR, CIT / SMT. LATHA V KUMAR, JR DR DATE OF HEARING : 15-09-2014 DATE OF PRONOUNCEMENT : 30-10-2014 O R D E R PER N.R.S. GANESAN (JM) BOTH THE APPEALS OF THE ASSESSEE AND THE REVENUE A RE DIRECTED AGAINST THE ORDER PASSED BY CIT(A), KOZHIKODE DATED 05-03-2014 AND PERTAINS TO ASSESSMENT YEAR 2007-08. BOTH THE APPE ALS ARISE OUT OF THE 2 ITA NO.251/COCH/2014 SAME ORDER OF THE CIT(A), THEREFORE, WE HEARD THEM TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER. 2. LET US FIRST TAKE THE ASSESSEES APPEAL IN ITA N O.251/COCH/2014. 3. THE FIRST GROUND OF APPEAL IS WITH REGARD TO REO PENING OF THE ASSESSMENT U/S 148 OF THE ACT. 4. WE HEARD SHRI T.M. SREEDHARAN, THE LD.SENIOR COU NSEL FOR THE ASSESSEE AND SHRI M ANIL KUMAR, THE LD.DR. IT IS N OT IN DISPUTE THAT THE ASSESSMENT WAS REOPENED WITHIN FOUR YEARS BY ISSUIN G A NOTICE ON 24-04- 2012. AFTER COMPLETION OF THE ASSESSMENT U/S 143(3 ) THE ASSESSING OFFICER RECEIVED AIR INFORMATION IN RESPECT OF FREIGHT CHAR GES PAID TO M/S GEEP BATTERIES INDIA PVT LTD, ACME CHEMICALS (P) LTD AND VIKRAM SARABHAI SPACE CENTRE (VSSC). THE ASSESSEE HAS NOT DEDUCTED TAX FOR PAYMENT OF FREIGHT CHARGES. THIS TRIBUNAL IS OF THE CONSIDERE D OPINION THAT EXCESS ALLOWANCE HAS BEEN GRANTED TO THE ASSESSEE. THEREF ORE, THE ASSESSING OFFICER HAS RIGHTLY REOPENED THE ASSESSMENT BY ISSU ING NOTICE U/S 148 ON THE BASIS OF THE INFORMATION RECEIVED. HENCE, THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. 3 ITA NO.251/COCH/2014 5. THE NEXT GROUND OF APPEAL IS WITH REGARD TO DISA LLOWANCE OF RS.18,970 BEING THE DIFFERENCE OF AMOUNT RECEIVED F ROM GEEP BATTERIES INDIA PVT LTD. SHRI TM SREEDHARAN, THE LD.SENIOR C OUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE ACCOUNTED TOTAL FREIGHT RECEIPT TO THE EXTENT OF RS. 1,40,197. AS PER THE AIR INFORMATION, THE ASSE SSING OFFICER CLAIMS THAT THE ASSESSEE HAS RECEIVED RS.1,59,167. THEREFORE, THE DIFFERENCE OF RS.18,970 WAS ADDED AS UNACCOUNTED RECEIPT. ACCORD ING TO THE LD.SENIOR COUNSEL THE ASSESSING OFFICER MADE ADDITION PURELY ON THE AIR INFORMATION WITHOUT ASCERTAINING THE ACTUAL RECEIPT OF MONEY BY THE ASSESSEE. ACCORDING TO THE LD.SENIOR COUNSEL, SOME OF THE CRE DITS SHOWN IN THE LEDGER ACCOUNT RELATE TO NEXT ACCOUNTING YEAR, THEREFORE, CREDITED BY THE ASSESSEE IN THE NEXT ACCOUNTING YEAR. ACCORDING TO THE LD.S ENIOR COUNSEL, THE ASSESSEE COULD NOT MAKE ONE TO ONE COMPARISON WITH BILL AMOUNT AND THE ACTUAL AMOUNT RECEIVED. ACCORDING TO THE LD.SENIOR COUNSEL, THE CREDITS IN FORM 26AS ARE NOT LEDGER ENTRIES. ACCORDING TO THE LD.SENIOR COUNSEL, THE VARIATION NOTICED BY THE ASSESSING OFFICER IS NEGLI GIBLE, THEREFORE, NO ADDITION IS CALLED FOR. 6. ON THE CONTRARY, SHRI M ANIL KUMAR, THE LD.DR SU BMITTED THAT EVEN THOUGH THE ASSESSEE CLAIMS THAT THE RECEIPT OF RS.1 8,970 RELATES TO NEXT ACCOUNTING YEAR, NO MATERIAL IS FILED BY THE ASSESS EE BEFORE THE LOWER AUTHORITY. EVEN BEFORE THIS TRIBUNAL, ACCORDING TO THE LD.DR, THE ASSESSEE 4 ITA NO.251/COCH/2014 COULD NOT FILE ANY DETAILS. THEREFORE, ACCORDING T O THE LD.DR, THE CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSES SING OFFICER MADE ADDITION OF RS.18,970 DUE TO THE DIFFERENCE IN FREI GHT CHARGES ACCOUNTED BY THE ASSESSEE AND SAID TO BE RECEIVED BY THE ASSESSE E ON THE BASIS OF THE AIR INFORMATION. THE ONLY CLAIM OF THE ASSESSEE BE FORE THIS TRIBUNAL IS THAT CERTAIN RECEIPTS PERTAINING TO EARLIER YEAR WA S NOT ACCOUNTED IN THE BOOKS OF ACCOUNT. THE FACT REMAINS IS THAT THE ASS ESSEE HAS RECEIVED RS.18,970 DURING THE YEAR UNDER CONSIDERATION. TO THIS EXTENT, THE AIR INFORMATION AVAILABLE BEFORE THE ASSESSING OFFICER CAN BE CONSIDERED. THE ASSESSEE COULD NOT EXPLAIN WHY THE AMOUNT RECEIVED DURING THE YEAR UNDER CONSIDERATION SHOULD BE TAKEN AS RECEIPT IN THE NEX T ACCOUNTING YEAR. IN THE ABSENCE OF ANY SUCH EXPLANATION, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY CONFIRMED THE A DDITION OF RS.18,970. THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE CIT(A). ACCORDINGLY, THE SAME IS CONFIRMED. 8. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADDI TION OF RS. 8,010. THIS ADDITION WAS MADE IN RESPECT OF DIFFERENCE OF THE AMOUNT RECEIVED AND THE AIR INFORMATION FROM ACME CHEMICALS PVT LTD . AS IN THE CASE OF 5 ITA NO.251/COCH/2014 GEEP BATTERIES INDIA PVT LTD, THE LD.SENIOR COUNSEL FOR THE ASSESSEE CLAIMS THAT CERTAIN RECEIPTS RELATING TO NEXT ACCOUNTING Y EAR WAS NOT ACCOUNTED IN THE LEDGER. THEREFORE, THE DIFFERENCE OCCURRED. A S ALREADY OBSERVED, WHEN AN AMOUNT IS RECEIVED DURING THE YEAR UNDER CO NSIDERATION AND IT IS NOT THE CLAIM OF THE ASSESSEE THAT IT WAS ADVANCE R ECEIVED FOR THE WORK TO BE CARRIED OUT IN THE NEXT ACCOUNTING YEAR, THIS TR IBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY CONF IRMED THE ADDITION. ACCORDINGLY, THE ORDER OF THE CIT(A) IS CONFIRMED. 9. THE NEXT GROUND OF APPEAL IN THE ASSESSEES APPE AL IS WITH REGARD TO DISALLOWANCE OF RS.60,74,224 TOWARDS LORRY HIRE CHA RGES. THE REVENUE ALSO RAISED THIS ISSUE IN THEIR APPEAL AGAINST DELE TION OF ADDITION OF RS. 28,89,12,411 BY THE CIT(A). 10. SHRI T.M. SREEDHARAN, THE LD.SENIOR COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER DISALLOWED RS. 61,32,54,820 U/S 4(A)(IA) OF THE ACT. HOWEVER, THE CIT(A) FOUND THA T THE ASSESSING OFFICER HIMSELF ACCEPTED IN THE REMAND REPORT THAT DISALLOW ANCE OF ONLY RS.30,71,97,689 IS SUSTAINABLE. AFTER CONSIDERING THE OBJECTION OF THE ASSESSEE AND THE FACT THAT THE ASSESSEE HAS FILED F ORM 15-J AND 15-I, THE CIT(A) FOUND THAT THERE CANNOT BE DISALLOWANCE U/S 40(A)(IA) IN RESPECT OF RS.28,89,12,411. ACCORDINGLY, THE CIT(A) RESTRICTE D THE DISALLOWANCE TO 6 ITA NO.251/COCH/2014 RS.60,74,224 ON THE BASIS OF THE JUDGMENT OF THE GU JARAT HIGH COURT IN CIT VS VALIBHAI KHANBHAI MANKAD 261 CTR (GUJ) 538. ACC ORDING TO THE LD.SENIOR COUNSEL, THE ASSESSEE HAS FILED FORM 15-I TO THE EXTENT OF RS.28,28,38,187. ACCORDING TO THE LD.SENIOR COUNSE L, THIS AMOUNTS TO ABOUT 2% OF THE TOTAL CLAIM OF THE ASSESSEE. THE L D.SENIOR COUNSEL SUBMITTED THAT THE ASSESSEE HAS ALMOST 300 BRANCHES ACROSS THE COUNTRY. THEREFORE, THE ASSESSEE COULD NOT GET FORM 15-I DUE TO LAPSE OF TIME. ACCORDING TO THE LD.SENIOR COUNSEL, MERELY BECAUSE THE ASSESSEE COULD NOT FILE 15-I IN RESPECT OF RS.60,74,224, THERE CANNOT BE ANY DISALLOWANCE. REFERRING TO THE DEPARTMENTAL APPEAL, THE LD.SENIOR COUNSEL SUBMITTED THAT THE DEPARTMENT FILED THE APPEAL IN RESPECT OF DISAL LOWANCE DELETED BY THE CIT(A) TO THE EXTENT OF RS.28,28,12,411. ACCORDING TO THE LD.SENIOR COUNSEL, THE ASSESSEE HAS FILED FORM 15J / 15I. TH EREFORE, THERE CANNOT BE ANY DISALLOWANCE U/S 40(A)(IA) IN VIEW OF THE JUDGM ENT OF THE DELHI HIGH COURT IN CIT VS RANJENDRA KUMAR 362 ITR 241 (DEL). 11. ON THE CONTRARY, SHRI M ANIL KUMAR, THE LD.DR S UBMITTED THAT ONLY TO THE EXTENT OF RS.30,71,97,689 THE ASSESSING OFFICER FOUND THAT THE CLAIM OF THE ASSESSEE IS SUSTAINABLE. HOWEVER, THE CIT(A) F OUND THAT THE ASSESSEE HAS PRODUCED FORM 15-I TO THE EXTENT OF RS.28,28,38 ,187. REFERRING TO THE COPY OF THE REMAND REPORT, THE LD.DR SUBMITTED THAT THOUGH THE ASSESSEE CLAIMS THAT FORM 15-I WAS PRODUCED, THE ASSESSEE CO ULD NOT PRODUCE FORM 7 ITA NO.251/COCH/2014 15-I TO THE EXTENT OF RS.60,74,224. ACCORDING TO T HE LD.DR, MERELY BECAUSE THE ASSESSEE HAS FILED FROM 15-J / 15-I, TH E LIABILITY TO DEDUCT TAX WOULD NOT BE ABSOLVED. THEREFORE, THE ASSESSING OF FICER HAS RIGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE TOTA L DISALLOWANCE WAS RS.61,32,54,820 OUT OF WHICH THE ASSESSING OFFICER HIMSELF ADMITTED THAT THE CLAIM OF THE ASSESSEE TO THE EXTENT OF RS.30,71 ,97,689. THE ONLY DISPUTE IS WITH REGARD TO RS.28,28,38,187. IT IS A N ADMITTED FACT THAT THE ASSESSEE HAS FILED FORM 15-I TO THE EXTENT OF RS. 2 7,67,63,963. SECTION 40(A)(IA) PROVIDES FOR DISALLOWANCE OF THE EXPENDIT URE WHICH IS OTHERWISE ALLOWABLE IN CASE TAX WHICH IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVIIB WAS DEDUCTED OR AFTER DEDUCTION IT WAS NOT PAID. T HEREFORE, IT IS FOR THE REVENUE TO SHOW THAT THE AMOUNT TO THE EXTENT OF RS .28,28,38,187 IS LIABLE FOR TAXATION AND HENCE THE ASSESSEE IS LIABLE TO DE DUCT TAX. WHEN THE ASSESSEE RECEIVED FROM 15-I / 15-J FROM THE RECIPIE NT SAYING THAT THEIR TAXABLE INCOME IS BELOW THE TAXABLE LIMIT, THEN THE LIABILITY TO DEDUCT TAX WOULD NOT ARISE. THEREFORE, TO THAT EXTENT THE ASS ESSEE IS JUSTIFIED IN NOT DEDUCTING TAX. IT IS FOR THE COMMISSIONER BEFORE W HOM FORM 15-I / 15J WAS FILED TO VERIFY THE SAME AND INFORM THE ASSESSEE TH AT THE CLAIM MADE IN FORM 15-I OR 15-J IS NOT CORRECT. SIMPLY RECEIVING THE FORM 15-I AND 15-J 8 ITA NO.251/COCH/2014 AND KEEPING THE SAME ON FILE WITHOUT ACTING UPON, T HE ASSESSING OFFICER CANNOT BLAME THE ASSESSEE FOR NON DEDUCTION OF TAX. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT TO THE E XTENT OF RS. 27,67,63,963 FOR WHICH THE ASSESSEE HAS FILED FORM 15-I, THERE C ANNOT BE ANY DISALLOWANCE U/S 40(A)(IA) OF THE ACT. 13. NOW WHAT REMAINS IS ONLY DISALLOWANCE OF RS.60, 74,224. ADMITTEDLY, THE ASSESSEE HAS NOT FILED FORM 15-I. THE LD.SENIO R COUNSEL NOW CLAIMS THAT THE ASSESSEE COULD NOT COLLECT FORM 15-I FOR L APSE OF TIME. IT IS NOT FOR THE ASSESSEE TO COLLECT FORM 15-I; IT IS FOR THE RE CIPIENT OF THE AMOUNT TO FURNISH FORM 15-I TO THE ASSESSEE IF THE AMOUNT REC EIVED IS NOT TAXABLE IN THEIR HANDS. THEREFORE, FORM 15-I HAS TO BE FURNIS HED BEFORE MAKING THE PAYMENT. THE ASSESSEE NOW CANNOT COLLECT FORM 15-I FROM THE RECIPIENTS OF THE AMOUNTS. THEREFORE, THE CLAIM OF THE ASSESS EE THAT DUE TO LAPSE OF TIME THEY COULD NOT COLLECT FORM 15-I IS NOT JUSTIF IED. UNLESS AND UNTIL IT IS SHOWN TO THE SATISFACTION OF THE ASSESSING OFFICER THAT THE AMOUNTS IN THE HANDS OF THE RECIPIENTS ARE NOT TAXABLE, THIS TRIBU NAL IS OF THE CONSIDERED OPINION THAT THE ASSESSEE IS LIABLE TO DEDUCT TAX. THEREFORE, FAILURE TO DEDUCT TAX WOULD ATTRACT DISALLOWANCE U/S 40(A)(IA) OF THE ACT. HENCE, THE CIT(A) HAS RIGHTLY RESTRICTED THE DISALLOWANCE TO T HE EXTENT OF RS.60,74,224. THIS TRIBUNAL DO NOT FIND ANY INFIRM ITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE SAME IS CONFIRME D. 9 ITA NO.251/COCH/2014 14. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE AND THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH OCTOBER, 2014. SD/- SD/- (CHANDRA POOJARI) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 30 TH OCTOBER, 2014 PK/- COPY TO: 1. M/S KERALA TRANSPORT CO, YMCA ROAD, KOZHIKODE 2. THE ACIT, CIR.1(1), KOZHIKKODE 3. THE COMMISSIONER OF INCOME-TAX, KOZHIKKODE 4. THE COMMISSIONER OF INCOME-TAX(A), KOZHIKKODE 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH