DCIT, CHENNAI V. Shri V.Mahalingam, CHENNAI

ITA 253/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5268 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 15-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI A BENCH, CHENNAI. BEFORE SHRI.U.B.S. BEDI J.M. & SHRI. N.S. SAINI A.M. I.T.A. NO. 253/MDS/2011 ASSESSMENT YEARS: 2007-08 THE DEPUTY COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE I, CHENNAI 600 034. VS. SHRI V. MAHALINGAM, G-3, M.H.V. PINNACLE NO. 27, GOVINDU STREET, OFF G.N. CHETTY ROAD, T. NAGAR, CHENNAI 17.. [PAN:AACPM7819F] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SHAJI P. JACOB ASSESSEE BY : NONE ORDER PER U.B.S. BEDI, J.M . THIS APPEAL OF THE DEPARTMENT IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) VI, CHENNAI DATED 01.11. 2010 RELEVANT TO THE ASSESSMENT YEAR 2007-08, WHEREBY THE D EPARTMENT HAS CHALLENGED THE ACTI ON OF THE LD. CIT(A) IN HOLDING THAT CREDIT FOR TDS COULD BE GIVE N EVEN IF THE CORRESPONDING INCOME WAS NOT ADMITTED BY THE ASSESSEE BY RE LYING UPON THE DECISION IN THE CASE OF M/S. SHRIRAM EQUIPMENT LEASING, ETC. IN ITA NOS.1848/MDS/2009, 1927/MDS/2009 AND 1852/MDS/2009 DATED 18.02. 2010 OF C SMC BENCH OF THE TRIBUNAL. 2. AT THE VERY OUTSET, THE LD. DR SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE C SMC BENCH OF THE TRIBUNAL IN THE CASE OF M/S. SHRIRAM EQUIPMENT LEASING, ETC. IN ITA NOS.1848/MDS/2009, 1927/MDS/2009 AND 1852/MDS/2009 DATED 18.02. 2010 IN WHICH THIRD MEMBER I.T.A. NO.253/MDS/11 2 DECISION IN THE CASE OF PRADEEP KUMAR DHIR V. A SSISTANT COMMISSIONER OF INCOME TAX [2006] 303 ITR (A T) 45 (CHANDIGARH) AND OTHER DECIS IONS INCLUDING THAT OF MADRAS HIGH COURT HAVE ALSO BEEN FOLLOWED. THEREFORE, BY FILING A COPY OF THE DECISION DATED 18.02.2010 , THE LD. DR PLEADED FOR REVERSAL OF THE ORDER AS PASSED BY THE LD. CIT(A) AND RESTORING THAT OF THE ASSESSING OFFICER BECAUSE THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE DEPARTMENT AS NO CREDIT OF TDS COULD BE GIVEN IF INCOME IS NOT ASSESSABLE IN RELEVANT ASSESSMENT YEAR. 3. DESPITE SERVICE OF NOTICE [AD ON RE CORD], THE ASSESSEE DID NOT CHOOSE TO BE PRESENT AT THE TIME OF HEARING OF THE CASE, SO WE PROCEED TO DECIDE THE APPEAL EX-PARTE QUA THE ASSESSEE AFTER C ONSIDERING THE ARGUMENTS OF THE LD. DR AND MATERIAL AVAILABLE ON RECORD. 4. AFTER HAVING HEARD THE LD. DR AND CONSIDERING THE MATERIAL ON RECORD AS WELL AS PRECEDENTS RELIED UPON, WE FIND TH AT SIMILAR ISSUE CAME FOR CONSIDERATION BEFORE C SMC BENCH OF THE TRIBUNAL IN THE CASE OF M/S. SHRIRAM EQUIPMENT LEASING, ETC. (SUPRA) IN WHICH FOLLOWING C ONCLUSION AS PER PARA 7 TO 8 HAS BEEN DRAWN : 7. AFTER HEARING BOTH THE SIDES, CONSIDERING THE MA TERIAL ON RECORD AS WELL AS PRECEDENTS RELIED UPON BY THE RIVAL SIDES, IT IS FOUND THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE VIDE DECISION OF CHANDIGARH BENCH, ON D IFFERENCE OF OPINION BETWEEN MEMBERS. THIRD MEMBER HAVING AGREED WITH THE VIEW OF THE VICE PRESIDENT, IT HAS BEEN HELD BY MAJORITY VIEW VIDE ORDER DATED APRIL 27, 2007 AS REPORTED IN THE CASE OF PARDEEP KUMAR DHIR V. ACIT SUPRA. ON HAVING CONSIDERED AND RELIED UPON HON BLE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF CIT V. TA NJORE PERMANENT BANK LTD. 149 ITR 788, CBDT CIRCULAR NO. 5 OF 2001 , CHANDIGARH BENCH DECISION IN THE CASE OF TEJ RAM V. ITO 93 ITD 1 (CHD.), HONBLE MADRAS HIGH COURT DECISION IN THE CASE OF MADURA COAT S LTD. V. CIT 158 ITR 697 (MAD), I.T.A. NO.253/MDS/11 3 MUMBAI BENCH DECISION IN THE CASE OF SMT. VARSHA G. SALUNKE V. DEPUTY CIT 281 ITR (AT) 55, HAS HELD, THAT THERE IS A SPECIFIC SECTION, I.E. SECTION 199 OF THE INCOME TAX ACT UNDER WHICH CREDIT HAS TO BE ALLOWED TO THE ASSESSEE OF TAX DEDUCTED AT SOURCE. THE CONDITIONS FOR GETTING BENEFIT UNDER SECTION 199 ARE: (A) THE ASSESS EE SHOULD PRODUCE THE CERTIFICATE FOR THE AMOUNT OF TAX DEDUCTED AT SOURCE; (B) IT SHOULD SHOW THAT INCOME SUBJECTED TO TAX DEDU CTED AT SOURCE IS DISCLOSED IN THE RETURN OF THE A SSESSMENT YEAR AS ASSE SSABLE. BOTH THE CONDITIONS ARE TO BE SATISFIED. IT IS, THEREFORE, CLEAR THAT THE ASSESSEE WILL NOT BE ENTITLED TO HAVE BENEFIT OR CREDIT FOR THE AMOUNT THOUGH MENTIONED IN TH E CERTIFICATE FOR THE ASSESSMENT YEAR IF THE INCOME RELATABLE TO THE AMOUNT IS NOT SHOWN AND IS NOT ASSESSABLE IN THAT ASSESSMENT YEAR. IF INSTEAD OF THE ENTIRE INCOME REFERABLE TO THE AMOUNT OF TAX DEDUCTED, ONLY A PORTION OF INCOME IS FOUND ASSESSABLE TH E BENEFIT HAS TO BE ALLOWED ONLY ON THE PORTION SHOWN. IF THE BAL ANCE INCOME, ON ACCOUNT OF THE SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE OR FOR SOME OTHER REASON IS FOUND TO BE ASSESSABL E IN FUTURE, THEN THE CREDIT FOR THE BALANCE TAX DEDUCTED AT SO URCE CAN BE ALLOWED ONLY IN FUTURE WHEN THE INCOME IS ASSESSABLE. THE CENTRAL BOARD OF DIRECT TAXES CIRCULAR NO. 5 OF 2001, DATED MARCH, 2001, ALSO SUPPORTS THE VIEW THAT WHERE TAX IS DEDUCTED FROM THE AMOUNT WHICH IS LIABLE TO BE ASSESSED AN D SPREAD OVER MORE THAN ONE FINANCIAL YEAR, CREDIT SHALL BE A LLOWED ON PRO RATA BASIS AND IN THE SAME PROPORTION IN WHICH SUCH INCOME IS OFFERED FOR TAXATION IN DIFFERENT ASSESSMENT YE ARS. IN THE PR ESENT CASE THE ASSESSEE HAD FOLLOWED THE CASH SYSTEM OF ACCOUNTING AND HIS INCOME HAD BEEN COMPUTED AS PER THE ABOVE SYSTEM. NO ADDITION HAD BEEN MADE FOR IN COME WHICH THE ASSESSEE WAS ENTITLED TO RECEIVE BU T DID NOT ACTUALLY RECEIVE. NO CREDIT FOR TAX DEDUCTED AT SOURCE ON SUCH NON ASSESSABLE INCOME COULD BE CLAIMED. 8. KEEPING IN VIEW THE ENTIRETY OF FACTS AND CIRCUMSTANCES AND MATERIAL ON RECORD AND FOLLOWING THE ABOVE NOTED DECISION, IT IS HELD THAT THE ASSESSING OFFICER HAS TAKEN A CORRECT VIEW AND THE LD. CIT(A) WAS NOT JUSTIFIED IN UPSETTING SUCH VI EW. AS SUCH, WH ILE ACCEPTING THE APPEALS OF THE REVENUE, THE ORDER OF THE LD. CIT(A) IS REVERSED AND THAT OF THE ASSESSING OFFICER IS RESTORED. I.T.A. NO.253/MDS/11 4 5. SINCE THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE DEPARTMENT AND THERE IS NO CONTRARY MATERIAL ON RECORD , THEREFORE FOLLOWING T HE SAID DECISION, THE ORDER OF THE LD. CIT(A) IS REVERSED AND T HAT OF THE ASSESSING OFFICER IS RESTORED WHILE ACCEPTING THE APPEAL OF THE DEPARTMENT. 6. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS ALLOWED. ORDER PRONOUNCED SOON AFTER THE C ONCLUSION OF HEARING ON 26.04.2011. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER CHENNAI, DATED, THE. 26.04.2011 VM/- TO:THE ASSESSEE//A.O./CIT(A)/CIT/D.R.