M/s Venus Dwellers Pvt. Ltd., Delhi V. ITO, New Delhi

ITA 2663/DEL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3738 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 11-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: SHYAM SUNDER S
• Keywords: Opportunity of being heard; TDS
• Section: 40(a)(ia); 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.2663/DEL/2016 ASSESSMENT YEAR : 2012-13 VENUS DWELLERS PVT. LTD., 43/1, RAJPUR ROAD, CIVIL LINES, DELHI. PAN: AACCV1374P VS. ITO, WARD-26(2), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJIV SAXENA & SHRI SHYAM SUNDER, ADVOCATES REVENUE BY : SHRI SURENDER PAL, SR. DR DATE OF HEARING : 13.02.2019 DATE OF PRONOUNCEMENT: 15.02.2019 ORDER PER R.K. PANDA, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 08 TH MARCH, 2016 OF THE CIT(A)-9, NEW DELHI, RELATING TO ASSESSMENT YEAR 2012-13. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: - 1. THE LD. CIT(A)-9 HAS ERRED IN CONFIRMING THE DISAL LOWANCE OF EXPENSES OF RS. 4,86,634/- U/S 40 (A) (IA) OF THE A CT, THEREFORE, THE SAME IS LIABLE TO BE DELETED BECAUSE OF THE FOLLOWINGS : (I) THE LD. CIT (A) HAS ERRED IN IGNORING THE SUBMISSI ON OF THE ASSESSEE THAT AMOUNT OF RS. 4,86,634/- INCLUDE THE SERVICE T AX WHICH IS NOT SUBJECTED TO PROVISION OF TDS, THEREFORE, THE DISAL LOWANCES MADE IN THIS REGARD LIABLE TO BE DELETED. ITA NO.2663/DEL/2016 2 (II) THE LD. CIT (A) HAS ERRED IN IGNORING THE SUBMISSI ON OF THE ASSESSEE THAT THE VARIOUS PAYMENTS WERE MADE ON ACCOUNT OF C OMMON AREA MAINTENANCE CHARGES, LEASE RENT, GROUND RENT ETC TO DIFFERENT PARTIES WERE BELOW THE THRESHOLD LIMIT PROVIDED IN SECTION I94C AND 194I., THEREFORE, THE CONFIRMATION OF DISALLOWANCES IS ILL EGAL. (III) THE LD. CIT (A) HAS IGNORED THE SECOND PROVISO OF SECTION 40(A) (IA) OF INCOME TAX ACT, 1961 AND NOT CONSIDER THE FACT THAT THE AMOUNT ON WHICH ASSESSEE HAS NOT DEDUCT THE TDS HAS ALREADY S HOWN BY THE RELEVANT PARTIES AS THEIR INCOME IN THEIR RETURNS. (IV) THE LD. CIT (A) HAS IGNORED THE FACT THAT PROVISIO NS OF SECTION 40(A) (IA) OF THE ACT ARE APPLICABLE ONLY IN RESPECT OF T HE AMOUNT PAYABLE AT THE END OF YEAR NOT ON AMOUNT PAID DURING THE YEAR AS OBSERVED BY THE VARIOUS TRIBUNALS AND HIGH COURTS. 2. THE APPELLANT CRAVES LEAVE FOR ADDITION, MODIFICAT ION, ALTERATION, AMENDMENT OF ANY OF THE GROUNDS OF APPEAL. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF ACQUISITION OF LAND FOR DEVELOPMENT AND CONSTRUCTION OF BUILDINGS, INTERIOR DECORATORS AND REAL ESTATE AGEN TS. IT FILED ITS RETURN OF INCOME ON 15 TH SEPTEMBER, 2012 DECLARING TOTAL LOSS OF RS.56,07,10 7/-. THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, OBSERVED THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.4,86,633/-.75 TOWARDS REPAIR AND MAINT ENANCE EXPENSES. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE, THE ASSE SSING OFFICER OBSERVED THAT THE ASSESSEE HAS NOT DEDUCTED TDS FROM THE PAYMENTS SO MADE. HE, THEREFORE, INVOKED THE PROVISIONS OF SECTION 40 (A)(IA) AND DISALLOWED AN AMOUNT OF RS.4,86,634/-. IN APPEAL, THE LD.CIT(A) UPHELD THE ACTION OF THE ASSE SSING OFFICER. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO.2663/DEL/2016 3 5. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, FI LED THE FOLLOWING CHART STATING THAT ALL THE RECIPIENTS ARE INCOME-TAX PAYEES AND H AD DECLARED THE INCOME IN THEIR RETURN OF INCOME AND, THEREFORE, IN VIEW OF THE SEC OND PROVISO TO SECTION 40(A)(IA) AND THE FIRST PROVISO TO SECTION 201(1) OF THE IT ACT, THE ASSESSEE CANNOT BE TREATED AS AN ASSESSEE IN DEFAULT AND NO ADDITION U/S 40(A)(IA) C AN BE MADE IF IT CANNOT BE SUBSTANTIATED THAT THE PAYEES HAVE DECLARED SUCH IN COME IN THEIR RETURN OF INCOME:- BEFORE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH- F, NEW DELHI IN THE MATTERS OF: M/S. VENUS DWELLERS PVT. LTD. ITANO. 2663/D/2016 (ASSESSEE) ASSESSMENT YEAR: 2012-13 SUMMARY CHART SR. NO. NAME OF THE COMPANY TO WHOM PAYMENT MADE PAN NO. NATURE OF PAYMENT AMOUNT RELEVANT PAGES 1 COLLIERS INTERNATIONAL SERVICES PVT. LTD. PROPERTY ADDRESS: SHOP NO.19C, PLOT NO. 07, TDI ENTRE, DISTT CENTRE, SARITA VIHAR AADCC6435H ONE TIME LEASE, COMMON AREA MAINTENANCE CHARGES 1,37,820/ - 1 - 10 2 STAR FACILITIES MANAGEMENT LTD. PROPERTY ADDRESS: AG 67, GREATER NOIDA ANSAL PLAZA AALCS2854C ONE TIME LEASE, COMMON AREA MAINTENANCE 76,423/ - 13 - 23 3 DLF UTILITIES LTD. PROPERTY ADDRESS: DTC 302, 10 TH FLOOR, GATEWAY TOWER, DLF CYBER CITY GURGAON AAACN3199A ONE TIME LEASE, COMMON AREA MAINTENANCE (2,76,269) 269882 24 - 36 TOTAL PAYMENT SOUGHT ( 4,90,512 ) TOTAL PAYMENT MADE 4,86,634/ - 6. HE ACCORDINGLY SUBMITTED THAT HE HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE THAT THE PAYEES HAVE DECLARED SUCH INCOME IN THEIR RETURN OF INCOME. ITA NO.2663/DEL/2016 4 7. THE LD. DR, ON THE OTHER HAND, WHILE RELYING ON THE ORDER OF THE CIT(A) FAIRLY SUBMITTED THAT HE HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION. 8. AFTER HEARING BOTH THE SIDES, WE FIND THE ASSESSING OFFICER MADE ADDITION OF RS.4,86,634/- BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) ON THE GROUND THAT THE ASSESSEE HAS NOT DEDUCTED TAX FROM PAYMENT TO THE T HREE PARTIES TO WHOM PAYMENTS HAVE BEEN MADE TOWARDS REPAIR AND MAINTENANCE AND F OR WHICH PROVISION OF SECTION 194C ARE ATTRACTED. WE FIND THE LD. CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASS ESSEE THAT SINCE THE PAYEES OFFERED TO TAX SUCH INCOME IN THEIR RETURN OF INCOME, THEREFOR E, IN VIEW OF THE SECOND PROVISO TO SECTION 40(A)(IA) AND FIRST PROVISO TO SECTION 201( 1) OF THE IT ACT, THE ASSESSEE CANNOT BE TREATED AS AN ASSESSEE IN DEFAULT AND, THEREFORE , NO ADDITION IS CALLED FOR IF THE PAYEES HAVE DECLARED SUCH INCOME IN THEIR RETURN OF INCOME . WE, THEREFORE, DEEM IT APPROPRIATE TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE WITH EVIDENCE TO THE SATISFACTION OF THE ASSESSING OFFICER THAT PAYEES HAVE OFFERED SUCH INCOME TO TAX IN THEIR RESPECTIVE RETURN OF INCOME AND IF THE ASSESSEE SO SUBSTANTIAT ES, IN VIEW OF THE SECOND PROVISO TO SECTION 40(A)(IA) AND FIRST PROVISO TO SECTION 201( 1) OF THE IT ACT, DELETE THE DISALLOWANCE SO MADE. NEEDLESS TO SAY, THE ASSESSI NG OFFICER SHALL GIVE DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND DECI DE THE ISSUE AS PER FACT AND LAW. WE ITA NO.2663/DEL/2016 5 HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSE SSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 5.02.2019. SD/- SD/- (SUCHITRA KAMBLE) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMFBER DATED: 15 TH FEBRUARY, 2019 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI