Rentokil India Private Ltd, Chennai V. DCIT, Corporate Circle 5(1), Chennai

ITA 270/CHNY/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4214 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 22-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reopening of assessment

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI , . , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.270/CHNY/2018 / ASSESSMENT YEAR : 2011-12 M/S.RENTOKIL INDIA PRIVATE LIMITED , 105,4 TH FLOOR, SREELA TERRACE,IST MAIN ROAD, GANDHI NAGAR,ADYAR, CHENNAI 600 020. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE -5(1), CHENNAI-34. [PAN AADCR 7629 E] ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : MR.SP.CHIDAMBARAM, ADVOCATE $% ! ' # /RESPONDENT BY : MR.CLEMENT RAMESH KUMAR, ADDITIONAL CIT D.R. & ' ' () / DATE OF HEARING : 04 - 1 0 - 201 8 * ' () / DATE OF PRONOUNCEMENT : 08 - 1 0 - 201 8 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-3,CHENNAI IN ITA NO.214/16-17/A-3 DATED 27.10.2017 FOR THE ASSE SSMENT YEAR 2011- 12. ITA NO.270/CHNY/2018 :- 2 -: 2. MR.SP.CHIDAMBARAM REPRESENTED ON BEHALF OF THE ASSESSEE AND MR.CLEMENT RAMESH KUMAR REPRESENTED ON BEHALF THE OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LD.AR THAT THE ASSESSEE IS A COMPANY, WHICH IS DOING THE BUSINESS OF PROVIDING P EST CONTROL SERVICES TO VARIOUS RETAIL AND INDUSTRIAL CUSTOMERS . IT WAS A SUBMISSION THAT ASSESSEE HAD PAID MANAGEMENT FEES AMOUNTING TO ` 1,20,28,952/- TO ITS ASSOCIATE ENTERPRISES (A.E). IT WAS A SUBMIS SION THAT ASSESSEE HAD DEDUCTED THE TDS IN RESPECT OF THE SAID PAYMENT IN DECEMBER,2010, WHICH WAS LIABLE TO BE REMITTED ON O R BEFORE 30 TH APRIL,2011 IN RESPECT OF ASSESSMENT YEAR 2011-12 AS PER PROVISIONS OF THE SECTION 40(A)(I) OF THE ACT. IT WAS A FURTHER S UBMISSION THAT HOWEVER, THE ASSESSEE HAD PAID THE TDS TO THE ACCOU NT OF THE GOVERNMENT ONLY ON 24.09.2011, WHICH WAS BEFORE THE DUE DATE OF FILING OF THE RETURN. IT WAS A SUBMISSION THAT THE RETURN HAS BEEN FILED ON 28.11.2014. IT WAS A SUBMISSION THAT THE ASSESSE E HAVING PAID THE TDS BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME U/S.139(1) OF THE ACT, THE ASSESSEE MAY BE GRANTED BENEFIT OF THE DEDUCTION OF THE EXPENSES AS CLAIMED BY THE ASSESSEE. IN THE ALTERNA TIVE, IT WAS A PRAYER THAT A SUITABLE DIRECTION MAY BE ISSUED TO T HE LD. ITA NO.270/CHNY/2018 :- 3 -: ASSESSING OFFICER TO PROVIDE SUCH ALLOWANCES DURING THE YEAR IN WHICH THE TAXES ARE PAID. 4. IN REPLY, LD.D.R SUBMITTED THAT THE TDS HAVING NOT BEEN PAID WITHIN THE DUE DATE AS PROVIDED UNDER THE ACT BEING 30.04.2011 FOR ASSESSMENT YEAR 2011-12, THE DEDUCTION IN RESPECT O F MANAGEMENT FEES CANNOT BE GRANTED TO THE ASSESSEE. LD.D.R VEHE MENTLY SUPPORTED THE ORDERS OF LD. ASSESSING OFFICER AND THE LD.CIT( A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE PROVISIONS OF THE SECTION 40(A)(I) OF THE ACT AND T HE PROVISO THERETO, SHOWS THAT IF THE AMOUNT HAS BEEN PAID BY THE ASSES SEE AFTER DEDUCTION OF TDS TO THE ACCOUNT OF THE GOVERNMENT B EFORE THE DUE DATE OF FILING OF THE RETURN, THEN THE AMOUNT COULD BE PERMITTED AS AN EXPENDITURE IN THE PREVIOUS YEAR IN WHICH THE AMOUN T HAS BEEN PAID TO THE ACCOUNT OF CENTRAL GOVERNMENT. THIS VIEW OF OURS, FIND SUPPORT FROM THE DECISION OF THE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. CALCUTTA EXPORT COMPANY REPORTED IN 404 ITR 654 (SC) WHEREIN HELD THAT DEDUCTION OF THE AMOUNT IS PERMIS SIBLE IN THE PREVIOUS YEAR IN WHICH THE AMOUNT OF TAX HAS BEEN D EDUCTED AND PAID TO THE ACCOUNT OF THE CENTRAL GOVERNMENT. IN T HE CIRCUMSTANCES, RESPECTFULLY FOLLOWING THE PRINCIPLE S LAID DOWN BY THE SUPREME COURT OF INDIA IN THE CASE OF CIT VS.CA LCUTTA EXPORT COMPANY REFERRED TO SUPRA, THE LD. ASSESSING OFFICE R IS DIRECTED TO ITA NO.270/CHNY/2018 :- 4 -: ALLOW THE ASSESSEE THE BENEFIT OF THE EXPENDITURE O F MANAGEMENT FEES OF ` 1,20,28,952/- IN THE PREVIOUS YEAR IN WHICH TAX DED UCTED IN RESPECT OF THE SAME HAS BEEN PAID THE ACCOUNT OF TH E CENTRAL GOVERNMENT. 5.1 WE ARE NOT ADJUDICATING THE GROUNDS IN RESPECT OF REOPENING OF ASSESSMENT, AS ON MERITS THE ASSESSEE HAS GOT TH E NECESSARY RELIEF. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED ON 08 TH OCTOBER, 2018, AT CHENNAI. SD/ - SD/ - ( . ) (A.MOHAN ALANKAMONY) ! ' / ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) # ' / JUDICIAL MEMBER - ' / CHENNAI . / DATED: 08 TH OCTOBER , 2018. K S SUNDARAM / ' $(01 2 1( / COPY TO: 1 . ! / APPELLANT 4. & 3( / CIT 2. $% ! / RESPONDENT 5. 145 $(6 / DR 3. & 3( () / CIT(A) 6. 57 8' / GF