ACIT, Circle-16(2), Hyd, Hyderabad V. Mahavir Auto Diagnostic (P) Ltd., Hyd, Hyderabad

ITA 281/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6092 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 01-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 10-03-2016
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: CH G MURALIKRISHNA MURTHY
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 281/HYD/2016 ASSESSMENT YEAR: 2009-10 ASST. COMMISSIONER OF INCOME TAX, CIRCLE-16(2), HYDERABAD VS M/S. MAHAVIR AUTO DIAGNOSTICS (P) LTD., HYDERABAD [PAN: AABCM3690C] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI K.J. RAO, DR FOR ASSESSEE : SHRI CH.G. MURALI KRISHNA MURTHY, AR DATE OF HEARING : 09-03-2017 DATE OF PRONOUNCEMENT : 15-03-2017 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS REVENUES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4 , HYDERABAD DATED 04-12-2015. THE ISSUE IN THIS APPEAL IS WITH REFERE NCE TO DELETION OF AN AMOUNT OF RS. 3,41,70,974/- ADDED BY THE ASSESS ING OFFICER (AO) AS SUPPRESSION OF INCOME ON THE BASIS OF THE 26 AS REPORT, WHEREAS CIT(A) AFTER REMANDING THE MATTER TO THE AO A ND EXAMINING THE TRANSACTIONS, DELETED THE SAME. I.T.A. NO. 281/HYD/2016 M/S. MAHAVIR AUTO DIAGNOSTICS (P) LTD., :- 2 - : 2. BRIEFLY STATED, AO WHILE COMPLETING THE ASSESSMENT HA S NOTED THAT 26AS HAS REPORTED CERTAIN INCOMES ON WHICH TDS WAS MADE TO AN EXTENT OF RS. 3,48,62,172/-. AFTER GIVING AN OPP ORTUNITY TO ASSESSEE, AO MADE AN ADDITION OF RS. 3,41,70,974/- AS UNDISCLOSED INCOME. BEFORE THE LD.CIT(A), ASSESSEE SUBMITTED THAT ASSESSEE-COMPANY HAD SHOWN ALL THE RECEIPTS FROM DIFF ERENT INSTITUTIONS UNDER THE HEAD SALES LABOUR, SINCE IT IS ENGAGED IN THE ACTIVITY OF PROVIDING SERVICE FACILITY TO THE CUSTO MERS. THEREAFTER, ASSESSEE HAS FURNISHED THAT THE GROSS RE CEIPTS UNDER THE HEAD SALES LABOUR WERE TO THE TUNE OF RS. 5,02,07 ,443/- WHICH HAS BEEN SHOWN IN THE FINANCIAL STATEMENTS UNDER THE MAIN INDIRECT INCOME WITH SUB HEAD SALES LABOUR AP. T HEREAFTER, ASSESSEE RECONCILED THE AMOUNT TAKEN BY THE AO WHICH W ERE EXTRACTED BY THE LD.CIT(A) IN PARA 3.2 OF THE ORDER. LD.CIT(A) REMANDED THE MATTER TO THE AO TO VERIFY THE 26AS STATEMEN T AS WELL AS ASSESSEES ACCOUNTING PROCEDURES. AO HOWEVER , WAS OF THE VIEW THAT THE AMOUNTS ACCOUNTED FOR WERE ENTIRELY DIFFE RENT, BASED ON HIS PERCEPTION OF CORRECT ACCOUNTING PROCEDURES. THE REMAND REPORT WAS EXTRACTED IN PARA 4.1 OF THE LD.CIT(A) ORDER . AFTER DULY CONSIDERING ASSESSEES OBJECTIONS AND THE REMAND REPO RT OF THE AO, LD.CIT(A) GAVE FACTUAL FINDINGS WHILE DELETING THE AMO UNTS AS UNDER: 5. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R MADE BY THE ASSESSING OFFICER, GROUNDS OF APPEAL, STATEMENT OF FACTS, SUBMISSIONS MADE BY THE APPELLANT AND ALSO THE REMAND REPORT SU BMITTED BY THE AO. DURING THIS YEAR, THE AO MADE THE ADDITION OF RS.3, 41,70,974/- AS UNDISCLOSED INCOME AS PER 26AS, AS TOTAL AMOUNT REC EIVED FROM DIFFERENT INSTITUTIONS UNDER HEADS THAT IS CONTRACTS, PROFESS IONAL SERVICES OTHER INTEREST AND COMMISSION. ON VERIFICATION OF THE PRO FIT AND LOSS ACCOUNT AS ON FOR THE YEAR ENDING 31/03/2009, THE TOTAL INDIRE CT INCOME CREDITED BY THE APPELLANT WAS OF RS.5,41,02,279/ AND THE NET PR OFIT DISCLOSED WAS OF RS.2,85,23,423/-. THE INDIRECT INCOME BREAK UP AS P ER SCHEDULE 11 I.T.A. NO. 281/HYD/2016 M/S. MAHAVIR AUTO DIAGNOSTICS (P) LTD., :- 3 - : INCLUDES SALES LABOUR OF ANDHRA PRADESH OF RS.5,02, 07,443/ - AND SALES LABOUR OF BHUBANESWAR OF RS.20,55,953/-. THIS SALES LABOUR OF RS.5,02,07,443/ - INCLUDES SALES LABOUR VIZAG OF RS .34,13,418/- THE TDS U/S. 194C WAS DEDUCTED ON RS.3,27,19,337/- OF RS.7, 41,594/-. ON PROFESSIONAL SERVICES, TDS U/S. 194J DEDUCTED WAS O F RS.39,259/- ON RS.3,18,703/-. THE TDS OF RS.75,269/- U/S. 194A ON RS.3,32,158/- WAS DEDUCTED. U/S. 194H AN AMOUNT OF RS.1,77,472/- ON R S.14,91,975/-. THEREFORE, THE TOTAL TDS WAS OF RS. 3,48,62,173/- W HICH WAS TALLIED AS PER 26AS ADOPTED BY THE AO IN HIS ASSESSMENT ORDER AS DISCUSSED ABOVE. THEREFORE, RS. 5,02,07,443/- AS POINTED OUT BY THE AO AS INDIRECT INCOME UNDER THE HEAD SALES LABOUR WAS ALREADY FIGURED IN RS. 5,41,02,279/- WHICH WAS DISCLOSED BY THE APPELLANT AS OTHER INCOM E UNDER SCHEDULE 11 OF THE PROFIT AND LOSS ACCOUNT. THEREFORE, AS OBSE RVED BY THE AO, THERE IS NO ESCAPEMENT OF INCOME OF RS. 3,41,70,974/-. THERE FORE, THE ADDITION MADE BY THE AO IS DELETED. 3. LD.DR RELIED ON THE REMAND REPORT OF THE AO TO SUBM IT THAT THE AMOUNTS ARE DIFFERENT. LD. COUNSEL HOWEVER, SUBM ITTED THAT SIMILAR ISSUE AROSE IN AY. 2008-09 ALSO AND THE ITAT HAS CONSIDERED THE SAME AND HELD THAT INDIRECT INCOMES WERE INCLUDED IN MAJOR HEAD SALES LABOUR AND CIT(A) HAS COMPLET ED ITEM-WISE RECONCILIATION OF TDS WITH 26AS STATEMENT. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE PAPER BOOK PLACED ON RECORD. AS SEEN FROM THE DOCUM ENTS AND THE ORDER OF CIT(A), LD.CIT(A) NOT ONLY REMANDED THE MATTE R TO AO FOR FACTUAL EXAMINATION, BUT ALSO VERIFIED AND RECONCILE D THE TDS AMOUNTS AS STATED IN PARA 5 OF THE ORDER. SURPRISINGL Y, THE AO IN HIS SCRUTINY REPORT ON CIT(A)S ORDER SENT ON 02-02-2 016 TO THE CIT HAS STATED THAT THE FACTUAL FINDING GIVEN BY THE CIT(A) I S NOT CONTRARY TO THE MATERIAL ON RECORD. VIDE SECOND PAGE OF THE REPORT IN COLUMN-3B, SUB-ITEM-V FOR THE QUESTION WHETHER ANY FACTUAL FINDING GIVEN BY CIT(A) IS CONTRARY TO THE MATERIAL ON RECORD? IF YES, SPECIFY IN DETAIL INDICATING SPECIFIC PARA OF THE O RDER UNDER SCRUTINY AND MATERIAL ON RECORD CONTRADICTING SUCH A FINDING , AO ANSWERED I.T.A. NO. 281/HYD/2016 M/S. MAHAVIR AUTO DIAGNOSTICS (P) LTD., :- 4 - : NO. SINCE THIS ISSUE IS ONE OF THE FACTUAL FINDINGS AND SI NCE AO ALSO ACCEPTED THAT THE ORDER OF THE CIT(A) IS FACTUALLY CORRECT TO THE MATERIAL ON RECORD, WE DO NOT SEE ANY REASON TO INTE RFERE WITH SUCH ORDER. AS POINTED OUT BY THE LD. COUNSEL, THE CO-ORDIN ATE BENCH IN ITA NO. 268/HYD/2016 DT. 28-09-2016 IN ASSESSEES OWN CASE FOR AY 2008-09ON SIMILAR ISSUE HAS DECIDED THE MATTER IN FAVOUR OF ASSESSEE AND AGAINST THE REVENUE AS UNDER: 8. CONSIDERED THE SUBMISSIONS OF BOTH THE COUNSELS AND PERUSED THE MATERIAL FACTS ON RECORD. THE ASSESSEE IS RUNN ING A DEALERSHIP OF CARS AND HAS RECEIVED INDIRECT INCOMES LIKE CAR SERVICES , INSURANCE COMMISSION ETC. THE INDIRECT INCOME INCLUDES CAR SERVICE, WHI CH INVOLVES REPLACEMENT OF SPARE PARTS AND LABOUR SERVICES. THE LABOUR SER VICES WILL COME UNDER TDS PROVISIONS. AGAIN IT MAY BE FOR THE COMPANY OR INDIVIDUAL CUSTOMERS. ONLY THE COMPANY CUSTOMERS WILL COME UNDER TDS PROV ISIONS. THESE INDIRECT INCOMES WERE INCLUDED IN THE MAJOR HEAD S ALES LABOUR. IN OUR VIEW, THE CIT(A) HAS ALREADY COMPLETED THE ITEM-WIS E RECONCILIATION OF TDS WITH 26AS STATEMENT. HENCE, NEED NO FURTHER INVEST IGATION. ACCORDINGLY, APPEAL OF THE REVENUE IS DISMISSED. 5. IN VIEW OF THE ABOVE, WE DO NOT SEE ANY REASON TO DIFFER FROM THE FACTUAL FINDINGS GIVEN BY THE CIT(A). AS THERE IS N O MERIT IN REVENUES GROUNDS, THE SAME ARE DISMISSED. 6. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH MARCH, 2017 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 15 TH MARCH, 2017 TNMM I.T.A. NO. 281/HYD/2016 M/S. MAHAVIR AUTO DIAGNOSTICS (P) LTD., :- 5 - : COPY TO : 1. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-16 (2), HYDERABAD. 2. M/S. MAHAVIR AUTO DIAGNOSTICS (P) LTD., 6-3-1099 /1/B, RAJ BHAVAN ROAD, HYDERABAD. 3. CIT (APPEALS)-4, HYDERABAD. 4. PR.CIT-4, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.