Rane (Madras) Limited, CHENNAI V. DCIT LTU-2, CHENNAI

ITA 2850/CHNY/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5252 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 24-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAILENDRA MAMIDI
• Assessee Lawyers: SANDIYA S
• Keywords: Revised return
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , ! ' . #$ , % & BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO.2850/CHNY/2017 ( / ASSESSMENT YEAR: 2009-10) M/S. RANE (MADRAS) LIMITED, MAITHRI, 132 CATHEDRAL ROAD, CHENNAI 600086. VS THE DEPUTY COMMISSIONER OF INCOME TAX, LARGE TAXPAYER UNIT-2, CHENNAI. PAN: AACCR9772M ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI SAROJ KUMAR PARIDA & MS. SANDIYA, ADVOCATES / RESPONDENT BY : SHRI SAILENDRA MAMIDI, CIT /DATE OF HEARING : 23.04.2018 /DATE OF PRONOUNCEMENT : 02.05.2018 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)- 17, CHENNAI DATED 31.08.2017 IN ITA NO.101/11-12 & 8/14 -15/LTU(A) /(A)-17 FOR THE ASSESSMENT YEAR 2009-10 PASSED U/S .250(6) R.W.S. 143(3) OF THE ACT. 2 ITA NO.2850/CHNY /2017 2. THE ASSESSEE HAS RAISED THREE GROUNDS IN ITS APP EAL HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE LD.AO AMOUNTING TO RS.84,19,196/- BY INVOKING THE PROVISIONS OF SECTIO N 40(A)(IA) OF THE ACT, BEING DISALLOWANCE OF EXPENDITURE INCURRED TOWARDS EXPORT COMMISSION PAID TO NON-RESIDENTS DUE TO NON- DEDUCTION OF TAX AT SOURCE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACT URE OF AUTOMOBILE ANCILLARIES, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 29.09.2009 AND SUBSEQUEN TLY FILED REVISED RETURN ON 31.03.2011 ADMITTING TOTAL INCOME OF RS.2,29,14,587/-. INITIALLY THE RETURN WAS PROCESS ED U/S.143(1) OF THE ACT AND SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S.143(2) OF THE ACT WAS ISSUED ON 26.08.2010. FINALLY THE ASSESSMENT ORDER WAS PASSED U/S.143(3) OF THE ACT ON 23.12.2011 WHEREIN THE LD.AO MADE SEVERAL ADDITIONS AMONGST WHICH ONE OF THE ADDITION WAS WITH RESPECT TO DISAL LOWANCE OF EXPORT COMMISSION PAID TO NON-RESIDENT MR. JAMES DR UTCHAS, USA AMOUNTING TO RS.84,19,196/- INVOKING THE PROVISIONS OF SECTION 3 ITA NO.2850/CHNY /2017 40(A)(IA) OF THE ACT SINCE TAX WAS NOT DEDUCTED AT SOURCE U/S.195 OF THE ACT. 4. AT THE OUTSET THE LD.AR SUBMITTED BEFORE US THAT ON THE IDENTICAL FACTS FOR THE ASSESSMENT YEAR 2007-08 THE CHENNAI BENCH OF THE TRIBUNAL IN ITA NO.852/MDS/2013 VIDE O RDER DATED 13.06.2014 HAD REMITTED THE MATTER BACK TO THE FILE OF LD.AO WITH DIRECTIONS TO EXAMINE THE ISSUE AFRESH WITH REFEREN CE TO THE AGREEMENTS AND THE CASE LAWS RELIED BY THE ASSESSEE . THE LD.AR FURTHER SUBMITTED THAT THOUGH THE DECISION OF THE T RIBUNAL WAS CITED BEFORE THE LD.CIT(A), THE LD.CIT(A) OVERLOOKI NG THE SAME HELD THAT IN THE ABSENCE OF EVIDENCE TO THE CONTRA RY, THE DISALLOWANCE U/S.40(A)(IA) OF THE ACT FOR RS.84,19, 196/- MADE BY THE AO IS CONFIRMED. IT WAS THEREFORE PLEADED THAT THE ORDER OF THE LD.CIT(A) MAY BE SET ASIDE AND THE MATTER MAY B E REMITTED BACK TO THE FILE OF LD.AO WITH THE SIMILAR DIRECTIO NS OF THE HONBLE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR THE RELEVA NT ASSESSMENT YEAR BECAUSE THE ISSUE WAS ON IDENTICAL FACTS. THE LD.DR ON THE OTHER HAND COULD NOT CONTROVERT TO THE SUBMISSION O F THE LD.AR. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD AND WE FIND MERIT IN THE 4 ITA NO.2850/CHNY /2017 SUBMISSIONS OF THE LD.AR. THE LD.CIT(A) IN HIS ORDE R DATED 31.08.2017 FOR THE ASSESSMENT YEAR 2009-10 HAD EXTR ACTED THE ORDER OF THE TRIBUNAL CITED BY THE LD.AR. THE SAME IS REPRODUCED HEREIN BELOW FOR REFERENCE:- EXTRACT FROM THE ORDER IN ITA NO.852/MDS/2013 DATE D 13.06.2014 FOR THE A.Y. 2007-08: 6. FROM THE ABOVE SCOPE OF SERVICES OF THE AGREEMEN T, WE DO NOT FIND ANY MANAGERIAL/TECHNICAL SERVICES ARE TO BE PROVIDED TO THE ASSESSEE BY THE OVERSEAS AGENT M/S. JAMES DRUCHAS, USA SO AS TO ATT RACT THE PROVISIONS OF SECTION 195 OF THE ACT. HOWEVER, THIS AGREEMENT WHI CH WAS ENTERED INTO ON 5.6.2008 IS RELEVANT TO THE ASSESSMENT YEAR 2009-10 AND THE ASSESSMENT YEAR UNDER APPEAL NOW BEFORE US IS 2007-08. NEITHER THE ASSESSEE NOR THE REVENUE PLACED AN AGREEMENT RELEVANT FOR THE ASSESS MENT YEAR UNDER CONSIDERATION. IN SUCH CIRCUMSTANCES, WE ARE NOT AB LE TO DECIDE THE ISSUE. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THIS MATTER HAS TO BE RE- EXAMINED BY THE ASSESSING OFFICER WITH REFERENCE TO THE AGREEMENT PREVAILING FOR THE ASSESSMENT YEAR 2007-08 AND THE CONDITIONS MENTIONED THEREON FOR THE RELEVANT ASSESSMENT YEAR I.E. 2007- 08. THEREFORE, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFF ICER TO EXAMINE AFRESH WITH REFERENCE TO THE AGREEMENT AND THE CASE LAWS RELIED ON THIS ISSUE. THE ASSESSEE SHALL PROVIDE AGREEMENTS WHICH ARE RELEVAN T TO THE ASSESSMENT YEAR. THE ASSESSING OFFICER SHALL PROVIDE ADEQUATE OPPORTUNITY TO THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. FROM THE ABOVE FACTS IT IS APPARENT THAT THE LD.CIT (A) HAD OVERSTEPPED THE ORDER OF THE TRIBUNAL ON THE IDENTI CAL ISSUE IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-0 8 WHILE DECIDING THE CASE OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR. THIS ACT OF THE LD.CIT(A) IS NOT APPRECIABLE. SINCE THE TRIBUNAL IN ITS ORDER DATED 13.06.2014, HAS REMITTE D BACK THE 5 ITA NO.2850/CHNY /2017 IDENTICAL ISSUE TO THE FILE OF LD.AO IN ORDER TO EX AMINE THE MATTER AFRESH IN THE LIGHT OF THE AGREEMENTS AND THE CASE LAWS RELIED BY THE ASSESSEE, THE SAME DECISION WILL APPLY FOR THE RELEVANT ASSESSMENT YEAR ALSO IN THE CASE OF THE ASSESSEE. T HEREFORE, WE HEREBY REMIT BACK THE MATTER TO THE FILE OF LD.AO W ITH SIMILAR DIRECTIONS AS STATED IN THE ORDER OF THE TRIBUNAL D ATED 13.06.2014 IN THE CASE OF THE ASSESSEE IN ITA NO.852/MDS/2013 FOR THE ASSESSMENT YEAR 2007-08. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 02 ND MAY, 2018 AT CHENNAI. SD/- SD/- ( ! ' . #$ ) ( . ) ( DUVVURU RL REDDY ) ( A. MOHAN ALANKAMONY ) # $% /JUDICIAL MEMBER $% / ACCOUNTANT MEMBER &# /CHENNAI, '$ /DATED 02 ND MAY, 2018 RSR $ )* +* /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. . ( )/CIT(A) 4. . /CIT 5. */0 1 /DR 6. 02 /GF