M/s. Styrolution ABS (India) Ltd., ( Formerly known as Ineos ABS (India) Ltd.), Baroda V. The ACIT., TDS Range, Baroda

ITA 2982/AHD/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0726 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 12-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRA SOON KABRA HEARING CONCLUD
• Assessee Lawyers: SUNIL H TALATI
• Section: 133A; 201(1)

Judgement Text

I.T.A. NO S .: 2 982, 2983 & 2984 /AHD/201 4 ASSESSMENT YEARS: 20 0 8 - 09, 2009 - 10 & 2010 - 11 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] I.T.A. NO S . : 2 982, 2983 & 2984 /AHD/201 4 ASSESSMENT YEAR S: 20 0 8 - 09, 2009 - 10 & 2010 - 11 STYROLUTION ABS (INDIA) LIMITED ..... ............APPELL ANT (FORMERLY KNOWN AS INEOS ABS (INDIA) LIMIT E D) 6 TH FLOOR, ABS TOWER, O.P. ROAD, BARODA 390 012. [A AACD 6164 H ] VS ASSTT. COMMISSIONER OF INCOME , TDS RANGE, BARODA. .. ...........RESPONDENT APPEARANCES BY SUNIL H. TALATI FOR THE APPELLANT PRA SOON KABRA FOR THE RESPONDENT HEARING CONCLUDED ON: 29 /0 8 /16 ORDER PRONOUNCED ON : 30 /08/16 O R D E R PER PRAMOD KUMAR , AM: 1. BY WAY OF THESE APPEALS, ASSESSEE APPELLANT HAS CHALLENGE D CORRECTNESS OF THE SEPARATE ORDERS, ALL DATED 01.08 .2014, PASSED BY THE LEARNED CIT ( A ) UPHOLDING PENALTIES OF RS.71,66,583/ - , RS.51,62,629/ - & RS. 40,71,216/ - IMPOSED UNDER SECTION 271C OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEARS 2008 - 09, 2009 - 10 & 2010 - 11 RESPECTIVELY. SINCE T HESE THREE APPEALS P ERTAIN TO THE SAME ASSESSEE, INVOLVE A COMMON ISSUE AND WERE HEARD TOGETHER, AS A MATTER OF CONVENIENCE, THEREFORE, ALL THESE APPEALS ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER. WE WILL FIRST TAKE UP ITA NO.2982/AHD/2014. IN THIS APPEAL, T HE GRIEVANCE OF THE ASSESSEE IS THAT THE LEARNED CIT ( A ) HAS ERRED IN UPHOLDING THE IMPUGNED PENALTY OF R S. 71,66,583/ - . I.T.A. NO S .: 2 982, 2983 & 2984 /AHD/201 4 ASSESSMENT YEARS: 20 0 8 - 09, 2009 - 10 & 2010 - 11 PAGE 2 OF 3 2. BRIEFLY STATED RELEVANT MATERIAL FACTS ARE LIKE THIS. DURING THE COURSE OF SURVEY UNDER SECTION 133A CONDUCTED ON THE ASSESSEE, IT WA S SUBMITTED THAT WHILE THE ASSESSEE HAS MADE SUBSTANTIAL AMOUNT OF PAYMENT S TO CONSIGNMENT DEALERS IN THE OF IN T HE NAME OF DISCOUNT S AND REBATE S, THE ASSESSEE DID NOT DEDUCT TAX A T SOURCE UNDER SECTION 194H OF THE ACT IN RESPECT OF THE SAME. ACCORDINGL Y , DEMAND UNDER SECTION 201(1) & 201 (1 A ) READ WI T H SEC TION 194H WERE RAISED ON THE ASSESSEE. THE MAT T ER FINALLY TRAVELLED IN APPEAL BEFORE A CO - ORDINATE BENCH OF THIS TRIBUNAL WHICH DELETED TH E SAID TAX WITHHOLDING DEMAND BY OBSERVING INT E R ALIA TH A T WE FIND FORCE IN THE ARGUMENT S OF THE L EARNED A UTHORISED REPRESENTATIVE THAT THE NATURE OF PAYMENT IS OF DISCOUNT AND NOT COMMISSION WHICH IS LIAB LE FOR TDS ....... T HE MATTER , HOWEVER , DID NOT REST AT THAT. THE ASSESSING OFFICER ALSO IMPOSED PENALTY UNDER SECTION 271C FOR ASSESSEE S FAILU RE TO DEDUCT TAX AT SOURCE. IN APPEAL, LEARNED C I T ( A ) CONFIRMED THE IMPUGNED PENALTY BY HOLDING INTER ALIA THAT ASSESSEE S SUBMISSION THAT THE PRE - SALE AND POST - SALE SERVICES RENDERED BY THE CONSIGNMENT AGENTS ARE NOT COV ERED BY THE PROVISIONS OF SECTION 194H IS ALSO NOT CORRECT . 3. THE ASSESSEE IS AGGRIEVED AND IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS E D THE MATERIAL ON RECO R D. WE FIND THAT THE CO - ORDINATE BENCH OF T H IS T RIBUN A L IN ASSES SE E S OWN CASE HAS COME TO THE CONCLUSION THAT THERE IS MERIT IN ASSESSEE S STAND TO THE EFFECT THAT THE NATURE OF PAYMENT IS OF DISCOUNT AND NOT COMMISSION WHICH IS LIABLE FOR TDS . THE BENCH HAS BEEN THUS OF THE VIEW THAT THE PROVISIONS OF SECTION 194H DID NOT APPLY TO THE FACTS OF THIS CASE. IN THIS VIEW OF THE MA T TER, WE SEE NO LEGALLY SUSTAINABLE B ASIS FOR THE IMPUGNED PENALTY . IN ANY EVENT, THE ASSESSEE CANNOT BE FAUL T ED FOR HAVING HELD REASONABLE BELIEF THAT TH E AMOUNT IN QUESTION DID NOT INVOLVE ANY T A X DEDUCTION AT SOURCE FOR THE RE A SONS THAT TH E SE WERE OUTSIDE THE SCOPE OF SECTION 194H WHICH REMAINS CONFINED TO COMMISSION AND DOES NOT EXTEND TO TRADE DISCOUNT. IN VIEW OF THESE DISCUSSIONS AND BEARING IN MIND THE ENTIRETY OF THE CASE, IMPUGN E D PENALTY UN D ER SECTION 271C IS DEVOID OF ANY LEGALLY SUSTAINABLE MERITS. W E , THEREFORE , DELETE THE SAME. I.T.A. NO S .: 2 982, 2983 & 2984 /AHD/201 4 ASSESSMENT YEARS: 20 0 8 - 09, 2009 - 10 & 2010 - 11 PAGE 3 OF 3 5. IN THE RESULT, APPEAL ITA NO.2982/AHD/2014 FOR ASSESSMENT YEAR 2008 - 09 IS ALLOWED. 6 . AS REGARDS APPEAL FOR THE ASSESSMENT YEARS 2009 - 10 & 2010 - 11 I.E. ITA NOS. 2983 & 2984/AHD/2014, LEARNED REPRESENTATIVES FAIRLY AGREE THAT W HATEVER WE DECIDE FOR THE ASSESSMENT YEAR 2008 - 09 WILL APPLY MUTATIS MUTANDIS FOR THESE TWO ASSESSMENT YEARS AS WELL. THESE TWO APPEALS ARE ALSO THEREFORE ALLOWED. 7. IN THE RESULT, ALL THE THREE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON 30 TH DAY OF AUGUST, 2016. SD/ - SD/ - S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 30 TH DAY OF AUGUST ,2016 . COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDA BAD