M/s. Elgi Rubber Company Ltd., Coimbatore V. DCIT, Coimbatore

ITA 3050/CHNY/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4905 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 22-08-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 31-10-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS S VIJAYA PRABHA
• Keywords: Depreciation; Double taxation relief

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI ... , , $ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A. NO. 3050/MDS/2016 / ASSESSMENT YEAR : 2012-13 M/S. ELGI RUBBER COMPANY LTD., 2000, TRICHY ROAD, SINGANALLUR, COIMBATORE 641 005. [PAN: AABCE 9596M] VS. DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE -2, COIMBATORE. ( / APPELLANT) ( / RESPONDENT) & ' / APPELLANT BY : SHRI. PHILIP GEORGE, ADVOCATE *+& ' / RESPONDENT BY : MRS. S. VIJAYAPRABHA, JCIT ' /DATE OF HEARING : 08.11.2017 ' /DATE OF PRONOUNCEMENT : 05.02.2018 /O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, COIMBATORE IN ITA NO. 80/15-16 DATED 29.07.2016 FOR ASSESSMENT YEAR 2012-13. :-2-: ITA NO. 3050/MDS/2016 2. M/S. ELGI RUBBER COMPANY LTD., THE ASSESSEE IS A MANUFACTURER AND SELLER OF TREAD RUBBER, BONDING GUM AND ALLIED PROD UCTS, RETREADING MACHINERY, RECLAIM RUBBER, PATCH, ENVELOPE, BVC, AB RASIVE TOOLS AND ACCESSORIES, INCOME FROM WINDMILL & TRADING IN SHAR ES AND SECURITIES. 3. IN THE ASSESSMENT MADE FOR ASSESSMENT YEAR 2012- 13, THE AO, INTER ALIA, FOUND THAT THE ASSESSEE HAS CLAIMED OVERSEAS PROFESSIONAL CHARGES ETC WITHOUT DEDUCTING TDS AS REQUIRED U/S. 40(A)(I) TOW ARDS WHICH BUT FOR FURNISHING THE BREAKUP, THE ASSESSEE DID NOT OFFER ANY EXPLANATION. HENCE, RELYING ON THE CBDT CIRCULAR 7 DATED 22.10.2009, IN WHICH THE CBDT HAS WITHDRAWN ITS EARLIER CIRCULARS NO. 23, 163 & 786, READ WITH EXPLANATION 4 TO SECTION 9(1)(VII) & SECTION 40(A)(I) DISALLOWED THE CLAIM. FURTHER, THE ASSESSEE CLAIMED RS. 7,22,825/- TOWARDS COST OF CONSTRUCTION ITS LTCG IN RESPECT OF ITS PUNE FLAT. SINCE, THE ASSESSEE HAS NOT PRODUCED AN Y PROOF TOWARDS THE COST OF CONSTRUCTION, THE AO REWORKED THE LTCG WITHOUT G IVING ANY CREDIT TOWARDS TO THE COST OF CONSTRUCTION. AGGRIEVED, THE ASSESS EE FILED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE PLEADE D RELYING ON THE ARTICLE 15 OF THE INDO-USA DTAA AND ARTICLE XIV OF THE INDO-AU STRALIA DTAA PLEADED TO ALLOW ITS CLAIM ON OVERSEAS PROFESSIONAL CHARGES. HOWEVER, THE CIT(A) HELD THAT THE IMPUGNED PAYMENTS FELL WITHIN ARTICLE 12 O F DTAA BETWEEN INDO-USA & INDO-AUSTRALIA DTAA AND ACCORDINGLY HELD THAT THE ASSESSEE SHOULD HAVE DEDUCTED TAX ON SUCH PAYMENTS, WHICH IT FAILED TO D O SO AND HENCE UPHELD THE :-3-: ITA NO. 3050/MDS/2016 ACTION OF THE AO. IN RESPECT OF THE COMPUTATION MA DE UNDER THE LTCG, THE CIT(A) UPHELD THE ACTION OF THE AO FOR THE REASON T HAT THE ASSESSEE DID NOT PROVIDE ANY CLEAR & CONVINCING EVIDENCE FOR THE BIF URCATION. 3. AGGRIEVED AGAINST THE ORDER OF THE CIT(A), THE ASSESSEE FILED THIS APPEAL, CHALLENGING THE DECISIONS OF THE CIT(A) ON THE ABOVE ISSUES AND ALSO PLEADING THAT THE CIT(A) DID NOT CONSIDER ITS PLEA VIZ ., GROUND NO 5 IN RESPECT OF SHORT CREDIT OF TDS BY RS. 23,70,329/-. 4. BEFORE US, THE ASSESSEE FILED A PAPER BOOK AND S OUGHT OUR ATTENTION TO THE PETITION FOR CLARIFICATION OF NAME OF OVERSEAS PROFESSIONALS AND PLEADED THAT BY OVERSIGHT THE NAME OF ONE OF THE OVERSEAS P ROFESSIONAL WAS INADVERTENTLY MENTIONED AS NARTON ROSE LLP, HOWEV ER, THE PAYMENT WAS ACTUALLY MADE TO MR. CHUCK STAND FIELD ONLY AND PRA YED THAT THE PAYMENT MADE TO OVERSEAS PROFESSIONALS MAY BE READ AS PER I TS PETITION FILED BEFORE US. ON MERIT, IT PLEADED THAT THE CIT(A) DID NOT CONSID ER PROPERLY ABOUT ARTICLE 15 OF THE IMPUGNED DTAAS AND WRONGLY PROCEEDED TO DECI DE ON ARTICLE 12. IN THIS REGARD, OUR ATTENTION WAS INVITED TO THIS TRIB UNAL DECISION IN THE ASSESSEES CASE FOR ASSESSMENT YEAR 2010-11 IN ITA NO. 1810/MD S/2012 DATED 05.08.2015 WHEREIN, SIMILAR ISSUE WAS REMITTED BACK TO THE AO FOR A FRESH CONSIDERATION IN THE LIGHT OF THE PRAYER MADE BY TH E AR. WITH REGARD TO THE COMPUTATION OF THE LTCG, THE AR INVITED OUR ATTENTI ON TO THE PAPERBOOK :-4-: ITA NO. 3050/MDS/2016 WHEREIN THE P&L A/C FOR THE ASSESSMENT YEAR 2003-04 ALONG WITH SCHEDULES AND RELEVANT ACCOUNT STATEMENTS ETC., WAS PLACED AN D INVITED OUR ATTENTION TO THE RELEVANT PARTICULARS. ALTERNATIVELY, HE SOUGHT OUR DIRECTION TO THE AO TO RE-WORK THE DEPRECIATION CLAIM. 5. THEREAFTER, THE AR INVITED OUR ATTENTION TO THE GROUND NO 5 TAKEN BEFORE THE CIT(A), SEEKING THE CIT(A) TO DIRECT THE AO TO ALLOW THE TDS CREDIT IN ENTIRETY, ON WHICH THE CIT(A) HAS NOT ADJUDICATE D THE MATTER. PER CONTRA, THE DR SUBMITTED THAT THE ASSESSEE HAS NOT PLACED R ELEVANT MATERIALS BEFORE THE AO AND THE CIT(A) CORRECTLY DECIDED THE ISSUES AND SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 6. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIAL. ON THE ABOVE FACTS AND CIRCUMSTANCES, WE DEEM IT FI T TO RESTORE THESE ISSUES TO THE AO FOR A FRESH EXAMINATION AND DUE DECISION BY A SPEAKING ORDER. THE AO AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE ASSE SSEE WOULD DECIDE THE ABOVE ISSUES IN ACCORDANCE WITH LAW. 7. IN THE RESULT, THE ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. :-5-: ITA NO. 3050/MDS/2016 ORDER PRONOUNCED ON MONDAY, THE 05 TH DAY OF FEBRUARY, 2018 AT CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) ! ' /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) ' /ACCOUNTANT MEMBER /CHENNAI, 1 /DATED: 05 TH FEBRUARY, 2018 JPV ' *23 43 /COPY TO: 1. &/ APPELLANT 2. *+& /RESPONDENT 3. 5 ( )/CIT(A) 4. 5 /CIT 5. 3 * /DR 6. 7 /GF