ITO (TDS) 2(3), MUMBAI V. MILTON PLASTIC LTD, MUMBAI

ITA 3132/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2863 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 05-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NOS.3132 & 3133/MUM/2014 ASSESSMENT YEARS: 2004-05 & 2005-06 ITO(TDS)-2(3), R. NO.708, 7 TH FLOOR, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD, MUMBAI-400002 / VS. M/S MILTON PLASTIC LIMITED, ASIAN BUILDING, 4 TH FLOOR, R. KAMANI MARG, BALLARD ESTATE, MUMBAI-400001 ( / REVENUE) ( !'# $ /ASSESSEE) PAN. NO. AACCM 4047Q / REVENUE BY SHRI VIJAY KUMAR SONI !'# $ / ASSESSEE BY NONE % & $ ' / DATE OF HE ARING : 28/10/2015 & $ ' / DATE OF ORDER: 06/11/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) BOTH THESE APPEALS ARE BY THE REVENUE AGGRIEVED BY THE IMPUGNED ORDERS DATED 18/02/2014 OF THE LD. FIRST A PPELLATE AUTHORITY, MUMBAI. THE ONLY COMMON GROUND RAISED IN THIS APPEAL PERTAINS TO HOLDING THAT TAX AT SOURCE WAS N OT TO BE DEDUCTED FROM THE REIMBURSEMENT OF EXPENDITURE AND M/S MILTON PLASTIC LIMITED ITA NOS. 3132 & 3133/MUM/2014 2 THEREFORE, DELETING THE ADDITION MADE U/S 201(1)/20 1(1A) OF THE ACT ON THE PAYMENTS MADE TO M/S MILTON CONSULTA NCY SERVICES AS THE PAYMENTS ARE SUBJECT TO TDS, AS PER THE PROVISIONS OF SECTION 194J OF THE ACT. 2. DURING HEARING OF THIS APPEAL, SHRI VIJAY KUMAR SONI, LD. DR, ADVANCED HIS ARGUMENTS WHICH IS IDENT ICAL TO THE GROUND RAISED. NONE WAS PRESENT FOR THE ASSESSE E, IN SPITE OF ISSUANCE OF REGISTERED NOTICE, THEREFORE, WE HAVE NO OPTION TO PROCEED EX-PARTE, QUA THE ASSESSEE, AND P ROCEED TO DISPOSE OFF THESE APPEALS ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 2.1. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE F ACTS, IN BRIEF, ARE THAT THE ASSESSEE WAS HELD TO BE IN DEFA ULT FOR NOT DEDUCTING TAX U/S 194J ON REIMBURSEMENT EXPENSES MA DE TO MILTON CONSULTANCY SERVICES. IN PARA -3 (PAGE-2) OF THE IMPUGNED ORDER, THERE IS UNCONTROVERTED FINDING THA T THE ASSESSEE PAID THE AMOUNT OF RS.45,43,759/- DURING T HE PREVIOUS YEAR RELEVANT TO A.Y. 2005-06 TO M/S MILTO N CONSULTANCY SERVICES BEING THE COST OF DEPUTATION O F MAN POWER. THIS REIMBURSEMENT IS TOWARDS THE SALARY PAI D TO THE EMPLOYEES OF MILTON CONSULTANCY SERVICES, WHO ARE D EPUTED TO WORK FOR THE ASSESSEE. WE FURTHER NOTE THAT IN PARA 3.1 OF THE IMPUGNED ORDER, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS DULY CONSIDERED THE SUBMISSIONS OF THE ASSESSEE ALONGWITH VARIOUS JUDICIAL PRONOUNCEMENTS LIKE UNITE HOTELS LTD. VS ITO (2005) 93 TTJ (DEL.) 822, EXPEDITORS M/S MILTON PLASTIC LIMITED ITA NOS. 3132 & 3133/MUM/2014 3 INTERNATIONAL (I) PVT. LTD. VS ADDL.CIT (2008) 118 TTJ (DEL.) 652. THE ASSESSEE BEFORE THE LD. COMMISSIONER OF IN COME TAX (APPEALS) ADMITTED THAT NO DOUBT THERE WAS A COMBIN ED BILL BUT A CLEAR BRAKE UP OF SERVICE CHARGES AND REIMBUR SEMENT COMPONENT WERE EXPLAINED WITH THE HELP OF SEPARATE BILLING AND ACCOUNTED SEPARATELY. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE. CBDT CIRCULAR NO.715 D ATED 08/08/1995 WAS ALSO CONSIDERED BY THE LD. COMMISSIO NER OF INCOME TAX (APPEALS), THUS, THE ASSESSEE WAS RIGHTL Y HELD TO BE NOT LIABLE FOR DEDUCTING THE TAX AT SOURCE WHEN REIMBURSEMENT COMPONENT WAS ACCOUNTED SEPARATELY BY WAY OF A DEBIT NOTE. THE ISSUE OF NON-DEDUCTION OF TDS U/S 194A OF THE ACT ON INTEREST OF RS.1,21,01,977/- ON NON-C ONVERTIBLE DEBENTURES OF RS.2 CRORES ISSUED TO THE FEDRAL BANK LTD. HAS BEEN DISCUSSED IN PARA 4.1 AND 4.2 (AT PAGE-5) IN T HE IMPUGNED ORDER, WHEREIN, THE ASSESSEE WAS HELD TO B E LIABLE FOR DEFAULT. HOWEVER, FOR THE ISSUE IN HAND, WE FIN D NO INFIRMITY IN THE CONCLUSION OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AS NO CONTRARY EVIDENCE WAS BROUGHT O N RECORD BY THE REVENUE. FINALLY, THE APPEALS OF THE REVENUE ARE DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. DR AT THE CONCLUSION OF THE HEARING ON 28/10/2015. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % MUMBAI; ( DATED : 06/11/2015 M/S MILTON PLASTIC LIMITED ITA NOS. 3132 & 3133/MUM/2014 4 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 1$ ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1$ / CIT(A)- , MUMBAI 5. 34 .$ ! , 0 *+' *! 5 , % / DR, ITAT, MUMBAI 6. 6' 7% / GUARD FILE. / BY ORDER, /3+$ .$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI.