Nirma Limited, Ahmedabad V. The Dy.CIT, TDS, CPC,

ITA 3143/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6009 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 28-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY
• Assessee Lawyers: H C SHAH
• Section: 143(3); 194C; 154

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA NO.3143/AHD/2014 / ASSTT. YEAR: 2014-2015 NIRMA LIMITED NIRMA HOUSE, ASHRAM ROAD AHMEDABAD. PAN : AAACN 5350 K VS. DCIT, CENTRALISED PROCESSING CELL TDS GHAZIABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI H.C. SHAH, AR REVENUE BY : SHRI ALBINUS TIRKEY, SR.DR ! / DATE OF HEARING : 21/02/2018 '#$ ! / DATE OF PRONOUNCEMENT: 01/03/2018 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-XXI DATED 22.10.2014 PASSED FOR THE ASSTT .YEAR 2014- 15. 2. GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CI(A) H AS ERRED IN RELEGATING ISSUE TO THE AO FOR VERIFICATION OF STAT US OF DEDUCTEES FOR THE PURPOSE OF APPLYING RATE OF TDS UNDER SECTI ON 194C OF THE INCOME TAX ACT, 1961. ITA NO.3143/AHD/2014 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS MADE PAYMENT TO SPECIFIC FAMILY TRUST. IT HAS DEDUCTED TDS AT THE RATE OF 1% BECAUSE ALL DEDUCTEES ARE INDIVIDUAL IN NATUR E. DCIT, TDS, CPC HAS APPLIED RATE OF TDS DEDUCTION AT 2% IN COMP UTERIZED PROCESSING OF ALL THE RETURNS. THE ASSESSEE FILED APPLICATION UNDER SECTION 154 OF THE ACT AND POINTED OUT THAT DEDUCTE ES WERE INDIVIDUAL, AND THEREFORE, TDS WAS DEDUCTED AT 1%. THE AO ERRED IN RAISING THE DEMAND OF RS.4,32,580/- WHICH INCLUD ES SHORT DEDUCTION AS WELL AS INTEREST. THE LD.CIT(A) HAS R EMITTED THE ISSUE TO THE AO WITH DIRECTION THAT HE WOULD VERIFY STATUS OF THE DEDUCTEES AND WOULD APPLY CORRECT RATE. SUBMISSION S GIVEN BY THE ASSESSEE BEFORE THE LD.CIT(A) AND FINDING RECOR DED THEREIN READ AS UNDER: (E) AS REGARDS TO SHORT DEDUCT OF OTHER ENTITIES C ONCERNED, IT IS SUBMITTED THAT OTHER DEDUCTEES ARE THE PROPRIETA RY CONCERN OF SPECIFIC FAMILY TRUST. THE NAME OF PROPR IETARY CONCERN BEING TRUST AND THEIR RESPECTIVE PAN ARE GI VEN HERE UNDER. SR. NO . NAME OFDEDUCTEE (BUSINESS ENTITY) NAME OFASSESSEE (OWNER OF BUSINESS ENTITY) PAN OF DEDUCTEE 1 NIRAV LAMINATION SHIVSHAKTI SPECIFIC FAMILY TRUST AABTS0633 C 2 RADHE PACKAGING & KEVIN CARBOCHEM KAMAL NAYAN SPECIFIC FAMILY TRUST AAATK8058 L 3 BHOOMI PRINT PACK DEVIKRUPA SPECIFIC FAMILY TRUST AAATD2843 C 4 BHOOMI PACKAGING NAVNIDHI SPECIFIC FAMILY TRUST AAATN0750 E ITA NO.3143/AHD/2014 3 5 KORAN PAPER MILLS NILKANTH SPECIFIC FAMILY TRUST AAATN1399 K IT IS SUBMITTED THAT THE ABOVE REFERRED 6 DEDUCTEES ARE OWNED BY 5 SPECIFIC TRUSTS. IT IS SUBMITTED THAT TH E TDS U/S.194C IS TO BE DEDUCTED @ 1% SINCE THE STATUS OF THE RESPECTIVE ABOVE ENTITY IS 'INDIVIDUAL'. THE ASSESSMENT ORDER OF NILKANT SPECIFIC FAMILY TRUST F OR A. Y. 2009-10 DTD. 23-12-11 IS ENCLOSED HEREWITH ANNEXURE-E. IT MENTIONED THAT THE STATUS OF ASSESSE IS THAT OF 'INDIVIDUAL'. PLEASE REFER TO SL. NO. 5 OF 1ST PAGE OF ASSESSMENT ORDER. ' 3.1 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT, AS PER THE LATEST ORDER OF DCIT, TDS, CP C U/S. 154, THERE IS DEMAND OF RS.4,32,580/- WHICH INCLUDES SHORT DEDUCTION OF RS.3,80,694/-. THE SHOR T DEDUCTION OF RS.3,79,285/- AGAINST FIVE PARTIES IS MAINLY BECAUSE RATE OF TDS DEDUCTION HAS BEEN TAKEN AT 2% TREATING THE DEDUCTEE OTHER THAN INDIVIDUAL/H UF. THE APPELLANT HAS SUBMITTED THAT DEDUCTEE IN THESE FIVE CASES ARE TRUSTS, THEREFORE, RATE OF TDS DEDUCTION IS 1%. THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE STATUS OF DEDUCTEE AND IF THE DEDUCTEE STATUS IS INDIVIDUAL/HUF, THEN THE AO IS DIRECTED TO APPLY THE RATE OF 1% FOR THE PURPOSE OF DEDUCTION AS SUBMITTE D IN FORM 26Q. 4. THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT T HERE IS NO POWER WITH THE CIT(A) TO SET ASIDE ANY ISSUE. THE LD.CIT(A) OUGHT TO HAVE DECIDED THE ISSUE ON MERIT. HE ALSO PLACED ON RECORD COPY OF THE ORDER PASSED IN THE CASE OF NILKANT SPECIFIC FAMILY TRUST HAVING PAN AAAATN1399K. THIS ASSESSMENT ORDER HAS BEEN PASSED FOR THE A.Y.209-10 UNDER SECTION 143(3) OF T HE ACT. STATUS OF THIS ASSESSEE HAS BEEN SHOWN AS INDIVIDUAL. COP Y OF THE ASSESSMENT ORDER IS AVAILABLE ON PAGE NO.17 OF THE PAPER BOOK. SIMILARLY, ASSESSMENT ORDER OF M/S.DEVIKRUPA SPECIF IC FAMILY TRUST HAS BEEN PLACED ON PAGE NO.20 OF THE PAPER BOOK. I TS STATUS IS ITA NO.3143/AHD/2014 4 ALSO INDIVIDUAL. THE LD.DR WAS UNABLE TO CONTROVER T THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE. 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. THE ASSESSEE HAS DEMONSTRATE D THAT DEDUCTEES WERE ASSESSED IN INDIVIDUAL STATUS, AND T HEREFORE, RATE OF TAX APPLICABLE IN THEIR CASE FOR DEDUCTION AT SO URCE U/S.194C WAS AT THE RATE OF 1%. THE ASSESSEE HAS DEDUCTED T HE TAX AT THAT RATE. THE LD.AO HAS ERRED IN APPLYING THE RATE AT 2%. WE ALLOW THE APPEAL OF THE ASSESSEE AND QUASH THE PRIMA FACIE ADJUSTMENT MADE BY THE AO TO THE ABOVE EXTENT. IN OTHER WORDS , DEMAND RAISED AT RS.4,82,580/- IS DELETED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 1 ST MARCH, 2018. SD/- SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER