Krishnapatnam Port Company Limited, Hyderabad V. Asst. Commissioner of Income Tax(TDS), TDS Range-1, Hyderabad

ITA 319/Hyd/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8273 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 13-02-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 14-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: V RAGHAVENDRA RAO
• Keywords: Condonation of delay; TDS
• Section: 133A; 234B; 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH ES A , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER I TA NO. A . Y. APPELLANT RESPONDENT 275/HYD/18 2011 - 12 DEPUTY COMMISSIONER OF INCOME T AX, TDS CIRCLE - 1(1), HYDERABAD M/S. KRISHNAPATNAM PORT C OMPANY LIMITED, HYDERABAD [ T AN: HYDK00599 E] 276/ HYD/18 2011 - 12 318/HYD/18 2011 - 1 2 M/S. KRISHNAPATNAM PORT C OMPANY LIMITED, HYDERABAD [PAN: AAACK8657J ] ASST. COMMISSIONER OF INCOME TAX ( T DS) , TDS CIRCLE - 1(1), HYDERABAD 319/HYD/18 2011 - 12 A DDL . COMMISSIONER OF INCOME TAX (TDS) , TDS RANGE - 1 , HYDERABAD FOR ASSESSEE : SHRI V. RAGHAVENDRA R A O , AR FOR REVENUE : SHRI NILA N JAN DEY , DR DATE OF HEARING : 13 - 0 2 - 201 9 DATE OF PRONOU NCEM E N T : 12 - 0 4 - 2019 O R D E R PER S. RIFAUR RAHMAN, A.M. : TH E S E APPEAL S ARE FILED BY BOTH A SSESSEE AND REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 8 , HYDERABAD . SINCE THE FACTS AND ISSUES INVOLVED IN A LL THESE APPEAL S ARE COMMON AND IDENTICAL, ALL THESE APPEALS ARE HEARD TOGETHER AND ARE BE ING DISPOSED BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. M/S. KRISHNAPATNAM PORT COMPANY LTD., : - 2 - : CONDONATION OF DELAY: 2. AS FAR AS THE REVENUE APPEALS ARE CONCERNED, THE REVENUE HAS FILED TH ESE TWO APPE A LS WITH A DELAY OF 03 DAYS. FOR THAT REVENUE HAS FILED AFFIDAVIT S , SEEKING CONDONATION OF DELAY IN FILING THE APPEAL S . 2.1. CONSIDERING THE PETITION S FOR CONDONATION OF DELAY IN RESPECT OF REVENUE AN D BEING SATISFIED WITH THE REASONABLE C AUS E FOR THE DE L A Y, WE HEREBY CONDONE THE DELAY IN FILING THE APPEAL S , WHICH ARE ADMITTED BEING HEARD ON MERITS. F IRST OF ALL , WE SHALL DI SCUSS HEREWITH THE APPEALS RELATING TO SECTION 201 (1) & 201(1A) OF THE ACT. FOR THE SAKE OF CLARI TY, FACTS RELATING TO ASSESSEE S A P PEAL IN ITA NO. 31 8 /HYD/2018 ARE DISCUSSED HEREUNDER: 3. BR I EF FACTS OF THE CASE ARE THAT ASS ESSEE - COMPANY IS ENGAGED IN THE BUSINESS OF CONSTRUCTION AND OPERATION OF SEA PORT AT KRISHNAPATNAM , NELLORE DISTRICT , ANDHRA PRADESH . A TDS SURVE Y U /S. 133A OF T HE INCOME TAX ACT [ACT] WAS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE - COMPANY ON 12 - 0 9 - 2013 . D URING THE SURVEY, IT WAS O BSERVED THAT THE ASSESSEE - COMPANY DID NOT ADHERE TO THE PROVISIONS OF TDS IN RESPECT OF DEDUCTION UNDER CERTAI N S ECTIONS AND R EMITTANCE OF THE SAME IN TO GOVERNMENT ACCOUNT W ITHIN THE STATUTORY DUE DATES. ACCORDINGLY, N OTICES WERE ISSUED AND SERVED ON THE ASSESSEE . O N THE BASIS OF THE INFORMATION AVAILA B LE AND EXAMINATION OF BOOKS, IT IS NOTICED THAT ASSESSEE HA S M ADE PAYMENT T O THE EXTENT OF RS. 331.38 CR ORES DURING THE MONTH M/S. KRISHNAPATNAM PORT COMPANY LTD., : - 3 - : OF MAY, 2010 AND JUNE , 2010 TO M/S. NAVAYUG A ENGINEERING COMPANY LIMITED (NECL) , AN EPC CONTRACTOR OF THE ASSESSEE - COMPANY AND SISTER CONCERN . ON VERIFICATION OF THE RECORDS, IT IS NOTICED TH AT ASSESSEE H AS MADE TDS DEDUCTION FOR AN AMOUNT OF RS. 272.13 CRORES @2% ON 31 - 03 - 2011 AND THE SAME WAS RE MITTED TO THE GOVERNMENT ACCOUNT ON 04 - 08 - 2011. O UT OF THE BALANCE AMOUNT OF RS. 59.24 CRORES, RS. 54.24 CRORES WAS PAID TO M/S. NAVAYUGA UDIPI TO LLW AY PRIVATE L I MITED (NUTPL) TOWARDS SHARE APPLICATION MONEY . B UT IT WAS DEB ITED TO THE ACCOUNT OF NECL, EPC A/C. T HE ASSESSEE HAS ADMITTED TO THE EXTENT OF RS. 5 CRORES, NO TDS WAS MADE DURING THI S PERIOD. A CCORDINGLY, THE ASSESSING OFFICER MA DE ADDITIONS U/S. 201(1) & 201(1A) OF THE ACT O F RS. 5 CRORES AS WELL AS RS. 54.25 CRORES. F URTHER, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS NOT REMITTED THE TDS IN TO THE ACCOUNT OF C ENTRAL GOVERNMENT WITHIN THE TIME AND CALCULATED U/S. 201(1 A ) INTEREST FOR THE DELAY IN REMIT TANCE TO TH E GOV ERNMENT A/C. 3.1. AGGRIEVED WIT H THE ABOVE ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) . 4. BEFORE THE LD.CIT(A) , ASSESSEE SUBMITTED REGARDING TDS OF RS. 5 CRORES , AS U ND ER: THE AR SUBMITTED THAT M / S. NECL, TO WHOM THE SAID PA YMENT OF RS . 5 CRORES WAS M A DE WITHOUT EFFECTING TDS, HAS SINCE FILED THE RETURN OF I NCOME FOR THE A.Y. 20 1 1 - 12 A ND ADM IT TED THE AMOUNT OF RS. 5 CRORES AS RECEIPTS AND IN SUPPORT OF THE SAME, A CKNOWLEDGEMENT PAGE OF THE RETURN OF NECL WAS SUBMITTED. THE A R SUBMITTED THAT AS PER THE JUDGMENT OF SUPREME COURT IN THE CASE OF CIT VS. HINDUSTAN COCA - COLA BEVERAGE LTD. (29 3 I TR 22 6), WHEN THE PAYEE HAS ADMITTED THE RECEIPTS IN ITS RETURN OF INCOM E, THE PAYER SHOULD NOT BE HELD TO BE AN ASSESSEE IN DEFAULT AND TH EREFORE THE COMPUTATION OF SHORT DEDUCTION ULS 201(1) MAY BE DELETED. M/S. KRISHNAPATNAM PORT COMPANY LTD., : - 4 - : WITH REGARD TO INTEREST U / S 201(1 A ), IT WAS SUB MITTE D THAT THE A O CHARGED I NTEREST UPTO THE MONTH OF THE ASSESS MENT ORDER WHERE AS IT SHOULD HAVE BEEN L EVIED ONLY UPTO THE DATE OF PAYMEN T OF TAX BY THE PAYEE . 4 . 1. REGARDING THE SAID ISSUE , THE LD.CIT(A) HELD AS UNDER: 5. I HAVE CONSIDERED THE I SSU E AND SUBMISSIONS MAD E BY THE A R. THE APPELLANT PAYER SHALL NOT BE HELD TO BE AN 'ASSESSEE IN DEFAU L T ONLY IF THE PAYEE HAS FURNISHED HIS RETURN OF I N COME U/S. 139; HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING THE INCOME; AND HAS PAID THE TAX DUE ON T HE INCOME DECLARED BY HI M; AND FURNISHES CERTIFICATES TO THIS EFFECT FROM AN ACCOUNTANT IN FORM N O . 26 A AS PER PROVISO TO SECT ION 201(1). IN T HE PRESENT C ASE, THE CERTIFICATE BY THE ACCOUNTANT IN THE PRESCRIBED FORM I.E. FORM 26 A WAS NOT FURNISHED BY THE A PPE LLANT. SINCE THE COND ITIONS LAID DOWN IN THE PROVISO TO SECTION 201(1) HAVE NOT BEEN FULFILLED, THE ASSESSEE IS HELD TO BE AN 'ASSESSEE IN DEFAULT' AN D THE DEMAND RAISED BY THE A O U/S.201(1) IS UPHELD. A S REGARDS THE LE VY OF INTEREST U/S. 201(1 A ), SIN CE THE APPELLANT FAILED TO FURNISH THE SAID CERTIF I CATE I .E. FORM NO. 26 A FROM AN ACCOUNTANT IN RESPECT OF THE PAYEE, INTEREST SHALL BE L EVIAB LE FROM DAT E OF CREDITING THE SAID AMOUNT IN THE BOOKS OF ACCO UNT OF THE PAYER TILL THE DATE OF PASSING OF THE IMP UGN ED ORDER. THEREFORE, INTEREST LEVIED BY THE A O U/S. 201(1 A ) OF RS. 5,70,000/ - IS UPHELD AND THE GROUND OF A PP EA L IS DISMISSED . 5 . BEFORE THE LD.CIT ( A), ASSESSEE SUBMITTED REGARDING PAYMENT OF RS. 54.24 CRORES , AS U NDER: THE AR SUBMITT ED THAT THE SAID AMOUNT WAS TRANSFERRED THROUGH RTGS FROM THE ICICI BANK OF THE APPELLANT TO THE BANK ACCOUNT OF NUTPL TOWARDS SHARE APPLICATION MONEY AND S UBMITTED A C OPY OF THE LETTER WR ITT EN BY THE APPE L LANT T O I CICI BANK FOR TRANSFER FUNDS TH RU RTGS TO NUTPL AND ALSO COPY OF THE ICICI BANK STATEMENT EVIDENCING THE TRANSFER OF SAID FUNDS ON 25.06.2010 TO NUTPL, WHICH HAVE BEEN PRODUCED BEFORE THE AO. THE F ACT IS THAT NUTPL A L LOTTED SHARE S T O THE APPE L LANT COMPA NY AND THE AR ENCLOSED RELEVANT MINUTES OF NUTPL IN TH IS REGA R D. THE APPELLANT ALSO FURNISHED AUDITED BA L ANCE SHEET ( SCH E DUL E - 6) OF THE APPE L LANT AS ON 31.03.2011 WHEREIN, THE SAID AMOUNT WAS SHOWN AS INVESTME N T IN THE SHARES OF M / S. N UTPL . THE ENTIRE CO N FUSION HAPPENED DUE TO POSTING OF WRONG ENTRIES IN THE LEDGER, W HICH HAVE BEEN CORRECTED LATER. THE AR SUBMITTED THAT THE AO MISDIRECTED HIM SE L F BY TREATING THE SAID AMOUNT AS TOWARDS EXECUTION OF CO NTRACT BY N E CL AND NOT TOWARDS S HAR E APPLICATION MONEY I N NUTPL IN SPITE OF PRODUCING AIL THE RELEVANT EVIDENCES LIKE BANK STATEMENT OF THE APPE L LANT EVIDENCING THE TRANSFER OF M/S. KRISHNAPATNAM PORT COMPANY LTD., : - 5 - : FUNDS TO NUTPL, BOAR D RESOLUTION OF A L LOTMENT OF SHARE BY NUTPL, REFLECTION OF THE SAID IN V ESTMENT IN THE BALAN CE SHEET OF THE APPELLAN T ETC. THE AO REJECTED THE CONTENTIONS . .. . 5 . 1. REGARDING THE SAID ISSUE , THE LD.CIT(A) HELD AS UNDER: 6.3 I HAVE CAREFULLY CONSIDERED THE ISSUE AND SUBMISSIONS MADE BY THE AR. FROM THE EVIDEN CES FURNISH E D BY THE APPELLANT IN THE FORM OF LETTER TO THE BANK TO REMIT THE S AI D A M OUNT TO NUTPL VIDE LE TTER DT. 25.06.2010, REFLECTION OF THE SAID AMOUNT IN THE BANK ACCOUNT OF APPELLANT ON THE SAME DATE I.E. 25.06.2010, BOARD RESOLUTION OF NUTPL ALLOTT ING SHARES F OR THE SAID AMOUNT TO THE APPELLANT, APPEAR ANCE OF THE SAID PAYMENT A S INVEST MENTS IN THE SHARES OF NUTPL IN THE BOOKS OF ACCOUNT OF THE APPELLANT (BALANCE SHEET AS ON 31.03.2011) DEMONSTRATE THAT THE SAID PAYMEN T WAS MAD E BY THE APPELLANT TOWA RDS SHAR E A P PLICATION MONE Y IN NUTP L . AS STATED BY THE APPELLANT, A MISTAKE APP EA RS TO HAVE HAPPENED WHILE RECORDING THE SAID TRANSACTION W H E REIN IT WAS DEBI TED TO THE ACCOUNT OF NEC L RAISING DOUBTS IN THE MIND OF THE A O T HAT T H E SA ID PAYMENT WAS TOWARDS C ONTRACT PAY M ENTS. IN VIEW OF THE EVIDENCES SU B MITTED BY THE APPE L LANT DURING TH E COURSE OF PROCEEDINGS BEFORE THE A O AND ALSO DURING THE APPEAL PROCEEDINGS, THE PAYMENTS MADE TO NUTP L IS HELD TO BE TOWARDS SHARE APPLICATI ON MONEY AND THEREF O RE THE PR O VISIO NS OF TDS A R E NOT APPLICAB LE . THEREFORE, THE CONSEQUENT DEMAND AND INTEREST THE RE ON RAISED IN THIS REGARD IS DELETED AND THE GROUND OF APPEAL IS ALLOWED . 6. THE NEXT ISSU E BE FORE THE CIT(A) IS THAT THE ASSESSEE HAS DEDUCTED TDS AND HAS REMITTED BELATEDL Y ON VARIOU S DATES. T HE SECTION WISE DETAILS OF THE LATE REMITTANCES AND IN TE REST THEREON ARE GIVEN BELOW : SECTION AMOUNT PAID TDS DEDUCTED INTEREST U/S. 201(1A) 192 15,20,66,943. 3,75,12,729 23,07,604 194A 10,85,29,916 1,08,52,993 4,09,201 194C 5 ,49,58,03,0 6 1 10 ,28,61,663 94,08,095 194H 2,65,720 26,572 784 194I 25 ,17,40,5 57 77,31,992 2,11,977 194J 53,99,14,931 2,30,62,576 5,02,042 TOTAL INTEREST U/S. 201(1A) 1,28,39,703 M/S. KRISHNAPATNAM PORT COMPANY LTD., : - 6 - : 6.1. T HE LD.AR OF THE ASSESSEE RAISED TH IS ISSUE BEFORE THE LD.CIT(A) A S UNDER: IT WAS SUBMITTED THAT ADVANCE PAYM ENTS WERE GIVEN TO NEC L EARLIER WHICH HAVE BEEN ADJUSTED AGAINST THE RUNNING ACCOUNT (RA) BILLS RAISED BY NEC L . AS PER THE AR, TAX IS DEDUCTABLE AT THE TIME O F CREDITING OF THE SUM TO THE ACCOU NT OF THE CO NT RAC TOR OR AT T H E TIME OF PAYMENT OF THE SUM, WHIC HEVER IS EARLIER. HOWEVER, THE DEDUCTION PRESCRIBED IS TOWARDS INCOME TAX ON INCOME C O MPRISED THEREIN. THERE IS NO IN CO ME COMPRISED IN THE ADVANCE PAYMENTS. INCOME COMPRISES IN THE RECEIPTS OF MONE Y AT THE T IME OF ADJUSTM E NT OF ADVANCES IN THE RA BI L LS. THEREFORE, THE LIABILITY TO DED UCT TAX DOES NOT ARISE AT THE TIME OF MAKING ADVANCES BUT ON L Y AT THE TIME OF A DJ U STMENT OF ADVANCES IN THE WOR KS CONTRACT PAYMENTS. IT IS THE SUBMI TTED THAT THOUGH TH E ADVANCES WER E MADE EARL I ER I.E. IN MAY 2010 AND JUNE 2010, THEY WERE ADJUSTED SUBSEQUENTLY AGAINST RA BILLS AS PER THE TABLE GIVEN IN PARA 9 OF THE WRITT EN SUBMISSIONS OF THE APPELLANT. . 6 . 2 . REGARDING THE SAID ISSUE , THE LD.CIT(A) HELD AS UNDER: 7.2 I HAVE CA REFULLY CON S IDERED THE SUBMISSIONS MADE BY THE AR. THE SUBMISSIONS OF THE AR THAT TDS PROVISIONS WILL BE APPLICABL E ONLY WHILE CREDITING THE AMOUNT / ADJ U S TMENT OF ADVANCES AGAINST RA BILLS AND NOT AT THE TIME OF CRED ITING ADVANCES TO THE CONTRACTOR IS MIS PLACED AND M ISCONCEIVED. THIS INTERPRETATION OF THE AR IS FARFETCHED AND IT IS AGAINST THE SPIRIT OF THE PROVISION S OF THE ACT. PROVISION S OF SECTION 194 C DO NOT MAKE ANY DISTINCTION AS TO WHETHER CREDITING OF THE ACC OUNT IS TOWARDS ADVANCES OR TOWARD S RA BILLS OR FI N AL SETTLEMENT OF THE BILLS. THE WORDING OF THE SECTION IS VERY CLEAR WHEREIN TA X HAS TO BE DEDUCTED AT THE TIME OF CREDITING OF THE SUM TO TH E ACCOUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT OF THE SUM , WHICHEVER IS EAR LI ER . 6.3. AGGRIEV ED WITH THE PARTI AL RELIEF GIVEN TO ASSESSEE ON DELETION OF INTEREST U/S. 201(1 A ) ON PAYMENT TO NUTPL , REVENUE HA S FILED AN APPEAL . ITA NO. 318 /HYD/2018: 2(A) LEARNED CIT(A) IS NOT JUSTIFIED IN UPHOLDING THE DEMAND OF RS. 5,00,00,000/ - U/S. 201(1) ALTHOU GH THE PAYE E, NAV AYUGA ENGINEERING LTD INCLUDED THE AMOUNT IN ITS RECEIPTS WHILE FILING ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2011 - 12 AND PAID TO TAX ON IT. M/S. KRISHNAPATNAM PORT COMPANY LTD., : - 7 - : (B) LEARNED CIT(A) HAS ERRED IN LAW IN NOT FOLLOWING THE JUDGEMENT OF SUPREME COURT IN THE CASE OF HINDUST AN COC A - COLA BEVERAGES LTD ( 29 3 ITR 226) AND THE BOARD CIRCULAR NO. 2 75/201/95 - IT(B) DATED 29 - 01 - 1997 REFERRED TO THEREIN. T HE JUDGEMENT IS APPLICABLE IR RESPECTIVE OF FILI NG OF FORM N O . 26A WHICH IS PRESCRIBED W.E.F. 01 - 07 - 2012 I .E., AFTER THE CURRENT ASS ESSMEN T YEAR . 7. WITH REGARD TO THE ABOVE, LD.CIT(A) HAS REJECTED THE PLEA OF THE ASSESSEE , BECAUSE T HE ASSESSEE HAS NOT FILED FORM NO. 26A AS PER PR OVISIONS TO SECTION 201(1) OF THE ACT SO THAT ASSESSING OFFICER COULD HAVE DETERMINED WHETHER T HE ASSESSEE IS IN DE FAULT OR NOT. B UT IN OUR CONSIDERED VIEW, NO DOUBT ASSESSEE HAS NOT FILED T HE FORM 26A BUT NOW ASSESSEE HAS BROUGHT EVIDENCE BEFORE THE ASSESSING OFFICER TO SUBSTANTIATE THAT THE PAYEE NECL HAS FILED THE RETURN OF INCOME AND PAID TH E DUE TAX . WE CANN OT FORGET THAT ASSESSEE IS COLLECTING TH E ABOVE TAX ON BEHALF OF GOVERNMENT AND THE DUTY ON THE ASSESSEE IS S TATU T O R ILY OB LIGAT ED UPON. W HEN ASSESSEE FAIL S TO COMPLY WITH THE PROVISIONS, THE LIABILITY IS ON THE ASSESSEE UNTIL THE DUE TAX IS COLLECTED OR PAID TO G OV ERNMENT. I N THIS C ASE, NO DOUBT ASSESSEE HAS NOT COMPLIED WITH THE PROVISIONS BUT GOV ERNMENT HAS COLLECTED THE DUE TAX FROM THE PAYEE ON THE DATE OF FILING THE RETURN OF INCOME AND PAYEE PAID THE DUE TAX BEFORE FILING THE RETURN O F INCO ME . T HEREFORE, FOLLOWIN G T HE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA - COLA BEVERAGES LTD ., (SUPRA), THE DEPARTMENT IS ALLOWED TO CLAIM INTEREST ON F AILURE IS UPTO THE DATE OF FILING THE RETURN OF INCOME . T HEREFORE, WE DIRE CT THE ASSESSING OFF ICER TO C ALCULATE THE INT EREST U/S. 201(1 A ) FROM THE DATE OF PAYMENT TO THE DATE OF FILING OF THE RETURN OF INCOME BY THE PAYEE . T HEREFORE, GROUND OF APPEAL FILED BY THE ASSESSEE IS ALLOWED. M/S. KRISHNAPATNAM PORT COMPANY LTD., : - 8 - : 3(A) LEARNED CIT(A) IS NOT JUSTIFIE D IN UPHO LDING THE INTEREST U /S. 201(1 A) ON RS. 10,00,000/ - THAT IS THE TAX DEDUCTIBLE U/S. 194C FROM PAYMENT OF RS. 5 CRORES. PAYEE FILED ITS RETURN AND IS LIAB LE TO PAY INTERE ST U/S. 234B W.E.F. 01 - 04 - 2011 ON THE ASSESSED TAX WHICH INCLUDES T HE TAX NOT DEDUCTED U/S. 1 94C. (B) INTE REST IS P AYABLE U/S. 201( 1A) UP TO 31 - 03 - 2011 IN THE FACTS AND CIRCUMSTANCES OF THE ASSESSEE HAVING ACCEPTED THE LIABILITY TO INTEREST U/S. 234B WHILE FILING ITS RETURN. ADD ITIONAL GROUNDS OF A P PEAL : 1 . LEARNED CIT(A) HAS ERRED IN S USTAIN ING THE ENTIRE INTEREST U/S. 201(1A) OF THE I.T. ACT, AMOUNTIN G TO RS. 1,22,98,760. 2. (A) LEARNED CIT(A) & A.O OVERLOOKED THE FACT THAT THERE IS DOUBLE TAXATION BY WAY OF INTEREST, ONCE U/S. 201(1A) FROM THE PAYER - ASSESSEE AND AGAIN U/S. 234C FROM N AVAYU GA ENGINEERING COMPANY LIMITED (N ECL). FURTHER, IN RESPECT OF PAYMENT OF RS. 5,00,00,000/ - , INTEREST U/S. 234B IS CHARGEABLE AND HAS BEEN CHARGED ON THE PAYEE, NECL. (B) AMOUNTS ALREADY CONSIDERED FOR COMPUTATION OF LIABILITY OF THE PAYEE (NECL) U/ S. 234 C, 234B , OUGHT TO HAVE BEEN E XCLUDED FOR PURPOSE OF CHARGE OF INTEREST U/S. 201(1A). 8. CONSIDER ED THE RIVAL SUBMISSIONS. A SSESSEE HAS SUBMI TTED THAT THE PAYEE HAS FILED RETURN OF INCOME AND PAID THE DUE TAX INCLUDING INTEREST U/S. 2 34B , ASSESSING O FFICER CANNOT CALCUL ATE INTEREST U/S. 201(1A). I N OUR VIE W, ASSESSEE FAILED TO UNDERSTAND THE MANDATE OF THE TWO SECTIONS I.E. , SEC. 201(1) IS THE OB LIGAT ION ON T HE COLLECTOR OF TAX AND SEC . 234B IS THE OBLIGATION ON THE TAX PAYE R ITSELF , WHO HAS TO PAY T HE DUE TAX ON TIME. T HERE IS SIGNIFICAN T DIFFERENCE IN STATUTORY OB LIGA TIONS POSTED ON THE COLLECTOR OF TAX AND STATUTOR Y OBLI GATION ON THE TAX PAYER. T HEREFORE, THESE TWO OBLIGATIONS AND THE MANDATE OF TWO SECTIONS ARE DIFFERENT AND CANNOT BE EQUAT ED . A CCOR D INGLY, GROUND S RAISED BY ASSESSEE ARE DISMISSED. M/S. KRISHNAPATNAM PORT COMPANY LTD., : - 9 - : REVENUE S APPEAL IN ITA NO. 275/HYD /2018 : 9. IN THIS APPEAL, REVENUE HAS RA I SED THE FOLLOWING G ROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) ER RED IN DELETING THE DEMAND RAISED U / S.201(1) & 201( 1 A) PERTAINING TO AMOUNT PAID OF RS.54,24,79,000 1 - TO MIS. NAVAYUGA ENGINEERING COMPANY LIMITED WITHOUT DEDUCTING TAX AT SOURC E FOR THE AY 2011 - 12. 2. WHETHER IN THE FACTS OF THE CASE, THE LEARNED CIT(AP PEAL) IS CORRECT IN TREATING THE AMOUNT OF RS.54,24,79,000 / - AS SHARE APPLICATION MO NEY WHICH WAS I N FACT THE PAYMENTS TOWARD EPC CONTRACTS PAID TO M / S. NAVAYUGA ENGINEERIN G COMPANY LIMITED. 3. WHETHER THE LEARNED CIT (A) ERRED IN FACT TO IGNORE TH AT THE ASSESSEE HAS DIRECTLY PAID FOR SHARE APPLICATION MONEY TO M / S. NAVAYUGA UDIPI TOLLW AY PRIVATE LIMI TED. 4. WHETHER THE LEARNED CIT (A) ERRED IN FACT TO ACCEPT THE PAY MENT OF SHARE APPLICATION MONEY THROUGH M / S. NAVAYUGA ENGINEERING COMPANY LIMITED ON BEH ALF OF THE ASSESSEE ON THE SAME DATE AND THROUGH JOURNAL ENTRY EVEN WHEN THE PAYMENT WAS MADE DIREC TLY TO M / S. NAVAYUGA UDIPI TOLLWAY PRIVATE LIMITED . 5. WHETHER THE LEARNED CIT(A) HAS ERRED IN FACT IN NOT APPRECIATING THAT IT IS A RELATED PARTY T RANSAC TION BEYOND THE HUMAN PROBABILITY. 6. WHETHER THE LEARNED CIT(A) HAS FAILED TO APP RECIATE, THE FA CT THAT NO CONFIRMATION FROM M / S. NAVAYUGA UDIPI TOLL WAY PRIVATE LIMITED WITH REGARD TO INVESTMENT ON BEHALF OF M / S. NAVAYUGA ENGINEERING COMPANY LIMI TED WA S FURNISHED BY THE ASSESSEE. 7. ANY OTHER GROUND WHICH THE APPELLANT MAY URGE EITH ER BEFORE OR AT THE TIME OF HEARING . 10. LD.DR SUBMITTED THAT WITH REFERENCE TO SECTION 201(1) ORDER THAT THERE IS MIS - MATCH OF FIGURES AND INFORMATION IN BALANCE SHEET OF ASSESSEE AND NECL , WHICH WAS SUBMITTED BEFORE THE ASSESSING OFFICER . H E SUBMITTED TH A T THE SHARES WERE ALLO TT ED SUBSEQUENTLY IN 2011 A ND THE INFORMATION SUBMITTED WERE ALL AFTER M/S. KRISHNAPATNAM PORT COMPANY LTD., : - 10 - : TH OUGH T TO COVER THE FAILURE ON THE PART OF ASSESSEE . H E SUBMITTED T HAT TH IS ISSUE MAY GO BACK TO ASSESSI NG OFFICER FOR FURTHER VERIFICA TION. 11. LD .AR HEAVILY RELIED ON THE FINDINGS OF LD.CIT(A) AND OPPOSED THE MATTER TO GO BACK TO ASSESSING OFFICER . 12. CO NSIDERED THE RIVAL SUB MISSIONS. WE NOTICE THAT ASSESSEE HAS FILE D EVI D ENCE TO SHOW THAT ASSESSEE WAS INTENDED TO MAKE PAYMENT TO NUTPL TOWARDS SHARE A PPLICATION MONEY BUT DUE TO WRONG ENTRY IN THE LEDGER, IT SH OW ED THAT IT HAS PAID TO NECL. I T FILED THE COPY OF LE TT ER SUBMITTED BEFORE THE ICICI BANK AND BANK STATEMENT . I T A LSO FILED THE BOARD RESOLUTION AND SUBSEQUENT ALLOTMENT OF SHARES ON 28 - 01 - 201 1. B ASED ON THAT , LD.CIT (A) HAS GRANTED RELIEF. 13. ON C AREFUL VERI F I C ATION OF BANK STATEM ENT OF NUTPL SUBMITTED BEFORE US, WE NOTICE THAT NUTPL RECEIVED RS. 54.25 CRORES ON 25 - 06 - 2010 BUT ON THE NEXT DAY, THE SAME FUNDS WERE TRANSFERRED TO NECL (REFER PG. 39 OF THE PAPER BOOK) . W HAT I S THE NECESSITY TO TRANSFER ON THE NEXT DAY, WHAT IS THE PURPOSE , IS IT PAID ON BEHALF OF ASSESSEE OR WHETHER THEY HAVE THEIR OWN CON TRACT. T HE BAL ANCE SHEET OF NECL AND NUTPL WERE NOT F I LED BEFORE US TO VERIFY THE FIGURES. S INCE THERE ARE DISCREPANCIES NOTED IN THE ENTRIES AND BANK TRANSACTI ONS, WE DEEM IT FIT AND PROPER TO REMIT THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER TO VERIFY THIS TRAN SACTIO N EXCLUSIVELY FROM THE LETTER ISSUED TO ICICI AND PAYMENT TO NUTPL AND SUBSEQUENT LY, SAME PAYMENT OF RS. 44.25 CRORES AND RS. 10 CRORES WERE MADE FROM NUTPL TO NECL O N THE NEXT DAY. M/S. KRISHNAPATNAM PORT COMPANY LTD., : - 11 - : A CCO RDINGL Y, GROUNDS RAISED BY REVENUE ARE ALLOWED FOR STATISTICAL PURPOS ES . 14. IN THE RESULT , THE APPEALS IN ITA NOS. 31 8 /HYD/2018 IS PARTLY ALLOWED & 27 5 /HYD/2018 IS T REATED AS ALLOWED FOR STATISTICAL PURPOSES. 15. AS FAR AS THE APPEALS RELATING TO S E CTION 2 7 1 C OF THE ACT ARE CONCERNE D , SINCE THE FACTS AND ISSUES AR E IDEN TICAL AND SAME , WE ARE REMITTING THESE APP EALS ALSO T O THE FILE OF ASSESSING OFFICER TO MODIFY THE ORDER , BASED ON THE FINDINGS GIVEN IN THIS ORDER S HEREIN ABOVE FOR ITA N OS . 318/HYD/ 2018 & 275/HYD/2018 . 16. IN THE RE SULT, THE APPEALS IN ITA NOS. 319/H YD/2018 & 276/HYD/2018 ARE T REATED AS ALLOWED FOR STATISTICAL PURPOSES . 17. TO SUM - UP , APPEAL IN ITA NO. 318/HYD/2018 IS PARTLY ALLOWED AND ALL THE REMAINING APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES . ORD ER P RONOUN CED IN THE OP EN C OUR T ON 12 TH AP RIL , 201 9 (P. MADHAVI D EVI) (S. R IFAUR RAHMAN) JUDICIAL MEMBER AC COUNTANT MEMBER H YDERA BAD, DAT ED 12 TH APRIL, 20 1 9 T NMM M/S. KRISHNAPATNAM PORT COMPANY LTD., : - 12 - : COPY TO : 1. M /S. KRI SHNAPATNAM PORT COMPA NY LIMITED, PLOT N O. 379, ROAD NO. 10, JUBILEE HILLS, HYDERABAD. 2 . ADDL. COMMISSIONER OF INCOME TAX (TDS) , TDS RANGE - 1 , HYDERABAD. 3. DY . COMMISSIONER OF INCOME TAX , TDS CI RCLE - 1 (1) , HYDERABAD. 4. A SS T . COMMISSIONER OF INC OME TA X (TDS) , TDS CIRCLE - 1 ( 1) , HYDERABAD. 5 . THE CIT ( APPEALS) - 8 , HYDERABAD 6. T HE CIT ( TDS), HYDERABAD 7 . D.R. ITAT, HYDERABAD 8 . GUARD FILE S.NO. DETAILS DATE 1 DRAFT DICTATED ON 1 8 - 0 3 - 1 9 2 DRAFT PLACED BEFORE AUTHOR 1 8 - 0 3 - 1 9 3 DRAFT PROPOSED & PLA CED BEFORE THE SE COND MEMBER 4 DRAFT DISCUSSED/APPROVED BY S ECO ND MEMBER 5 APPROV ED DRAFT COMES TO THE SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 7 FILE SENT TO BENCH CLERK 8 DATE ON W HICH THE FILE GOES TO HEAD CLERK 9 DA TE ON WHICH FILE GOES TO A .R. 10 DATE OF DISPA TCH OF ORDER