DCIT, Circle- 11(1), New Delhi V. Hero Motocrop Ltd., New Delhi

ITA 3291/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3822 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 07-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGAINST DATED PASSED
• Keywords: TDS; Set aside
• Section: 14A; 40(a)(ia); 144C; 40a(ia)

Judgement Text

1 ITA NO. 3291/DEL/2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL ME MBER AND SH. PRASHANT MAHARISHI, ACCOUN TANT MEMBER I.T.A. NO. 3291/DEL/20 18 (A.Y 2008-09) (THROUGH VIDEO CON FERENCING) DCIT CIRCLE-11(1) NEW DELHI (APPELLANT) VS HERO MOTOCROP LTD. 34, BASANT LOK, VASANT VIHAR, NEW DELHI 110034 AAACH0812J (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER DATED 01/02/2018 PASSED BY CIT (A)-42, NEW DELHI FOR ASSESSMENT YEAR 2008-09. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING RELIEF OF RS. 38.57 CRORES O N EXPENDITURE WHICH HAS NEITHER BEEN ASCERTAINED OR CRYSTALLIZED DURING THE YEAR AND NOR WAS THE TDS DEDUCED DURING THE YEAR. 3. THE ASSESSEE IS A PUBLIC LIMITED COMPANY AND IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE OF TWO WHEELERS SINCE 1984. THE ASSESSEE FILED RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR ON 26/09/2008 APPELLANT BY SH. ROHIT JAIN, ADV RESPONDENT BY MS. MANISHA SHARMA, ADV DATE OF HEARING 05.10.2021 DATE OF PRONOUNCEMENT 11.10.2021 2 ITA NO. 3291/DEL/2018 DECLARING TOTAL INCOME OF RS. 1307,37,84,038/- UNDE R THE NORMAL PROVISIONS OF INCOME TAX ACT, 1961. THE DRAFT ASSESSMENT ORDER U /S 144C OF THE ACT WAS PASSED ON 13/6/2012 AT TOTAL INCOME OF RS. 4595,86, 49,565/- AFTER PROPOSING VARIOUS ADDITIONS/DISALLOWANCES. AGAINST THE SAID DRAFT ASSESSMENT ORDER, THE ASSESSEE FILED OBJECTIONS BEFORE THE DRP WHICH WERE DISPOSED OFF BY THE DRP VIDE ORDER DATED 28/3/2013 IN ACCORDANCE WITH THE D IRECTIONS GIVEN BY THE DRP, THE FINAL ASSESSMENT ORDER WAS PASSED U/S 143( 3) READ WITH SECTION 144C OF THE ACT ON 30/05/2013. DETERMINING THE TOTAL IN COME AT RS. 4585,87,70,541/- AFTER MAKING ADDITIONS/DISALLOWANC ES AMOUNTING TO RS.3355,12,31,399/- (BEFORE DEDUCTING 2007-08 ADJUS TMENT RS.76.62 CRORES) TO THE RETURNING AMOUNT. AGAINST THE FINAL ASSESSM ENT ORDER, THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL WHICH WAS DISPOSED OFF V IDE ORDER DATED 13/6/2014 WHEREIN THE MAJORITY OF THE AFORESAID ADDITIONS/DIS ALLOWANCES TO BE EXTENT OF RS. 3279.25 CRORES WERE DELETED BY THE TRIBUNAL. F URTHER, ADDITIONS/DISALLOWANCES TO RS.68.60 CRORES WERE SET ASIDE BY THE TRIBUNAL TO THE FIEL OF THE ASSESSING OFFICER FOR RECONSIDERIN G THE MATTER IN LIGHT OF THE OBSERVATIONS FINDING GIVEN IN THE APPELLATE ORDER P ASSED BY THE TRIBUNAL. THE REMAINING ADDITIONS/DISALLOWANCES OF RS. 7.28 CRORE S WERE CONFIRMED BY THE TRIBUNAL. THE ASSESSEE FILED APPEAL BEFORE THE HO N'BLE HIGH COURT WHICH IS PENDING. THE ASSESSING OFFICER COMPLETED THE ASSES SMENT VIDE ORDER DATED 26/2/2015 PASSED U/S 254/143(3) THEREBY MAKING ADDI TIONS/DISALLOWANCES OF RS. 38.57 CRORES TOWARDS DISALLOWANCES OF EXPENDITU RE INCURRED ON ACCOUNT OF PROVISIONS FOR ADVERTISEMENT EXPENSES U/S 40A(IA) A ND DISALLOWANCES U/S 14A TOWARDS RS. 123.39 LAKHS. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER U/S 254/ 143(3), THE ASSESSEE FILED BEFORE THE CIT(A). THE ASSESSEE CIT(A) PARTL Y ALLOWED THE APPEAL OF THE ASSESSEE. 4. THE LD. DR SUBMITTED THAT THE CIT(A) ERRED IN AL LOWING RELIEF OF RS. 38.57 CRORES ON EXPENDITURE WHICH HAS NEITHER BEEN ASCERT AIN OR CRYSTILLSED DURING 3 ITA NO. 3291/DEL/2018 THE YEAR AND NOR WAS THE TDS DEDUCTED DURING THE YE AR. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 5. THE LD. AR RELIED UPON THE ORDER OF THE CIT(A). 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIALS AVAILABLE ON RECORD. THE CIT(A) HAS GIVEN A CLEAR CUT FINDING IN PARA 5.6 AND 5.7 WHEREIN IT IS CATEGORICALLY MENTIONED THAT THE ASSESSING OFFICER NEVER DISPUTED THE FACT OF DEPOSIT OF TAX DEDUCTED AT SOU RCE BEFORE THE DUE DATE OF FILING THE INCOME TAX RETURN FOR THE SUBJECT YEAR. THEREFORE, THE CIT(A) RIGHTLY HELD THAT ONCE THE ASSESSING OFFICER WAS DIRECTED T O VERIFY THE AMOUNT ON WHICH TAX HAS BEEN PAID BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME AND ALLOW THE SAME IN THE FIRST ROUND OF APPEAL BEFORE THE TR IBUNAL. THUS, THE ASSESSING OFFICER WAS NOT RIGHT IN DISALLOWING THE DEDUCTION UNDER SECTION 40(A)(IA) OF THE ACT FOR FAILURE TO DEDUCT AND DEPOSIT THE TAX AT SO URCE. HENCE, THERE IS NO NEED TO INTERFERE WITH THE FINDING OF THE CIT(A). HENCE , APPEAL OF THE REVENUE IS DISMISSED. 5. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 11 TH DAY OF OCTOBER, 2021 SD/- SD/- (PRASHANT MAHARISHI) (SUCH ITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11/10/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR 4 ITA NO. 3291/DEL/2018 ITAT NEW DELHI