Appeal details
Counselvise Citation
[2015] 140 COUNSELVISE.COM (IT) 99622 (ITAT-JODHPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 month(s) 5 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
04-09-2015
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
SMC
Next Hearing Date
01-09-2015
Assessment Year
2009-2010
Appeal Filed On
29-06-2015
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI G.C. GUPTA, H O NBLE VICE PRESIDENT SHRI R.C. SHARMA , HONBLE ACCOUNTANT MEMBER ITA NO. 370 / JODH / 20 1 5 [A.Y. 200 9 - 1 0] A. C.I.T VS. M/S M/S KRISHAN LAL MEEL & P ARTY CIRCLE 2 G.P. HO UDAIPUR UDAIPUR BHUPALPURA, UDAIPUR PAN : AAAAK 7971 K ITA NO. 401 / JODH /201 5 [A.Y. 200 9 - 1 0] M/S M/S KRISHAN LAL MEEL & PARTY VS. DY. C.I.T ALWAR GROUP, HO UDAIPUR CIRCLE - 2 319, BHUPALPURA, UDAIPUR UDAI PUR PAN : AAAAK7971 K ITA NO. 379 / JODH /201 5 [A.Y. 200 9 - 1 0] A. C.I.T VS. M/S HANUMAN SINGH HITENDRA TANK CIRCLE 2 RITESH SUHALKA & PARTY UDAIPUR UDAIPUR GROUP, HO UDAIPUR 20, SAHELI NAGAR, UDAIPUR PAN : AAAA H2811 F 2 ITA NO. 40 0 / JODH /201 5 [A.Y. 200 9 - 1 0] M/S HANUMAN SINGH HITENDRA TANK VS. DY. C.I.T RITESH SUHALKA & PARTY CIRCLE 2 UDAIPUR GROUP, HO UDAIPUR UDAIPUR 20, SAHELI NAGAR, UDAIPUR PAN : AAAA H2811 F ITA NO. 380 / JODH /201 5 [A.Y. 2007 - 08] DY. C.I.T VS. P RABHU LAL KAILASH CHAND & PARTY CIRCLE 2 RAJSAMAND GROUP, HO - UDAIPUR UDAIPUR 302, VARDHMAN COMPLEX, BHUPALPURA UDAIPUR PAN : AAAA P7637 F ITA NO. 399 / JODH /201 5 [A.Y. 200 9 - 1 0] PRABHU LAL KAILASH CHAND & PARTY VS. DY. C.I. T RAJSAMAND GROUP, HO - UDAIPUR CIRCLE - 2 302, VARDHMAN COMPLEX, BHUPALPURA UDAIPUR UDAIPUR PAN : AAAA P7637 F ITA NO. 388 / JODH /201 5 [A.Y. 2007 - 08] A. C.I.T VS. M/S OM PRAKASH MAHESH KUMAR & PARTY CIRCLE 2 SIROHI JALORE GROUP HO U DAIPUR UDAIPUR 401 UJJAWAL APARTMENT, PLOT NO 4, BHATT JI KI BARI, UDAIPUR PAN : AAAAO1179P 3 ITA NO. 398 / JODH /201 5 [A.Y. 200 9 - 1 0] M/S OM PRAKASH MAHESH KUMAR & PARTY VS. A. C.I.T SIROHI JALORE GROUP HO UDAIPUR CIRCLE 2 401 UJJAWAL APARTMENT, P LOT NO 4, UDAIPUR BHATT JI KI BARI, UDAIPUR PAN : AAAAO1179P (APPELLANT) (RESPONDENT) A SSESSEE B Y : SHRI P.C. PORWAL SHRI GAUTAM MUTHA DEPARTMENT B Y : SHRI S.L. MOURYA DATE OF H EARING : 0 1 . 0 9 .201 5 DATE OF PRONOUNCEMENT : 04 . 0 9 . 201 5 ORDER PER BENCH : - TH ESE ARE A BUNCH OF APPEAL S AND CROSS APPEALS BY THE ASSESSEE AND THE REVENUE FILED AGAINST THE ORDER OF THE CIT(A ) - I , UDAI PUR DATED 30 .0 4 .201 5 ALL PERTAINING TO A.Y. 200 9 - 1 0 IN THE MATTER OF ORDER PASSED U/S 147/ 143 ( 3 ) O F THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT, FOR SHORT]. 2 . RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. COMMON GROUNDS HAVE BEEN TAKEN IN ALL THE APPEALS OF DIFFERENT ASSESSEES UNDER 4 CONSIDERATION. FACTS AND CIRCUMSTANCES IN ALL THE CASES ARE SAME AND SINCE THE ISSUES INVOLVED ARE COMMON, WE ARE ADJUDICATING UPON THEM BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. FACTS OF THE CASE, IN BRIEF, ARE THA T T HE ASSESSEE - AOP IS A LIQUOR CONTRACTOR DEAL ING IN TRADING OF COUNTRY LIQUOR, IMFL & BEER IN THE R AJSAMAND REGION (HO - UDAIPUR) FOR THE FINANCIAL YEAR 2008 - 2009 (A.Y. 2009 - 2010). THE CONTRACT OF SELLING THE LIQUOR IS EXCLUSIVE SOLE SELLING RIGHT AWARDED TO CONTRACTORS ON THE BASIS OF BIDDING THE PRI CE FOR DIFFERENT PLACES. THE LIQUOR CONTRACT IS AWARDED TO THE ASSESSEE AOP FOR THE REGION AGREED UNDER CONTRACT I.E. R AJSAMAND REGION. THAT THE AOP HAD BEEN CONSTITUTED MUCH BEFORE THE AWARD OF CONTRACT TO THE AOP BY THE MEMBERS INTERESTED TO DO THE LIQUO R BUSINESS AGREED BY AND BETWEEN THEM. IT IS ALSO PERTINENT TO STATE HERE THAT AT THE TIME OF FORMATION/CONSTITUTION OF THE AOP, IT WAS MUTUALLY DECIDED BY & BETWEEN THE MEMBERS OF THE AOP THAT THE ALL SHOPS AWARDED IN THE NAME OF MEMBERS SHALL BE TREATED AS THE SHOPS OF THE AOP. FURTHER, ALL THE INCOME/REVENUE & EXPENDITURE WITH RELATES TO THESE SHOPS SHALL ALSO BE TREATED AS INCOME/REVENUE & EXPENDITURE OF THE AOP. ACCORDING TO THE TERMS AND CONDITIONS OF THE AOP AGREEMENT, 5 THE AOP SO CONSTITUTE HAS FILED APPLICATIONS IN THE NAME OF ITS MEMBERS FOR DIFFERENT - DIFFERENT SHOPS FOR OBTAINING THE CONTRACT AND PAID TENDER APPLICATION FEE, SECURITY DEPOSITS & OTHER RELEVANT PAYMENTS ETC. ON BEHALF OF ITS MEMBERS. AND IF THE CONTRACT WAS AWARDED TO THE INDIVIDUAL THEN THE SHOP WAS MERGED IN THE BUSINESS OF AOP. THE INCOME SOURCE OF THE ASSESSEE AOP IS FROM SALE PROCEEDS OF COUNTRY LIQUOR, IMFL & BEER OF THE INDIVIDUAL SHOPS AWARDED IN THE NAME OF ITS AOP MEMBERS. ACCORDING TO THE TERMS & CONDITIONS OF THE AOP, ALL THE PURCHASES, SALES & EXPENSES IN RESPECT OF INDIVIDUALS SHOPS AWARDED IN THE NAME OF BELOW MEMBERS OF THE AOP ARE TAKEN IN THIS MAIN AOP AND ACCORDINGLY CREDIT OF THESE TCS/TDS CERTIFICATES IN RESPECT OF THIS SHOPS HAS TAKEN BY THE MAIN AOP IN ITS INCO ME TAX RETURN. THUS, IN THE ASSESSEES CASE, THE SALE PROCEEDS AS WELL AS PURCHASES, TCS THEREOF & OTHER EXPENSES OF THE INDIVIDUAL SHOPS AWARDED IN THE NAME OF AOP MEMBERS WERE RECORDED COLLECTIVELY IN THE REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEE AOP MAI NTAINED AT ITS HEAD OFFICE SITUATED AT UDAIPUR AND ALL THE BUSINESS TRANSACTIONS IN THIS REGARD WAS CONTROL & MANAGED BY THE AOP FROM ITS HEAD OFFICE. THE AOP MADE ALL THE PAYMENTS OF PURCHASES & EXPENSES IN RESPECT OF THE INDIVIDUAL SHOPS ALLOTTED IN THE NAME OF AOP MEMBERS AS WELL AS 6 THE TCS OF THESE SHOPS HAS ALSO TAKEN BY THE AOP IN ITS IT RETURN FOR THE RELEVANT FINANCIAL YEAR. HENCE, THE BUSINESS ACTIVITIES IN RESPECT OF THE SHOPS ALLOTTED IN THE INDIVIDUAL NAMES OF THE MEMBERS OF THE AOP WERE COLLECT IVELY TREATED AS THE BUSINESS ACTIVITIES OF THE AOP. 4. AFTER THE ASSESSMENT WAS COMPLETED U/S 143(3), T HE ASSESSEE - AOPS CASE WAS REOPENED U /S 148 OF THE ACT DATED 25 - 03 - 2014 ON THE BASIS OF AUDIT OBJECTION RAISED BY THE AG AUDIT PARTY. IN C OMPLIANCE TO THE NOTICE ISSUED U /S 148 OF THE ACT, THE ASSESSEE - AO P FILED A LETTER DATED 21 - 04 - 2014 W ITH A REQUEST TO TREAT THE ORIGINAL RETURN FILED U /S 139 OF THE IT ACT, 1961 AS A RETURN F ILED IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. ACCORDINGLY, THE DCIT COMPL ETE D THE REASSESSMENT PROCEEDINGS U /S 148 OF THE ACT AND DISALLOWED THE CREDIT OF TCS CERTIFICATE IN RESPECT OF PURCHASES MADE IN THE NAME OF MEMBERS OF THE AOP, HOWEVER, ASSE SSED THE INCOME OF THE ASSESSEE - AOP AS IT IS AT RS. 14,35,550/ - AGAINST THE AS SESSED INCOME OF RS. 14,35,550/ - A SSESSED IN THE ORIGINAL RETURN AND ASS ESSED U /S 143(3) OF THE ACT . THE ASSESSEE REQUESTED TO PROVIDE THE REASON S RECORDED FOR REOPENING OF ASSESSMENT PROCEEDINGS, WHIC H WERE PROVIDED TO THE ASSESSEE AOP AS UNDER: 7 'BRIEF F ACTS OF THE CASES ARE THAT THE ASSESSMENT U/S 143(3) IN THIS CASE OF COMPLETED ON 28 - 03 - 2011 ON TOTAL INCOME OF RS. 14,35,550.00/ - . ACCORDING TO THE PROVISIONS OF THE IT ACT CREDIT OF TCS/TDS COLLECTED/DEDUCTED SHALL BE GIVEN TO THE PERSON FROM WHOM THE TA X HAS BEEN COLLECTED/DEDUCTED. BUT ON PERUSAL OF ASSESSMENT RECORDS FOR THE YEAR UNDER CONSIDERATION IT HAS BEEN OBSERVED THAT ASSESSEE WAS ALLOWED EXCESS CREDIT OF TCS/TDS AMOUNTING TO RS. 26,68,331/ - . HENCE, SAME IS REQUIRED TO BE DISALLOWED. 5. IN THE REASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE CREDIT OF TCS CERTIFICATES IN THE NAME OF INDIVIDUAL MEMBERS WAS NOT ALLOWABLE AND WHEREVER THE CREDIT OF TCS WHICH THE ASSESSEE - AOP HAS CLAIMED IS NOT REFLECTED PERTAINING TO THE PAN OF THE ASSESSEE - AOP, THE TCS CREDIT SHOULD NOT BE GIVEN TO ASSESSEE - AOP . AGAINST THE ABOVE ORDER OF THE AO, THE ASSESSEE APPROACHED THE LD. CIT(A) AND RAISED THE GROUND WITH REGARD TO VALIDITY OF REOPENING U/S 147 OF THE ACT AS WELL AS ON MERITS OF THE ADDITION/DISALLOWANCE MADE WITH RESPECT TO TCS /TDS . 6. BY THE IMPUGNED ORDER, THE LD. CIT(A) UPHELD THE REOPENING U/S 147 OF THE ACT BY OBSERVING THAT THE AO HAD REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT. HOWEVER, ON MERITS, THE LD. CIT(A) ALLOWED ASSESSEES APPEAL AFTER OBSERVING AS UNDER: 8 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AS WELL AS THE FINDINGS OF THE LD. AO. KEEPING INTO CONSIDERATION THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE VARIOUS JUDICIAL PRONOUNCEMENTS AND TH E PROVISIONS OF THE ACT AND IT RULES, 1962 RELIED ON AND SUBMITTED AS ABOVE BY THE APPELLANT IN THIS RESPECT I AM OF THE OPINION THAT FOR THE SAKE OF SUBSTANTIVE JUSTICE AND FAIRNESS IT WILL BE JUSTIFIED THAT THE CREDIT OF TCS/TDS CERTIFICATES ISSUED IN TH E NAME OF INDIVIDUAL MEMBERS SHOULD BE ALLOWED IN THE HANDS OF THE AOP WHERE THE INCOME FROM LIQUOR BUSINESS HAS BEEN ASSESSED. ACCORDINGLY, THE LD. AO IS DIRECTED TO ALLOW THE CREDIT OF TCS/TDS CERTIFICATES ISSUED IN THE NAME OF INDIVIDUAL MEMBERS IN THE HANDS OF THE AOP AFTER DUE VERIFICATION AND SATISFACTION ACCORDING TO THE RISK MANAGEMENT STRATEGY. HENCE, THIS GROUND OF APPEAL IS ALLOWED . 7. AGAINST THE ABOVE ORDER OF THE LD. CIT(A), THE REVENUE HAS APPROACHED US AGAINST THE LD. CIT(A)S DIRECTION TO ALLOW TCS/TDS IN THE HANDS OF THE ASSESSEE - AOP. HOWEVER, THE ASSESSEE HAS FILED CROSS APPEAL CONTENDING THAT THERE WAS NO ESCAPEMENT OF INCOME. THEREFORE, REOPENING ITSELF WAS INVALID. 8. WE HAVE CONSIDER ED THE RIVAL SUBMISSIONS , GONE THROUGH THE ORDER S OF THE AUTHORITIES BELOW AND CAREFULLY PERUS ED ENTIRE MATERIAL PLACED ON RECORD . IN SO FAR AS THE MERITS OF CASE IS 9 CONCERN ED, THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT VS. BHOORATNAM & COM PANY REPORTED AT [2013] 262 CTR 0405 [AP] WHEREIN THE HON'BLE HIGH COURT HAS HELD AS UNDER: WHERE INCOME SHOWN IN THE TDS CERTIFICATE WAS OFFERED TO TAX BY THE ASSESSEE THEN TDS CREDIT IS ALLOWABLE ON THE BASIS OF TDS MENTIONED IN THE TDS CERTIFICATES IR RESPECTIVE OF THE FACT THAT TDS CERTIFICATE WAS NOT IN ASSESSEES NAME. 9. THE FACTS AND CIRCUMSTANCES IN THE INSTANT CASES ARE EXACTLY IDENTICAL. FURTHERMORE, THE FINDINGS RECORDED BY THE LD. CIT(A) TO THE EFFECT THAT THE MEMBER S OF AOP HAS NOT CLAIMED ANY TDS/TCS IN THEIR INDIVIDUAL RETURNS, THEREFORE, THE ASSESSEE - AOP IS ENTITLED FOR CREDIT OF TCS/TDS IN RESPECT OF INCOME EARNED BY THE AOP. THE FINDINGS RECORDED BY THE LD. CIT(A) HAS NOT BEEN CONTROVERTED BY THE LD. D.R. BY BRINGING ANY COGENT MATERI AL ON RECORD. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE CONCLUSION ARRIVED AT BY THE LD. CIT(A) IN DIRECTING THE AO TO ALLOW CREDIT OF TCS/TDS ISSUED IN 10 THE NAME OF INDIVIDUAL MEMBERS IN THE HANDS OF THE ASSESSEE - AOP AFTER DUE VERIFICAT ION AND SATISFACTION. FACTS AND CIRCUMSTANCES BEING PARI MATERIA SIMILAR IN ALL THE CASES OF ALL THE ASSESSEES, FOLLOWING THE REASONS GIVEN HEREINABOVE, WE DISMISS ALL THE APPEALS OF THE REVENUE. 10. NOW COMING TO THE APPEALS OF THE ASSESSEE WHEREIN REASS ESSMENT HAS BEEN CHALLENGED ON THE GROUND THAT THERE WAS NO ESCAPEMENT OF INCOME. FROM THE PLAIN READING OF THE SECTION 147 OF THE IT ACT, 1961, IT IS CLEAR THAT PROVISIONS OF SECTION 147 APPLICABLE WHEREIN ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSME NT NOT THE EXCESS CREDIT OF TAX OR TCS/TDS. THE ASSESSEE CASE WAS REOPENED FOR THE REASON THAT THE INCOME OF THE APPELLANT TO THE EXTENT OF RS. 2668331.00 ON ACCOUNT OF EXCESS CREDIT OF TCS/TDS ALLOWED TO THE ASSESSEE AOP HAS ESCAPED THE ASSESSMENT IN TE RMS OF SECTION 147 OF THE IT ACT, 1961, WHICH WAS NOT COME WITHIN THE PURVIEW OF SECTION 147 OF THE IT ACT, 1961, AS THE EXCESS CREDIT OF TCS/TDS IS NOT THE PART OF INCOME OF THE ASSESSEE. HENCE, THE ESSENTIAL PRE CONDITION OF SECTION 147 OF THE IT ACT, 19 61 HAS NOT BEEN FULFILLED IN THE ASSESSEES CASE. 11 11. IT IS CLEAR FROM THE FACTS ON RECORD THAT THERE IS NO VARIATION IN THE INCOME EVEN AFTER PASSING OF ORDER U/S 143/147 OF THE ACT. SINCE THERE IS NO ESCAPEMENT OF INCOME WHICH HAS BEEN BROUGHT WITHIN T HE TAX NET AFTER REOPENING, THERE IS NO JUSTIFICATION FOR REOPENING OF ASSESSMENT. 12 . IN THE RESULT, ALL THE APPEAL S OF THE ASSESSEE ARE ALLOWED. 13. TO SUM UP, ALL THE APPEALS OF THE REVENUE ARE DISMISSED WHEREAS ALL THE APPEALS OF THE ASSESSEE ARE AL LOWED. ORDER PRON OUNCED IN THE COURT ON 04 - 0 9 - 201 5 . SD/ - SD/ - (G.C. GUPTA) ( R.C. SHARMA ) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 04 TH SEPTEMBER , 2015 . VL/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) BY O RDER 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR
