M/s. Jyoti Vinyl Ltd., New Delhi V. DCIT, New Delhi

ITA 3799/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8807 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 29-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Non-deduction of tax; TDS
• Section: 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.3799/DEL/2016 ASSESSMENT YEAR: 2012-13 JYOTI VINYL LTD., C/O ANIL JAIN DD & CO., CAS, 611, SURYA KIRAN BUILDING, 19-K.G. MARG, NEW DELHI. PAN: AAACJ2803M VS DCIT, CIRCLE-13(2), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL JAIN, CA REVENUE BY : SHRI J.K. MISHRA, CIT, DR DATE OF HEARING : 11.09.2019 DATE OF PRONOUNCEMENT : 16.09.2019 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 6 TH MAY, 2016 OF THE CIT(A)-5, NEW DELHI, RELATING TO ASSESS MENT YEAR 2012-13. 2. THE ASSESSEE IN ITS VARIOUS GROUNDS OF APPEAL HA S CHALLENGED THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS.3,69,505/- DISALLOWED BY THE ASSESSING OFFICER U/S 40(A)(IA) OF THE IT ACT ON ACCOUNT OF I NTEREST PAID TO RELIGARE FINVEST LTD. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF PVC FLEXIBLE HOSES & PROFILES A ND TRADING OF RESIN. IT FILED ITS ITA NO.3799/DEL/2016 2 RETURN OF INCOME ON 27 TH SEPTEMBER, 2012 DECLARING THE TOTAL INCOME OF RS.72,82,390.00. THE ASSESSING OFFICER COMPLETED T HE ASSESSMENT DETERMINING THE TOTAL INCOME AT RS.84,45,430/- WHEREIN, APART FROM OTHER ADDITIONS, THE ASSESSING OFFICER HAD MADE ADDITION OF RS.8,52,197/- U/S 40(A )(IA) ON ACCOUNT OF NON-DEDUCTION OF TAX FROM INTEREST PAID TO NON-BANKING FINANCIAL COMPANIES, NAMELY, RELIGARE FINVEST LTD. RS.3,69,505/-; AND TATA CAPITAL RS.4,82,69 2/-. THE EXPLANATION OF THE ASSESSEE THAT THE PAYMENT OF INTEREST AND PRINCIPAL WAS ALREADY PAID IN ADVANCE AT THE TIME OF SANCTIONING OF LOAN ITSELF, THEREFORE, DEDU CTION OF TDS WAS NOT PRACTICALLY POSSIBLE WAS REJECTED BY THE ASSESSING OFFICER. FU RTHER, THE SUBMISSION OF THE ASSESSEE THAT THE ABOVE TWO COMPANIES ARE REGULARLY ASSESSED TO INCOME-TAX AND ARE PAYING TAX ON THE INTEREST INCOME RECOVERED FROM TH E ASSESSEE COMPANY WAS ALSO NOT ACCEPTED BY THE ASSESSING OFFICER. IN APPEAL, THE LD.CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER. 3. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. THE LD. COUNSEL FOR THE ASSESSEE, REFERRING TO F IRST PROVISO TO SECTION 201(1), SUBMITTED THAT IF THE PAYEE HAS PAID THE TAX DUE ON THE INCOME DECLARED BY HIM IN HIS RETURN OF INCOME, THEN, THE ASSESSEE CANNOT BE TREA TED AS AN ASSESSEE IN DEFAULT. HE SUBMITTED THAT THE AUDITORS HAVE ALREADY CERTIFIED THAT THE PAYEES HAVE FURNISHED THEIR RETURNS OF INCOME FOR ASSESSMENT YEAR 2012-13 WHERE IN THEY HAVE DECLARED SUCH INTEREST INCOME AND PAID TAX DUE THEREON. HE HAS A CCORDINGLY SUBMITTED THAT HE HAS NO ITA NO.3799/DEL/2016 3 OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR THE LIMITED PURPOSE OF VERIFICATION OF THE SAME AND FOR PASSING APPROPRIATE ORDER AS PER LAW. 5. THE LD. DR, ON THE OTHER HAND, WHILE SUPPORTING THE ORDER OF THE CIT(A), SUBMITTED THAT HE HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION. 6. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THE ASSES SING OFFICER, INVOKING THE PROVISIONS OF SECTION 40(A)(IA), MADE ADDITION OF R S.8,52,197/- ON ACCOUNT OF NON- DEDUCTION OF TAX FROM PAYMENT OF INTEREST TO RELIGA RE FINVEST LTD. AND TATA CAPITAL. WE FIND, THE LD.CIT(A) SUSTAINED THE DISALLOWANCE S O MADE BY THE ASSESSING OFFICER. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASS ESSEE THAT SINCE BOTH THE PAYEES HAVE DECLARED SUCH INTEREST INCOME IN THEIR RETURN OF IN COME AND PAID TAX THEREON, THEREFORE, IN VIEW OF THE FIRST PROVISO TO SECTION 201(1), THE ASSESSEE CANNOT BE TREATED AS AN ASSESSEE IN DEFAULT AND, CONSEQUENTLY, NO DISALLO WANCE U/S 40(A)(IA) IS CALLED FOR. 7. CONSIDERING THE TOTALITY OF THE FACTS OF THE CAS E AND CONSIDERING THE FACT THAT THE ASSESSEE HAS FILED A CERTIFICATE FROM THE ACCOUNTAN T CERTIFYING THAT BOTH THE PAYEES HAVE DECLARED SUCH INTEREST INCOME IN THEIR RETURN OF INCOME AND PAID TAXES THEREON, THEREFORE, WE DEEM IT PROPER TO RESTORE THE ISSUE T O THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO VERIFY THE VERACITY OF THE CLAI M OF THE ASSESSEE AND PASS APPROPRIATE ORDER AS PER LAW. WE HOLD AND DIRECT ACCORDINGLY. T HE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.3799/DEL/2016 4 8. IN THE RESULT, THE APPEAL FILED BY THE ASS ESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 6.09.2019. SD/- SD/- (KULDIP SINGH) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 16 TH SEPTEMBER, 2019 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI