The ACIT,TDS Circle, Surat V. M/s. D.P.Vekaria, Surat

ITA 38/AHD/2011

• Counselvise Citation: 3820514 RSA 2011
• Duration Of Justice: 2 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 03-10-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 06-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BENCH, AHMEDABAD . , !' # $ $ $ $ % &', # BEFORE SHRI A.MOHAN ALANKAMONY,ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER APPEAL(S)/CO(S) BY APPELLANT VS. RESPONDENT SL. NO(S) ITA NO(S) / CO(NOS) ASSESSMENT YEAR(S) APPELLANT (S) RESPONDENT(S) 1. 38/AHD/2011 2008-09 THE ACIT TDS CIRCLE SURAT (REVENUE) M/S.D.P.VEKARIA, D-302, SAARTHI COMPLEX VARACHA ROAD, HIRABAG CIRCLE,SURAT (ASSESSEE) PAN: SRTD 00109E 2. 39/AHD/2011 2009-10 REVENUE ASSESSEE 3. 40/AHD/2011 2010-11 REVENUE ASSESSEE 4. CO NO.45/AHD/2011 (IN ITA 38/AHD/2011) 2008-09 ASSESSEE REVENUE 5. CO NO.46/AHD/2011 (IN ITA 39 /AHD/2011) 2009-10 ASSESSEE REVENUE REVENUE BY : SHRI K.C. MATHEWS, SR.DR ASSESSEE BY : SHRI R.N.VEPARI, A.R. %$( ) '' / / / / DATE OF HEARING : 03/10/2013 +, ) '' / DATE OF PRONOUNCEMENT : 25/10/2013 !- / O R D E R PER BENCH : THESE THREE APPEALS BY THE REVENUE ARE DIRECTED AG AINST THE SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME TA X(APPEALS)-I, SURAT (CIT(A) FOR SHORT) ALL DATED 30/09/2010 PERTAINI NG TO ASSESSMENT YEARS (AYS) 2008-09, 2009-10 & 2010-11 AND THE ASSE SSEE IS IN CROSS- OBJECTIONS FOR AYS 2008-09 & 2009-10. SINCE COMMON ISSUES/GROUNDS ARE INVOLVED, THESE APPEALS AND CROSS-OBJECTIONS WERE H EARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER FOR T HE SAKE OF CONVENIENCE. ITA NOS.38,39 & 40/AHD/2011(BY REVENUE) AND CO NOS.45 & 46/AHD/2011(BY ASSESSEE) ( IN ITA NOS.38 & 39/AHD/2011 ) AYS 2008-09,2009-10 & 2010-11( RESPECTIVELY ) - 2 - 2. FIRST, WE TAKE UP THE REVENUES APPEAL IN ITA NO .38/AHD/2011. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWING COMMON GROUNDS:- 1. THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS FACTS OF THE CASE IN DELETING THE ORDER PASSED U/S.201(1) & INTEREST CHA RGED U/S.201(1A) OF THE IT ACT OF RS.8,75,470/- AND RS.2,04,071/- FO R AY 2008-09 BY THE A.O. 2. THE LD.CIT(A) ERRED IN LAW AS WELL AS ON FACTS IN T REATING THE JCB CHARGES AS CONTRACTUAL PAYMENTS INSTEAD OF RENT U/S .194-I OF THE ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. 5. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.C IT(A) MAY BE CANCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EFFECT. 2.1. GROUND NOS.1 & 2 ARE INTER-CONNECTED, THEREFOR E THE SAME ARE BEING DISPOSED OF TOGETHER. GROUND NOS.3,4 TO 5 ARE GENE RAL IN NATURE WHICH REQUIRE NO INDEPENDENT ADJUDICATION. 2. BRIEFLY STATED FACTS ARE THAT A SURVEY U/S.133A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) W AS CONDUCTED AT THE OFFICE PREMISE OF THE ASSESSEE ON 21/07/2009. DUR ING THE COURSE OF SURVEY, IT WAS NOTICED THAT THE ASSESSEE HAS NOT DE DUCTED TDS ON THE INTEREST PAID TO TML FINANCE LTD. ON LOAN TAKEN FOR THE PURCHASE OF EARTH MOVING MACHINE. SIMILARLY, IT WAS ALSO NOTICED BY THE AO THAT THE ASSESSEE HAD DEDUCTED TDS U/S.194-C OF THE ACT ON T HE PAYMENT MADE TO HIRER OF JCB MACHINE UTILIZED FOR EARTH DIGGING PUR POSE. AS PER AO, THESE PAYMENTS AMOUNTS TO RENT PAYMENT ON WHICH TDS SHOULD HAVE BEEN DEDUCTED AS PER PROVISIONS OF SECTION 194-I OF THE ACT. DURING THE PROCEEDINGS BEFORE THE AO, THE ASSESSEE MADE VARIOU S SUBMISSIONS BUT ITA NOS.38,39 & 40/AHD/2011(BY REVENUE) AND CO NOS.45 & 46/AHD/2011(BY ASSESSEE) ( IN ITA NOS.38 & 39/AHD/2011 ) AYS 2008-09,2009-10 & 2010-11( RESPECTIVELY ) - 3 - WERE REJECTED BY THE AO AND THE AO PASSED ORDER U/S .201(1) & 201(1A) FOR NON-DEDUCTION OF TDS ON INTEREST AND ALSO ON SH ORT DEDUCTION OF TDS, I.E. MISAPPLICATION OF PROVISIONS ON JCB CHARG ES PAYMENT. AGAINST THIS, ASSESSEE WENT IN APPEAL BEFORE THE LD .CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, PARTLY ALLOWED THE APP EAL. AGAINST THIS ORDER, REVENUE IS IN APPEAL(S) BEFORE US. 3. THE LD.SR.DR OF THE REVENUE SHRI K.C. MATHEWS VE HEMENTLY ARGUED THAT THE LD.CIT(A) ERRED ION NOT APPRECIATIN G THE FACTS IN RIGHT PERSPECTIVE. HE STRONGLY SUPPORTED THE ORDER OF TH E AO. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE SHRI R.N.VEPA RI SUBMITTED THAT THE AO WAS NOT JUSTIFIED IN TREATING THE ASSESSEE IN DE FAULT. HE SUBMITTED THAT SO FAR PAYMENTS MADE TO JCB ARE CONCERNED, TH EY ARE RIGHTLY HELD TO BE THE CONTRACTUAL PAYMENT, THEREFORE SECTION 194- C WOULD APPLY AND THE TAX WAS DEDUCTED AS PER THAT PROVISIONS. HE FURTHE R SUBMITTED THAT IN RESPECT OF THE INTEREST EXPENDITURE, THE EXPENDITUR E TO THE EXTENT OF INTEREST CAN ONLY BE DISALLOWED AND NOT THE PRINCIP AL AMOUNT. HE FURTHER SUBMITTED THAT EVEN OTHERWISE ALSO, THE LIABILITY C ANNOT BE FASTENED ON THE ASSESSEE IN VIEW OF THE FACT THAT M/S.TML FINANCIAL SERVICES LTD. HAS PAID THE TAX ON THE INTEREST AMOUNT AND PLACED RELI ANCE ON THE DECISION OF HONBLE APEX COURT RENDERED IN THE CASE OF HINDUSTA N COCA-COLA BEVERAGE (P)LTD. VS. CIT REPORTED AT (2007) 293 ITR 226 (SC). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT THAT ALL THE PARTIES ITA NOS.38,39 & 40/AHD/2011(BY REVENUE) AND CO NOS.45 & 46/AHD/2011(BY ASSESSEE) ( IN ITA NOS.38 & 39/AHD/2011 ) AYS 2008-09,2009-10 & 2010-11( RESPECTIVELY ) - 4 - HAVE FILED THEIR RETURNS OF INCOME AND PAID THEIR T AXES DUE AS APPLICABLE. THE ASSESSEES CASE IS DULY COVERED BY THE CBDT CIR CULAR AND THE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CAS E OF HINDUSTAN COCOA-COLA BEVERAGE (P)LTD.(SUPRA). THE REVENUE CO ULD NOT CONTROVERT THE FINDING OF THE LD.CIT(A) BY PLACING ANY RELEVAN T MATERIAL ON RECORD, THEREFORE IN OUR CONSIDERED VIEW, WE DO NOT FIND AN Y INFIRMITY IN THE ORDER OF THE LD.CIT(A) AS HE HAS RIGHTLY FOLLOWED T HE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF HINDUSTA N COCA-COLA BEVERAGE (P) LTD.(SUPRA), THE SAME IS HEREBY UPHELD . THEREFORE, GROUND NOS.1 & 2 RAISED BY THE REVENUE ARE REJECTED. 5. AS A RESULT, REVENUES APPEAL IN ITA NO.38/AHD/2 011 FOR AY 2008-09 IS DISMISSED. 6. NOW, WE TAKE UP THE ASSESSEES CROSS-OBJECTION, I.E. CO NO.45/AHD/2011 FOR AY 2008-09 (IN ITA NO.38/AHD/201 1). IN THIS CROSS-OBJECTION, THE ASSESSEE HAS RAISED THE FOLLOW ING COMMON GROUNDS:- (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D AS PER LAW, THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERR ED IN CONFIRMING CHARGE OF TAX AS INTEREST U/S.201(1) AND 201(1A) OF THE ACT, IN RESPECT OF PAYMENT OF INTEREST TO TM L FINANCE LIMITED. (2) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR V ARY ANY OF THE GROUNDS OF APPEAL. 6.1. LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO. HE SUBMITTED T HAT EVEN IF ANY LIABILITY IS TO BE FASTENED, IT SHOULD BE TO THE EX TENT OF THE INTEREST AMOUNT ITA NOS.38,39 & 40/AHD/2011(BY REVENUE) AND CO NOS.45 & 46/AHD/2011(BY ASSESSEE) ( IN ITA NOS.38 & 39/AHD/2011 ) AYS 2008-09,2009-10 & 2010-11( RESPECTIVELY ) - 5 - BUT NOT ON THE ENTIRE AMOUNT INCLUDING THE PRINCIPA L AMOUNT. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDERS OF THE AUTH ORITIES BELOW. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND FORCE IN THE CONTENTION OF THE LD.COUNSEL F OR THE ASSESSEE THAT THE TAX WOULD BE DEDUCTIBLE ONLY ON THE INTEREST PART A ND THE LIABILITY CAN BE FASTENED TO THAT EXTENT. THEREFORE, WE DIRECT THE AO TO VERIFY THE CLAIM OF THE ASSESSEE WITH REGARD TO THE DEDUCTION OF TAX AND ALSO DIRECT TO COMPUTE THE LIABILITY OF THE ASSESSEE TO THE EXTENT OF INTEREST PAID BY THE ASSESSEE. THEREFORE, THIS GROUND OF THE ASSESSEES CROSS-OBJECTION IS PARTLY ALLOWED BUT FOR STATISTICAL PURPOSES. 8. AS A RESULT, ASSESSEES CROSS-OBJECTION, I.E. CO NO.45/AHD/2011 (IN ITA NO.38/AHD/2011) IS PARTLY ALLOWED FOR STATISTIC AL PURPOSES ONLY. 9. LASTLY, WE TAKE UP THE REMAINING TWO REVENUES A PPEALS, I.E. ITA NOS.39 & 40/AHD/2011 (AYS 2009-10 & 2010-11 RESPECT IVELY) AND ASSESSEES CROSS OBJECTION NO.46/AHD/2011 FOR AY 20 09-10 (IN ITA NO.39/AHD/2011), WHEREIN FOLLOWING COMMON GROUNDS H AVE BEEN RAISED BY THE PARTIES:- ITA NO.39/AHD/2011 FOR AY 2009-10 (BY REVENUE) 1. THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS FACTS OF THE CASE IN DELETING THE ORDER PASSED U/S.201(1) & INTEREST CHA RGED U/S.201(1A) OF THE IT ACT OF RS28,20,007/- AND RS.2,87,093/- FOR AY 2009-10 BY THE A.O. 2. THE LD.CIT(A) ERRED IN LAW AS WELL AS ON FACTS IN T REATING THE JCB CHARGES, TRACTOR CARTING CHARGES, ROLLER CHARGES A S CONTRACTUAL PAYMENTS INSTEAD OF RENT U/S.194-I OF THE ACT. ITA NOS.38,39 & 40/AHD/2011(BY REVENUE) AND CO NOS.45 & 46/AHD/2011(BY ASSESSEE) ( IN ITA NOS.38 & 39/AHD/2011 ) AYS 2008-09,2009-10 & 2010-11( RESPECTIVELY ) - 6 - 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. 5. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.C IT(A) MAY BE CANCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EFFECT. ITA NO.40/AHD/2011 FOR AY 2010-11 (BY REVENUE) 1. THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS FACTS OF THE CASE IN DELETING THE ORDER PASSED U/S.201(1) & INTEREST CHA RGED U/S.201(1A) OF THE IT ACT OF RS.13,25,968/- AND RS.70,521/- FO R AY 2010-11 BY THE A.O. 2. THE LD.CIT(A) ERRED IN LAW AS WELL AS ON FACTS IN T REATING THE JCB CHARGES AND ROLLER CHARGES AS CONTRACTUAL PAYMENTS INSTEAD OF RENT U/S.194-I OF THE ACT. 3. THE LD.CIT(A) ERRED IN LAW AS WELL AS ON FACT IN HO LDING THAT THE DECISION OF THE HONBLE SUPREME COURT IS APPLICABLE FOR A.Y. 2010- 11 SINCE FOR THE SAID A.Y. THE DECDUCTEE HAD NOT PA ID TAX BEFORE PASSING THE ORDER U/S.201(1) AND 201(1A) OF THE ACT . 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 5. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. 6. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.C IT(A) MAY BE CANCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EFFECT. CO NO.46/AHD/2011 (BY ASSESSEE) (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D AS PER LAW, THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERR ED IN CONFIRMING CHARGE OF TAX AS INTEREST U/S.201(1) AND 201(1A) OF THE ACT, IN RESPECT OF PAYMENT OF INTEREST TO TM L FINANCE LIMITED. (2) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR V ARY ANY OF THE GROUNDS OF APPEAL. 10. SO FAR THE GROUND NOS.1& 2 IN REVENUES APPEALS FOR AYS 2009-10 AND 2010-11 ARE CONCERNED, SINCE THE FACTS AND CIRC UMSTANCES ARE SIMILAR TO THE FACTS AND CIRCUMSTANCES IN REVENUES APPEAL, I.E. ITA ITA NOS.38,39 & 40/AHD/2011(BY REVENUE) AND CO NOS.45 & 46/AHD/2011(BY ASSESSEE) ( IN ITA NOS.38 & 39/AHD/2011 ) AYS 2008-09,2009-10 & 2010-11( RESPECTIVELY ) - 7 - NO.38/AHD/2011 FOR A.Y. 2008-09 IN ASSESSEES OWN C ASE (SUPRA), WE CONFIRM THE ORDERS OF THE LD.CIT(A) IN BOTH THE CAS ES AND FOR THE SAME REASONING STATED IN THE REVENUES APPEAL (I.E.ITA N O.38/AHD/2011- SUPRA), WE DISMISS BOTH THE GROUNDS RAISED BY THE REVENUE. SO FAR GROUND NO.3 IS CONCERNED FOR AY 2010-11 IN REVENUE S APPEAL, THE SAME IS DEALT WITH BY US IN ASSESSEES CROSS-OBJECTION N O.45/AHD/2011 FOR AY 2008-09 (IN ITA NO.38/AHD/2011), THEREIN WE HAVE PA RTLY ALLOWED THE ASSESSEES CROSS-OBJECTION, THEREFORE REVENUES APP EAL FOR AY 2010-11 IS ALSO PARTLY ALLOWED BUT FOR STATISTICAL PURPOSES. 11. WE SUMMARIZE THE RESULT AS UNDER:- (1) REVENUES APPEALS, I.E. ITA NOS.38 & 39/AHD/2 011 FOR AYS 2008-09 & 2009-10 ARE DISMISSED, WHEREA S REVENUES APPEAL, I.E. ITA NO.40/AHD/2011 F OR AY 2010-11 IS PARTLY ALLOWED FOR STATISTICA L PURPOSES ONLY. (2) ASSESSEES CROSS OBJECTION NOS.45 & 46/AHD/20 11 FOR AYS 2008-09 & 2009-10 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE SD/- SD/- (. ) (% &') !' # # ( A. MOHAN ALANKAMONY ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 25 / 10 /2013 S 0.., $.../ T.C. NAIR, SR. PS ORDER PRONOUNCED ON 25/10/2013 SD/- SD/- A.M. J.M. (NSS) (KB) ITA NOS.38,39 & 40/AHD/2011(BY REVENUE) AND CO NOS.45 & 46/AHD/2011(BY ASSESSEE) ( IN ITA NOS.38 & 39/AHD/2011 ) AYS 2008-09,2009-10 & 2010-11( RESPECTIVELY ) - 8 - !- !- !- !- ) 1'2 3!2,' ) 1'2 3!2,' ) 1'2 3!2,' ) 1'2 3!2,'/ COPY OF THE ORDER FORWARDED TO : 1. 45 / THE APPELLANT 2. 1645 / THE RESPONDENT. 3. ' %7 / CONCERNED CIT 4. %7() / THE CIT(A)-I, SURAT 5. 2$&8 1' , , / DR, ITAT, AHMEDABAD 6. 89 :( / GUARD FILE. !-% !-% !-% !-% / BY ORDER, 62' 1' //TRUE COPY// ; ;; ;/ // / < < < < ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 07.10.13 (DICTATION-PAD 10 P AGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 08.10.13 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 25.10.13 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25.10.13 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER