Harbans Lal Malhotra & Sons Pvt Ltd, Kolkata V. A.C.I.T Cir - 3,Kolkata, Kolkata

ITA 421/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100216 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 01-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEBASISH ROY J
• Assessee Lawyers: V N PUROHIT; H V BHARDWAJ
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 421 / KOL / 2013 ASSESSMENT YEAR :2004-05 HARBANS LAL MALHOTRA & SONS PVT. LTD., MALHOTRA HOUSE, P-12, NEW CIT ROAD, KOLKATA 700 073 [ PAN NO AAACH 6617 F ] V/S . ACIT, CIRCLE-3, AYAKAR BHAWAN, 4TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI V.N.PUROHIT, FCA & H.V.BHARDWAJ, CA /BY RESPONDENT SHRI DEBASISH ROY, JCIT-DR /DATE OF HEARING 10-11-2015 /DATE OF PRONOUNCEMENT 04-12-2015 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-XIX, KOLKATA IN APPEAL NO.156/ CIT(A)-XIX/ACIT, CIR- 3/KOL/11-12 DATED 23.11.2012. ASSESSMENT WAS FRAMED BY ACIT, CIRCLE-3, KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HER EINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 27.12.2006 FOR ASSESSMEN T YEAR 2004-05. 2. SOLE ISSUE RAISED BY ASSESSEE IN THIS APPEAL IS THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF 28,30,098/- ON ACCOUNT OF TAX DEDUCTED AT SOURCE (TDS) CERTIFICATE ISSUED AND CLAIMED BY ASSE SSEE. ITA NO.421/KOL/2013 A.Y. 2004-05 HARBANS LAL MALHOTRA & SONS PVT. LTD. V. ACIT, CIR -3 KOL. PAGE 2 DURING THE ASSESSMENT PROCEEDINGS, ASSESSING OFFICE R ASKED THE ASSESSEE TO SUBMIT THE LIST OF RECEIPTS AS PER TDS CERTIFICATE IN COMPARISON TO THE RECEIPT AS PER ACCOUNTS AND SAME IS FURNISHED BELOW:- NAME OF DEDUCTOR TOTAL TDS DEDUCTED TOTAL T.O. AS PER TDS CERTIFICATE CORRESPONDING T.O AS PER ACCOUNTS DIFFERENCE, IF ANY ADMAAC (SOUTH, WEST) 86,558/- 8,65,578/- - - 8,65,578/- PNB, KOLKATA 2,47,610/- 12,07,852/- - 10,32,510/- 1,75,342/- SBI, HOWRAH 1,14,417/- 11,44,163/- - - - 11,44,163/- -DO- 1,20,138/- 11,44,163/- - 4,99,147/- 6,45,015/- - TOTAL 28,30,098/- THE AO FOUND FROM THE ABOVE TABLE THAT ASSESSEE HAS CLAIMED TDS OF THE FULL AMOUNT BUT FAILED TO DECLARE THE INCOME IN FULL AS PER THE TDS CERTIFICATES. THE DIFFERENCE BETWEEN THE INCOME AS PER TDS CERTIFICAT ES AND AS PER ACCOUNTS IS AMOUNTING TO RS. 28,30,098/-. HENCE, THE AO ADDED THE SAME TO THE TO TAL INCOME OF ASSESSEE. 3. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) WHO UPHELD THE ACTION OF AO BY OBSERVING AS UNDER:- ON THIS ISSUE THE APPELLANT IN HIS SUBMISSION MENT IONED THAT THE SHORT CREDIT OF TDS WAS DUE TO THE FACT THAT PART INCOME OF THE TDS CERTIFICATE WAS ALREADY OFFERED FOR TAXATION IN THE EARLIER YEA R BECAUSE OF THE MERCANTILE SYSTEM OF ACCOUNTING BEING FOLLOWED BY T HE ASSESSEE YEAR TO YEAR. THE ASSESSEE WAS ALSO OF THE OPINION THAT THE REVENUE IS IN NO WAY IN LOSS OR THE ASSESSEE HAS NOT DEFERRED THE PA YMENT OF TAXES ANY WAY. IT IS FURTHER STATED THAT IN FACT THE ASSESSEE PAID THE TAXES FROM HIS OWN POCKET IN ADVANCE AND CLAIMED THE TDS AFTERWARD AND THEREFORE HE SHOULD NOT BE PENALIZED FOR PAYING THE TAXES IN ADV ANCE. THE APPELLANT ABOVE SUBMISSION IS NOT FREE FROM DOU BT AS BEFORE THE AO SUCH EXPLANATION WAS NEVER OFFERED RATHER IT IS THE ASSESSEE WHO HAS HIMSELF CALCULATED THE DIFFERENCE WITH RESPECT TO V ARIOUS TDS CERTIFICATES TOTALING TO RS.28,30,098/-. IN VIEW OF ABOVE FACTS THE A/R SUBMISSIONS THAT THE PART INCOME OF THE TDS CERTIFICATE WAS ALR EADY OFFERED FOR ITA NO.421/KOL/2013 A.Y. 2004-05 HARBANS LAL MALHOTRA & SONS PVT. LTD. V. ACIT, CIR -3 KOL. PAGE 3 TAXATION IN THE EARLIER YEAR IS AN AFTER-THOUGHT AN D IT IS UNSUBSTANTIATED AND FRESH EXPLANATION WHICH IS UNACCEPTABLE. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E PREFERRED SECOND APPEAL BEFORE US ON THE FOLLOWING GROUND:- 1) THAT THE COMMISSIONER OF INCOME TAX (APPEALS)-X IV HAS ERRED, BOTH ON FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMIN G ADDITION OF RS.28,30,098/- AS MADE BY A.C.I.T. ON BASIS OF TDS CERTIFICATES ISSUED AND CLAIM MADE BY ASSESSEE ON BASIS OF SYSTEM OF AC COUNTING OF INTEREST INCOME BEING CONSISTENTLY FOLLOWED BY THE ASSESSEE COMPANY. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIALS AVAILABLE ON RECORD. BEFORE US LD. AR SUBMITTED PAPER BOOK RUNNI NG PAGES FROM 1 TO 34 AND STATED AS UNDER : REGARDING THE TDS CERTIFICATE ISSUED BY ADMAAC, SOU TH WEST FOR AN AMOUNT OF 86,558/-. IT WAS SUBMITTED THAT ASSESSEE HAS SHOWN ITS INCOME IN THE FINANCIAL YEAR 2002-03 ON THE BASIS OF MERCANTILE S YSTEM OF ACCOUNTING. HOWEVER, THE PARTY ISSUED THE TDS CERTIFICATES IN T HE FINANCIAL YEAR 2003-04. SO THE INCOME ON TDS CERTIFICATE WAS DULY OFFERED F OR TAX IN THE FINANCIAL YEAR 2002-03. IN SUPPORT OF HIS CLAIM, THE LD. AR HAS SU BMITTED AUDITED SCHEDULE OF INCOME ALONG WITH THE BREAKUP OF INTEREST FOR THE F INANCIAL YEAR 2002-03 WHICH ARE PLACED ON PAGES 6 & 7 OF THE PAPER BOOK. THE AS SESSEE CLAIMED THE CREDIT OF TDS CERTIFICATE FOR THE SAID AMOUNT OF RS. 86558 /- IN THE RELEVANT PREVIOUS YEAR 2002-03 BUT THE SAME WAS NOT ALLOWED BY THE AO . THE LD. AR HAS SUBMITTED THE ASSESSMENT ORDER FOR THE PREVIOUS YEA R 2002-03 WITH THE DETAILS OF TDS REJECTED AND THE DETAILS OF THE TDS CLAIMED BY THE ASSESSEE WHICH ARE PLACED ON PAGES 26 TO 29 AND 34 OF THE PAPER BOOK. THE LD. AR ALSO SUBMITTED THAT THE ASSESSEE HAS PAID ITS TAX OUT OF ITS OWN F UND AND ASSESSEE CLAIMED THE BENEFIT OF TDS IN SUBSEQUENT YEAR I.E. FY 2003- 04 AND TDS CERTIFICATE IS PLACED AT PAGE 25 OF ASSESSEES PAPER BOOK. FROM TH E DETAILS SUBMITTED BY THE LD. AR, WE FIND NO INFIRMITY OR AMBIGUITY OF AN Y TYPE. ITA NO.421/KOL/2013 A.Y. 2004-05 HARBANS LAL MALHOTRA & SONS PVT. LTD. V. ACIT, CIR -3 KOL. PAGE 4 AS REGARDS THE TDS CERTIFICATE ISSUED BY PNB, KOLKA TA FOR AN AMOUNT OF 1,75,342/-. IT IS SUBMITTED THAT ASSESSEE HAS FOLLO WED MERCANTILE SYSTEM OF ACCOUNTING AND DECLARED ALL ITS INCOME ON ACCRUAL B ASIS. HOWEVER, THE PNB PAID INTEREST ON THE FIXED DEPOSIT IN AY 2004-05 ON THE BASIS OF CASH ACCOUNTING SYSTEM, SO THE TDS WAS DEDUCTED IN THE A Y 2004-05. IN SUPPORT OF HIS CLAIM THE LD. AR HAS PRODUCED INTEREST CERTIFIC ATE FOR AN AMOUNT OF RS. 175342.00 FROM THE PNB CLARIFYING THAT THIS IS THE INTEREST PERTAINING TO THE FINANCIAL YEAR 2000-2001 WHICH IS PLACED AT PAGE 23 OF THE PAPER BOOK. THE LD. AR CLAIMS THAT THE ASSESSEE HAS OFFERED SUCH INCOME FOR TAXATION IN THE ASSESSMENT YEAR 2001-02 AND IN SUPPORT OF HIS CLAIM THE ASSESSEE HAS SUBMITTED AUDITED INTEREST INCOME SCHEDULE ALONG WI TH THE BREAKUP OF THE INTEREST WHICH ARE PLACED ON PAGE 10 AND 11 OF THE PAPER BOOK. AS REGARDS, TWO TDS CERTIFICATES ISSUED FROM SBI, H OWRAH FOR AN AMOUNT OF 234555.00 (114417+120138) THE CORRESPONDING WAS BO OKED ON MERCANTILE BASIS AND THE BANK DEDUCTED TDS ON THE INTEREST ACC RUED ON MATURITY BASED ON CASH SYSTEM OF ACCOUNTING. IN SUPPORT OF THE INT EREST INCOME FROM SBI ON FIXED DEPOSITS, THE ASSESSEE SUBMITTED THE DETAIL B REAKUP OF THE INTEREST INCOME DECLARED BY THE ASSESSEE, WHICH IS PLACED ON PAGE 16 OF THE PAPER BOOK. THE BANK WAS TO DEDUCT THE TDS @20.50% OF THE INTEREST INCOME BUT DEDUCTED @ 10% AND 10.50% RESPECTIVELY, THEREFORE I SSUED TWO TDS CERTIFICATES. THE AO ON THE BASIS OF TWO TDS CERTIF ICATE HAS TREATED THE SAME AMOUNT TWICE AND ADDED TO THE INCOME OF THE ASSESSE E. HOWEVER THE ASSESSEE HAS SUBMITTED THE CLARIFICATION LETTER FRO M BANK REGARDING THE INTEREST INCOME FROM SBI WHICH IS PLACED AT PAGE 18 OF THE P APER BOOK CERTIFYING THAT THE BOTH THE TDS CERTIFICATE RELATE TO THE SINGLE I NTEREST INCOME. THE TDS CERTIFICATES ARE ALSO PLACED ON PAGES 19 AND 20 OF THE PAPER BOOK. THE LD. AR ALSO SUBMITTED THE DETAILED WORKING INTEREST YEAR W ISE WHEN THE SAME WAS OFFERED TO TAX ON THE BASIS OF MERCANTILE ACCOUNTIN G SYSTEM WHICH IS PLACED ON PAGE 17 OF THE PAPER BOOK. ON THE OTHER HAND, LD. D R VEHEMENTLY RELIED ON THE ORDERS OF AUTHORITIES BELOW. ITA NO.421/KOL/2013 A.Y. 2004-05 HARBANS LAL MALHOTRA & SONS PVT. LTD. V. ACIT, CIR -3 KOL. PAGE 5 5. FROM THE AFORESAID DISCUSSION, WE FIND THAT AO A T THE TIME OF ASSESSMENT MADE RECONCILIATION BETWEEN INCOME BASED ON TDS CERTIFICATES AND THE ACTUAL INCOME OFFERED TO TAX. THE AO FOUND THE DIFFERENCE BETWEEN THE INCOME AS PER TDS CERTIFICATES AND INCOME SHOWN BY ASSESSEE. AS PER AO THE ASSESSEE HAS DECLARED LESS INCOME AND CLAIME D THE FULL CREDIT OF THE TDS. ACCORDINGLY THE AO HAS ADDED THE UNDISCLOSED I NCOME FOR THE ABOVE STATED AMOUNT. HOWEVER, WE FIND FROM THE SUBMISSION OF LD.AR THAT ALL THE INCOME HAVING DULY SHOWN IN THE RELEVANT YEAR BY AS SESSEE AND TAX THEREON HAS BEEN DULY PAID AS PER MERCANTILE ACCOUNTING SYS TEM. THE REASON FOR THE DIFFERENCE WAS MAINLY ON ACCOUNT OF INTEREST INCOME WHICH THE ASSESSEE HAS DECLARED ON THE BASIS OF MERCANTILE ACCOUNTING SYST EM AND THE PAYER DEDUCTED THE TDS ON THE CASH BASIS OF ACCOUNTING. T HE LD. AR HAS SUBMITTED SUFFICIENT NUMBER OF DOCUMENTS IN THE FORM OF THE P APER BOOK AND WE FOUND NO AMBIGUITY FROM THE DETAILS SUBMITTED. IN VIEW OF AB OVE, WE REVERSE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE ADDITION MADE B Y AO WHICH CONFIRMED BY LD. CIT(A). 6. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 04/12 /2015 SD/- SD/- (MAHAVIR SINGH) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 04 /1 2 /2015 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-HARBANS LAL MALHOTRA & SONS PVT. LTD., MALHO TRA HOUSE, P-12, NEW CIT, ROAD, K OLKATA-700 073 2. /RESPONDENT-ACIT, CIR-3, AYAKAR BHAWA, 4 TH FL, P-7, CHOWRINGHEE SQ., KOL-69 3. * +, - - . / CONCERNED CIT KOLKATA 4. - - .- / CIT (A) KOLKATA 5. 012 33+,, - +, , / DR, ITAT, KOLKATA 6. 267 89 / GUARD FILE. BY ORDER/ - , /TRUE COPY/ / - +, ,