Quippo Oil and Gas Infrastructure Ltd., New Delhi V. DCIT, New Delhi

ITA 4313/DEL/2015

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 2924 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 03-07-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUSHMA SINGH
• Keywords: Competent authority; Commercial expediency; TDS
• Section: 40(a)(ia); 22

Judgement Text

ITA NO.-4313/DEL/2015 QUIPPO OIL AND GAS INFRASTRUCTURE LTD. PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: F: NEW DELHI) (THROUGH VIDEO CONFERENCING) BEFORE SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBE R AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 4313/DEL/2015 ( ASSESSMENT YEAR: 2010-11) QUIPPO OIL AND GAS INFRASTRUCTURE LIMITED D-2, 5 TH FLOOR, SOUTHERN PARK, SAKET PALACE, SAKET, NEW DELHI-110017 VS. DEPUTY COMMISSIONER OF INCOME TAX- CIRCLE -14(1), NEW DELHI APPELLANT RESPONDENT PAN NO: AAAC Q1278P REVENUE BY : SMT. SUSHMA SINGH, CIT-DR ASSESSEE BY : SMT. ALKA ARREN , ADV. PER ANADEE NATH MISSHRA, A.M.: (A) THIS APPEAL BY THE ASSESSEE IS FILED AGAINST THE OR DER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-VII, NEW DELHI, [LD. CIT(A), FOR SHORT], DATED 17/03/2015 FOR ASSESSMENT YEAR 2010-11. GROUNDS TAKEN IN THIS APPE AL OF ASSESSEE ARE AS UNDER : 1.0 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [HERE- IN-AFTER REFERRED TO AS LD. CIT(APPEALS)] WAS NOT JUSTIFIED & GROSSLY ERRED IN CONFIRMING THE DISALLOWANCE OF MOBILIZATION EXPE NSES U/S 40(A)(IA) OF RS. 3,84,56,000/- FOR NON DEDUCTION OF TAX WITHOUT ITA NO.-4313/DEL/2015 QUIPPO OIL AND GAS INFRASTRUCTURE LTD. PAGE 2 OF 5 CONSIDERING THE FACT THAT THE APPELLANT WAS NOT LIA BLE TO DEDUCT TDS ON ENTIRE AMOUNT. 2.0 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN HOLDING THAT THE APPELLANT WAS NOT COVERED BY SECTION194C (6) OF THE ACT WITHO UT PROVIDING ANY REASON FOR SUCH CONCLUSION AND WITHOUT CONSIDER ING THE SUBMISSIONS OF THE APPELLANT. 3.0 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, AND WITHOUT PREJUDICE TO THE GROUND NO. 1.0 & 2.0 TAKEN HERE-IN- ABOVE, THE LD. CIT(APPEALS) WAS NOT JUSTIFIED & GRO SSLY ERRED IN CONFIRMING THE ADDITION OF THE ENTIRE AMOUNT U/S 40 (A)(IA) OF RS. 3,84,56,000/- INSTEAD OF RS. 2,86,56,000/- AS THE A PPELLANT HAD DULY DEDUCTED TDS ON BALANCE AMOUNT OF RS. 98,00,00 0/-. 4.0 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) WAS NOT JUSTIFIED & GROSSLY ERRED IN CONFIRMING DISALLOWANCE OF PROFESSIONAL CHARGES U/S 40(A)(IA) AMOUNTING TO RS. 8,07,512/- FOR DEDUCTION OF TAX AT A LOWER RATE IN COMPUTING TOTAL INCOME UNDER THE NORMAL PROVISIONS OF THE ACT . 5.0 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) WAS NOT JUSTIFIED & GROSSLY ERRED IN CONFIRMING DISALLOWANCE OF INTEREST U/S 36(1)(III) AMOUNTING T O RS. 4,89,69,642/- CONTENDING THAT BORROWINGS WERE GIVEN TO RELATED ENTITY AT A LOWER RATE AND THERE WAS NO COMMERCIAL EXPEDIENCY IN THE TRANSACTION. 6.0 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) WAS NOT JUSTIFIED & GROSSLY ERRED IN NOT CONSIDERING THE FACT THAT LOANS MADE TO THE SUBSIDI ARY COMPANY WERE AT A HIGHER RATE THAN THE RATE AT WHICYH THE A PPELLANT HAD MADE THE BORROWINGS AND HENCE THERE WAS NO DIVERSIO N OF FUNDS AT LOWER RATES. 7.0 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, AND WITHOUT PREJUDICE TO THE GROUND NO. 5.0 & 6.0 TAKEN HERE-IN- ABOVE, THE LD. CIT(APPEALS) WAS NOT JUSTIFIED & GR OSSLY ERRED IN CONSIDERING GROSS INTEREST EXPENSE AT RS. 7,73,47,7 37/- INSTEAD OF AMOUNT ACTUALLY INCURRED AT RS. 7,36,71,782/-, THER EBY RESULTING IN EXCESS DISALLOWANCE BY RS. 36,75,955/- IN COMPUT ING TOTAL INCOME UNDER THE NORMAL PROVISIONS OF THE ACT. 8.0 THAT THE APPELLANT CRAVES LEAVE TO ADD, TO AME ND, MODIFY, RESCIND, SUPPLEMENT OR ALTER ANY OF THE GROUNDS STA TED HERE-IN- ABOVE, EITHER BEFORE OR AT THE TIME OF HEARING OF T HIS APPEAL. ITA NO.-4313/DEL/2015 QUIPPO OIL AND GAS INFRASTRUCTURE LTD. PAGE 3 OF 5 (B) AT THE TIME OF HEARING, AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE INFORMED US THAT THE ASSESSEE HAS OPTED TO SETTLE T HE AFOREMENTIONED APPEAL UNDER VIVAD SE VISHWAS SCHEME, 2020 (VSVS, FOR SHORT) AND THA T THE ASSESSEE HAS ALREADY FILED THE RELEVANT FORMS. SHE ALSO INFORMED THAT FORM-3 HAS B EEN ISSUED BY COMPETENT AUTHORITY UNDER VSVS. THE LD. COUNSEL FOR ASSESSEE ALSO DRE W OUR ATTENTION TO LETTER DATED 22 ND FEBRUARY, 2021 FILED IN INCOME TAX APPELLATE TRIBUN AL (ITAT, FOR SHORT) GIVING INTIMATION FOR THE SAME, AND REQUESTING TO WITHDRAW THIS APPEA L. (B.1) AT THE TIME OF HEARING BEFORE US, THE LD. COUNSEL F OR ASSESSEE AS WELL AS THE LEARNED COMMISSIONER OF INCOME TAX (DEPARTMENTAL R EPRESENTATIVE) (LD. CIT- DR, FOR SHORT) SUBMITTED BEFORE US THAT THIS APPEAL MAY BE TREATED AS WITHDRAWN AND MAY BE DISMISSED ON ACCOUNT OF THE AFORESAID VSVS. AFTER DUE CONSIDERATION, AND IN VIEW OF THE FOREGOING; AND AS BOTH SIDES HAVE AGREED TO THIS; W E ARE OF THE VIEW THAT THIS APPEAL HAS BECOME INFRUCTUOUS, AND TREAT THIS APPEAL AS WITHDR AWN ON ACCOUNT OF THE AFORESAID VSVS. ACCORDINGLY, THIS APPEAL HAVING BECOME INFRUCTUOUS, IS HEREBY DISMISSED AS WITHDRAWN, SUBJECT TO SETTLEMENT OF THE DISPUTES IN THE APPEAL S UNDER THE AFORESAID VSVS. (C) BEFORE WE PART, WE HEREBY CLARIFY, BY WAY OF AB UNDANT CAUTION, THAT IF FOR SOME REASON THE DISPUTES UNDER THIS APPEAL BEFORE U S ARE NOT SETTLED UNDER THE AFORESAID VSVS, THEN THE ASSESSEE WILL BE AT LIBERTY TO APPRO ACH ITAT FOR RESTORATION OF THIS APPEAL, IN ACCORDANCE WITH LAW. (D) IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ITA NO.-4313/DEL/2015 QUIPPO OIL AND GAS INFRASTRUCTURE LTD. PAGE 4 OF 5 OUR ORDER WAS ALREADY PRONOUNCED ORALLY IN OPEN COU RT ON 22.02.2021 IN THE PRESENCE OF THE REPRESENTATIVE OF BOTH SIDES; AFTER THE CONCLUSION OF HEARING. NOW THIS ORDER IN WRITING IS BEING RELEASED TODAY ON 23/02/2 1. SD/- SD/- (SUDHANSHU SRIVASTAVA) (ANAD EE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTA NT MEMBER DATED: 23/02/2021 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5.DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI