Laxmi Swapnapurti Planners & Developers Pvt.Ltd., Nagpur V. The Dy.commissioner of Income Tax,TDS Circle-1, Nagpur

ITA 44/NAG/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9579 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 05-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR MILIND BHUSARI
• Section: 143(3); 201(1); 263

Judgement Text

ITA NO S . 43&44/NAGPUR/2010 LAXMI SWAPNAPURTI PLANNERS & DEVELOPERS PVT. LTD., NAGPUR IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH , NAGPUR BEFORE: SHRI P.K. BANSAL , ACCOUNTANT MEMBER AND SHRI D.T. GARASIA , JUDICIAL MEMBER ITA NO. 43 & 44 / NAGPUR / 20 10 ASSESSMENT YEAR : 2006 - 07 & 2007 - 08 LAXMI SWAPNAPURTI PLAN NERS & DEVELOPERS PVT. LTD. NAGPUR VS. DCIT, TDS, CIRCLE - 1 NAGPUR (APPELLANT) (RESPONDENT) PAN NO.AABCL 2203N APPELLANT BY: DR. MILIND BHUSARI, CIT(DR) RESPONDENT BY: SHRI K.P. DEWANI, ADVOCATE DATE OF HEARING: 10.10.2012 DATE OF PRONOUNCEMENT: 12.10.2012 ORDER PER P.K. BANSAL, ACCOUNTANT MEMBER: - BOTH THESE APPEALS HAVE BEEN FILED AGAINST THE COMMON ORDER OF THE CIT(A) DATED 30.12.2009 BELONGING TO THE SAME ASSESSEE. IN BOTH THE APPEALS, THE ASSESSEE HAS TAKEN THE COMMON GROUNDS EXCEPT THE CHANGE IN FIGURE IN GROUND NO.3&4. ITA NO.43/NAGPUR/2010: 2. THE BRIEF FACTS OF THE CASE ARE THAT THERE HAD BEEN SURVEY IN THE BUSINESS PREMISES OF THE ASSESSEE ON 30.4.2008. DURING THE COURSE OF SURVEY AS PER THE DOCUMENTS COLLECTED AND THE STATEM ENT OF THE SALES EXECUTIVE IT WAS FOUND BY THE ASSESSING OFFICER THAT THE COMMISSION PAYMENTS WERE ALSO PAID IN CASH IN ADDITION TO PAYMENT MADE TO THE SALE S EXECUTIVE BY CHEQUE. THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THERE WAS A DEFAULT ON THE PART OF THE ASSESSEE TO DEDUCT TAX AT SOURCE U/S 194H OF THE INCOME - TAX ACT . ACCORDINGLY, ASSESSING OFFICER BY PASSING THE ORDER U/S 201(1) R .W.S. 194H DETERMINED THE TDS LIABILITY AND INTEREST LIABILITY AS UNDER: ITA NOS.43&44/NAGPUR/2010 LAXMI SWAPNAPURTI PLANNERS & DEVELOPERS PVT. LTD., NAGPUR 2 F. YR. COMMISSION AMOUNT TDS LIABILITY INTEREST U/S 201(1A) 2006 - 07 RS.2,20,09,695/ - RS.11,59,911/ - RS.1,84,784/ - 2007 - 08 RS.6,92,08,978/ - RS.36,86,160/ - RS.1,67,460/ - 3. WHEN THE CIT(A) ASKED FOR THE REMAND REPORT ISSU ING LETTER/NOTICES TO THE ASSESSEE, THE ASSESSEE DID NOT COMPLY WITH TH E SAME. THEREFORE, THE ASSESSING OFFICER HAS TO ARRIVE AT THE TDS LIABILITY ON THE BASIS OF THE MATERIAL GATHERED DURING SURVEY PROCEEDINGS. THE CIT(A) ALSO GAVE THE OPPORTUNITY TO THE ASSESSEE BUT NO VAIN. ULTIMATELY, CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER BY OBSERVING AS UNDER: THE FACTS OF THE CASE AND THE MATERIAL GATHERED AND THE EVIDENCES OBTAINED IN THE FORM OF RECORDING THE STATEMENTS OF THE SALES EXECUTIVES OF THE APPELLANT CLEARLY ESTABLISH THE APPLICABILITY OF TDS PROVISIONS U/S 194H OF THE I.T. ACT FOR THE COMMISSION PAYMENTS MADE BY THE APPELLANT. THE ONLY ISSUE WAS THE QUANTUM OF SUCH TDS LIABILITY AND THE AMOUNT OF LIABILITY DISCHARGED AND THE BALANCE REQUIRED TO BE DISCHARGED. SINCE THE APPELLANT HAS NOT BEEN ABLE TO ADDUC E THE NECESSARY EVIDENCES IN THE FORM OF AUDITED ACCOUNTS, BY TAKING INTO ACCOUNT ALL THE MATERIALS FOUND/IMPOUNDED DURING THE SURVEY PROCEEDINGS, THE QUANTUMS OF COMMISSION PAYMENTS AS ARRIVED AT BY THE A.O. IN THE ORDERS PASSED U/S 201(1) R.W.S. 194H OF THE I.T. ACT ARE TAKEN TO BE CORRECT. ACCORDINGLY, THE TDS LIABILITY DETERMINED U/S 201(1) OF THE I.T. ACT AND THE INTEREST LIABILITY U/S 201(1A) OF THE I.T. ACT HAVE TO BE TAKEN AS THE CORRECT LIABILITIES THAT SHOULD HAVE BEEN DISCHARGED BY THE APPELLANT . THE ASSESSING OFFICER, IN THE HEADING OF THE ORDERS HAS OMITTED TO MENTION SECTION 201(1A) OF THE I.T. ACT IN RESPECT OF THE INTEREST LIABILITY WORKED OUT IN THE ORDER. THE A.O. IS HEREBY DIRECTED TO MAKE THE NECESSARY CORRECTION SO AS TO REFLECT BOTH THE SECTIONS I.E. SECTION 201(1) AS WELL AS SECTION 201(1A) OF THE I.T. ACT. IN VIEW OF THE FOREGOING, THE ORDERS PASSED U/S 201(1) & 201(1A) R.W.S. 194H OF THE I.T. ACT ARE HEREBY UPHELD. 4. AT THE TIME OF HEARING, THE LD. A.R. DRAWN OUR ATTENTION TO T HE ORDER PASSED U/S 263 FOR THE ASSESSMENT YEAR 2007 - 08 ON THE BASIS OF THE ORDER OF THE DCIT TDS CIRCLE - 1 IN WHICH IT WAS HELD THAT AN AMOUNT OF RS.2,20,09,695/ - WAS THE TOTAL COMMISSION PAID BY THE ASSESSEE AND ALSO THAT THE ASSESSEE HAS NOT DEDUCTED TAX ON THE PAYMENTS. CIT THEREFORE TOOK THE VIEW THAT THE ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND DIRECTED THE ASSESSING OFFICER TO MAKE THE ASSESSMENT AFRESH IN ACCORDANCE WITH THE PR OVISIONS OF THE INCOME - TAX ACT AND APPLICABLE CIRCULAR/JUDICIAL DECISIONS AFTER MAKING APPROPRIATE ENQUIRY OF CERTAIN POINTS AS ENUMERATED THEREIN. ONE OF THE ISSUE RELATE TO THE QUANTIFICATION OF THE COMMISSION PAID BY THE ASSESSEE ITA NOS.43&44/NAGPUR/2010 LAXMI SWAPNAPURTI PLANNERS & DEVELOPERS PVT. LTD., NAGPUR 3 COMPANY FOR THE PURPOS E OF APPLICABILITY OF DISALLOWANCE U/S 40(A)(IA). THE ASSESSEE HAS DEBITED THE FIGURE OF RS.2,20,09,695/ - AS THERE WAS NOT ONLY A MISTAKE IN THIS FIGURE, BUT THE STATEMENT OF THE PARTIES ARE ALSO NOT SUBMITTED TO THE ASSESSEE. THUS , IT WAS CONTENDED THAT THIS ASSESSMENT MAY BE SET ASIDE AND RESTORE TO THE FILE OF THE ASSESSING OFFICER AS THERE CANNOT BE DIFFERENCE ABOUT THE QUANTIFICATION OF THE COMMISSION , WHATEVER COMMISSION PAYMENT IS COMPUTED BY THE ASSESSING OFFICER BUT THE SAME FIGURE SHOULD BE TAKE N FOR THE PURPOSE OF THE ORDER PASSED U/S 201(1) R.W.S. 194H WITHOUT PREJUDICE TO THE LEGAL RIGHT OF THE ASSESSEE TO CHALLENGE THE LIABILITY SO ARISEN BEFORE THE APPELLATE AUTHORITY. REFERRING TO THE ORDER FOR THE ASSESSMENT YEAR 2008 - 09 , IT WAS POINTED O UT THAT THE ASSESSING OFFICER DISALLOWED THE COMMISSION PAID IN THE REGULAR ASSESSMENT. IN THE REMAND PROCEEDINGS, THE ASSESSEE HAS GIVEN ALL THE DETAILS ALONG WITH THE NAME OF THE PERSON TO WHOM THE COMMISSION WAS PAID AND THE DETAILS OF TDS MADE. THE A SSESSING OFFICER FOUND THESE DETAILS TO BE CORRECT AND ON THIS BASIS , THE CIT(A) DELETED THE ADDITIONS . THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF THE CIT(A). THE TDS ASSESSING OFFICER HAS ESTIMATED THE AMOUNT OF THE COMMISSION IN THE CASE OF THE ASSESSEE AT A HIGH FIGURE WHICH IS NOT MATCHING WITH THE FIGURES AS HAS BEEN AFFIRMED BY THE CIT(A). THE LD. D.R. WAS FAIR ENOUGH TO CONCEDE THE POSITION THAT THE MATTER BE RESTORED TO THE FILE OF THE ASSESSING OFFICER , SO AS TO REVISE THE FIGURES OF THE PAYMENT OF THE COMMISSION ON WHICH ASSESSEE FAILED TO DEDUCT TDS IN ACCORDANCE WITH THE FIGURES AS HAS BEEN WORKED OUT BY THE ASSESSING OFFICER IN CONSEQUENCE OF THE ORDER PASSED U/S 143(3) R.W.S. 263 FOR THE ASSESSMENT YEAR 2007 - 08. SIMILARLY, FO R THE ASSESSMENT YEAR 2008 - 09, THE ASSESSING OFFICER MAY WORK OUT THE FIGURE OF THE COMMISSION AFTER TAKING INTO ACCOUNT THE REMAND REPORT AS FILED BY THE ASSESSING OFFICER TO FRAME THE ASSESSMENT ORDER U/S 143(3) AS THOSE FIGURE H A S BECOME FINAL IN VIEW O F THE ORDER OF THE CIT(A). 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS ALONG WITH THE ORDER OF THE TAX AUTHORITIES BELOW. WE FIND FORCE IN THE SUBMISSION OF THE LD. A.R. THAT THE TDS ASSESSING OFFICER HAS TAKEN THE FIGURE OF THE COMMISSION PAID IN BOTH THE ASSESSMENT YEAR S DIFFERENT FROM THE FIGURES AS HAS BEEN TAKEN BY THE ASSESSING OFFICER WHO PASSED THE ORDER U/S 143(3). THE FIGURES FOR THE ASSESSMENT YEAR 2008 - 09 (FIN. YEAR 2007 - 08) HAS BECOME FINAL IN VIEW OF THE FACT THAT THE CIT(A) S ORD ER HAS ITA NOS.43&44/NAGPUR/2010 LAXMI SWAPNAPURTI PLANNERS & DEVELOPERS PVT. LTD., NAGPUR 4 BECOME FINAL AND NO APPEAL HAS BEEN FILED AGAINST THAT ORDER AND ACCORDINGLY, WE SET ASIDE THE TDS ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2008 - 09 (F IN . YEAR 2007 - 08 ) AND DIRECT THE ASSESSING OFFICER TO MAKE A FRESH ASSESSMENT AFTER DETERMINING THE CORRECT FIGURE OF THE COMMISSION PAID BY THE ASSESSEE , KEEPING IN VIEW THE REMAND REPORT DATED 0 2. 0 3. 20 12 SUBMITTED BY THE JCIT TO THE CIT(A) IN THE CASE OF THE ASSESSEE DURING THE COURSE OF THE APPEAL PROCEEDINGS FOR THE ASSESSMENT YEAR 2008 - 09 AND ACCOR DINGLY RE - DETERMINED THE LIABILITY OF THE TDS DEFAULT AND INTEREST. SIMILARLY, WE SET ASIDE THE ORDER PASSED U/S 201 R.W.S. 201A FOR THE ASSESSMENT YEAR 2007 - 08 (FIN. YEAR 2006 - 07 ) AND DIRECT THE ASSESSING OFFICER TO PASS A FRESH TDS ORDER U/S 201(1) AND 201(1A) (WHICHEVER IS APPLICABLE) , IN ACCORDANCE WITH LAW , AFTER CONSIDERING THE FIGURES OF THE COMMISSION PAID AS MAY BE WORKED OUT BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER PASSED U/S 143(3) , PASSED IN CONSEQUENCE OF ORDER PASSED U/S 263 BY THE CI T. NEEDLESS TO SAY THAT THE ASSESSING OFFICER SHALL GIVE PROPER OPPORTUNITY TO THE ASSESSEE TO ADDUCE THE EVIDENCE AS HE MAY DEEM FIT TO PUT UP HIS CONTENTION. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. PR ONOUNCED IN THE OPEN COURT ON 12.10 .20 1 2 SD/ - SD/ - ( D.T. GARASIA ) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER VG/SPS NAGPUR DATED 12 TH OCTOBER , 20 1 2 COPY TO 1 LAXMI SWAPNAPURTI PLANNERS AND DEVELOPERS (P) LTD., HONEY ARCHANA APARTMENT, GROUND FLOOR, UNTKHANA ROAD, NAGPUR 2 DCIT, TDS, CIRCLE - 1, NAGPUR 3 THE CIT (A) , NAGPUR 4 THE DR, ITAT, NAGPUR 5 GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL NAGPUR