ITO, New Delhi V. M/s. Jain Studios Ltd., New Delhi

ITA 4468/DEL/2011

• Counselvise Citation: 446820114 RSA 2011
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 30-07-2012
• Assessment Year: misc
• Appeal Filed On: 05-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Keywords: Additional evidence
• Section: 133A; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI R.K. GUPTA AND SHRI B.C. MEENA ITA NOS. 4468, 4469, 4470, 4471 & 4472/DEL/11 A.YRS. 2001-02, 02-03, 03-04, 04-05 & 2005-06 INCOME-TAX OFFICER, VS. M/S JAIN STUDIOS LTD., WARD 50(2), NEW DELHI. SCINDIA VILLA, SAROJNI NAG AR, NEW DELHI. PAN/ GIR NO. AAACJ2909C ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI D.K. MISHRA CIT (DR) RESPONDENT BY : SHRI KAPIL GOEL CA O R D E R PER R.K. GUPTA, J.M: : THESE APPEALS HAVE BEEN FILED BY THE REVENUE AGAINS T CONSOLIDATED ORDER DATED 14-7-2011 PASSED BY THE CIT(A)-XXX, NE W DELHI FOR F.Y. 2000-01 TO 2004-05 RELEVANT TO ASSESSMENT YEARS 200 1-02 TO 2005-06. ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DIS POSED OF BY A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. COMMON ISSUE INVOLVED IN ALL THESE APPEALS IS AG AINST DELETION OF DEMAND RAISED U/S 201(1)/201(1A) OF THE I.T. ACT BY ACCEPTING ADDITIONAL EVIDENCE IN CONTRAVENTION OF RULE 46A OF THE I.T. R ULES. 3. BRIEF FACTS ARE: SURVEY OPERATION U/S 133A OF TH E I.T. ACT WAS CARRIED ON 19-11-2004 AT THE BUSINESS PREMISES OF THE ASSES SEE COMPANY, SITUATED AT SCINDIA VILLA, SAROJINI NAGAR, NEW DELHI TO VERIFY THE COMPLIANCE TO THE VARIOUS PROVISIONS OF CHAPTER XVII OF THE I.T. ACT, 1961. DURING THE COURSE OF SURVEY OPERATION, STATEMENT OF SHRI RAJEEV AGGAR WAL, MANAGER FINANCE ITA 4468, 4469, 4470, 4471 & 4472/DEL/11 JAIN STUDIOS LTD. 2 WAS RECORDED ON OATH, WHO ADMITTED THAT COMPANY HAD BEEN DEFAULTER IN MAKING PAYMENT OF TDS INTO GOVT. ACCOUNT AS WELL AS FOR ISSUING PRESCRIBED CERTIFICATES IN FORM NO. 16 AND 16A TO THE RESPECT IVE PERSONS OF THE COMPANY. DETAIL OF THOSE PERSONS ON WHOSE ACCOUNT T DS WAS NOT DEDUCTED, WAS ALSO PREPARED BY THE SURVEY PARTY. THEREAFTER, SHOW CAUSE NOTICE WAS GIVEN FOR VERIFYING THE COMPLETE DETAILS. DURING TH E COURSE OF PROCEEDINGS IT WAS VERIFIED THAT IN CASES OF SOME ARTIES, THE ASSE SSEE HAD DEDUCTED TAX AND ACCORDINGLY CREDITED WAS GIVEN. HOWEVER, IT WAS FOU ND THAT IN SOME OTHER CASES THOUGH TDS HAD BEEN DEDUCTED BUT WAS NOT DEP OSITED INTO THE GOVT. ACCOUNT. DETAIL OF THE FINANCIAL YEARS INVOLVED WER E PREPARED AND THEREAFTER ASSESSING OFFICER DREW A CONCLUSION THAT ASSESSEE WAS LIABLE TO DEDUCT TDS WHICH HE FAILED TO DO SO, THEREFORE, HE PASSED ORDE R U/S 201(1)/ 201(1A) OF THE ACT, CREATING HUGE DEMAND AGAINST THE ASSESSEE. 4. ASSESSEE PREFERRED APPEALS BEFORE CIT(A) BEFORE WHOM DETAILED SUBMISSIONS WERE FILED BY THE LD. A.R. OF THE ASSES SEE WHICH ARE INCORPORATED AT PAGES 2 TO 6 IN THE ORDER OF CIT(A ). FIRSTLY, IT WAS ARGUED THAT THE PROCEEDINGS INITIATED U/S 201 WERE TIME BA RRED. IT WAS FURTHER SUBMITTED THAT AMENDMENT MADE BY THE FINANCE ACT (N O.2) W.E.F. 1-4-2010 U/S 201(3) IS NOT APPLICABLE TO THE PRESENT CASE AS THESE CASES RELATED TO EARLIER PERIOD. IT WAS FURTHER SUBMITTED THAT THERE ARE MORE THAN ONE METHOD/ BASIS THAT ARE AVAILABLE AS ADMITTED BY ASSESSING O FFICER TDS TO COMPUTE THE ASSESSEES TAX LIABILITY. THEREFORE, THE BASIS WHICH HAS BEEN ADOPTED BY THE ASSESSEE SHOULD BE ACCEPTED IN VIEW OF THE DECI SION OF THE HONBLE SUPREME COURT IN THE CASE OF VEGETABLE INDIA PRODUC TS 88 ITR 192. FURTHER RELIANCE WAS PLACED ON FEW CASES. 5. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD, CIT(A) HELD THAT ASSESSEE HAS COMMITTED DE FAULT FOR NOT DEDUCTING ITA 4468, 4469, 4470, 4471 & 4472/DEL/11 JAIN STUDIOS LTD. 3 TAX, THEREFORE, ORDER PASSED U/S 201(1)/ 201(1A) CA NNOT BE HELD AS ERRONEOUS. HOWEVER, LD. CIT(A) HELD THAT WHAT-EVER DETAILS WE RE PREPARED BY THE SURVEY PARTY THAT SHOULD HAVE BEEN ACCEPTED FOR THE REASON THAT BOOKS OF ACCOUNT WERE NOT AVAILABLE AS THEY WERE DESTROYED A ND THEREFORE THE MATERIAL AVAILABLE WITH THE ASSESSING OFFICER TO COMPUTE TH E LIABILITY U/S 201(1)/201(1A) WAS SURVEY REPORT AND THEREFORE THE SAME SHOULD HAVE BEEN TAKEN INTO CONSIDERATION. ACCORDINGLY, THE ASSESSIN G OFFICER WAS DIRECTED TO RECOMPUTED THE LIABILITY AFTER AFFORDING OPPORTUNIT Y TO THE ASSESSEE. WHILE HOLDING SO, RELIANCE WAS PLACED ON THE DECISION OF ITAT DATED 30-12-2010 RENDERED IN ITA NO. 4604/DEL/2010 IN THE CASE OF M UZAFFARNAGAR DISTT. CO- OP. BANK LTD. AGAINST THOSE DIRECTIONS, THE DEPARTM ENT IS IN APPEAL BEFORE US. 6. LD. DR SUPPORTED THE ORDER OF ASSESSING OFFICER . 7. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSES SEE SUPPORTED THE ORDER OF LD. CIT(A). LD. COUNSEL ALSO TRIED TO RAI SE THE GROUNDS WHICH WERE NOT DECIDED BY CIT(A) I.E. ORDER PASSED U/S 201(1) / 201(1A) ARE TIME BARRED. HOWEVER, NEITHER ANY APPEAL NOR ANY CROSS-O BJECTION HAS BEEN FILED BY THE ASSESSEE, THEREFORE, THESE LEGAL GROUNDS CA NNOT BE ENTERTAINED AND THE CONTENTION OF THE LD. AR ON LEGAL ISSUE WAS REJECTE D IN THE OPEN COURT ITSELF. 8. AFTER CONSIDERING THE ORDER OF ASSESSING OFFICER AND CIT(A) WE FIND NO INFIRMITY IN THE FINDING OF CIT(A) WHICH REMAIN ED UNCONTROVERTED ALSO. THE FINDING OF THE CIT(A) HAS BEEN RECORDED IN PAR AS 6 TO 8 OF WHICH ORDER, WHICH ARE AS UNDER: 6. I HAVE EXAMINED LD. ARS ARGUMENT ON MERITS ONL Y AND FIND FORCE IN THE SAME AS ADMITTED LD. AO HAS STATE D IN IMPUGNED ORDER THAT THERE ARE THREE POSSIBLE BASIS TO COMPUTE TDS LIABILITY U/S 201(1) OF ASSESSEE VIZ. A) SURVEY REPORT (RS. 30,60,107) B) TAX AUDIT REPORT (RS. 37,97,586) AND C) ANNUAL ITA 4468, 4469, 4470, 4471 & 4472/DEL/11 JAIN STUDIOS LTD. 4 ACCOUNTS (AS PER LD. AO RS. 507.43 LACS). IN THIS C ONNECTION, LD. AO HAS INFERRED THAT SINCE THERE IS DISCREPANCY IN SAID THREE FIGURES, ONE WHICH IS HIGHEST IS TAKEN BY HIM TO PR OTECT REVENUE INTERESTS. TO THIS IT IS VEHEMENT CONTENTION OF LD. AR BEFORE ME THAT BASIS TO COMPUTE TDS LIABILITY IN PRESENT FACT S SHOULD BE SURVEY REPORT AMOUNT WHICH IS BASED ON ON-SPOT VERI FICATION BEING MINIMAL ALSO, AS IN CASE OF AMBIGUITY THE VIE W FAVOURING TO ASSESSEE SHOULD BE TAKEN. 7. AFTER EVALUATING LD. AO S VIEWS IN LIGHT OF LD ARS ARGUMENTS, I AM OF THE CONSIDERED VIEW THAT BEST BA SIS FOR COMPUTING TDS LIABILITY IN PRESENT FACTS WOULD BE T HE SURVEY REPORT FIGURE WHICH IS BASED ON ON-SPOT VERIFICATIO N, BEING SUPPLEMENTED BY CARDINAL PRINCIPLE OF TAXATION THAT IN CASE OF AMBIGUITY (LIKE PRESENT CASE), BENEFIT OF DOUBT MUS T GO TO THE ASSESSEE (TAX PAYER) AS HIGHLIGHTED IN COURT RULING S EXTRACTED ABOVE AND ACCORDINGLY TDS LIABILITY OF ASSESSEE NEE DS TO BE COMPUTED ON BASIS OF SURVEY REPORT FIGURE WHICH IS AVAILABLE AT PAPER BOOK PAGE 27. IN THIS CONNECTION, I AM SUPPOR TED BY LD. AO S FINDING THAT BOOKS OF ACCOUNTS FOR SUBJECT PE RIOD IS NOT AVAILABLE BEING DESTROYED IN AN ACCIDENT. FURTHER, LD. AO HAS NOT APPRECIATED THE FACT THAT FIGURE OF ANNUAL ACCO UNTS TAKEN BY HIM IS BASED ON COUNTING THE SAME FIGURE MANY TIMES ALONG WITH INITIAL AMOUNT AS ON 31/3/2002 BEING CUMULATIV E. 8. IT IS CASE OF ASSESSEE BEFORE ME THAT TAKING SAI D SURVEY REPORT FIGURE AS BASIS, TDS LIABILITY REMAINING WOU LD BE RS. 7,00,666 (U/S 201(1) AND INTEREST RS. 15,02,568 (U/ S 201(1A) AS ON 04/03/2011 VIDE ORDER SHEET ENTRY DATED 28/6/ 2011 (CHART AVAILABLE AT ASSESSEES PAPER BOOK PAGES 248 TO 272 ), TO LIMITEDLY VERIFY THE SAID WORKING ONLY, LD. AO IS DIRECTED TO RE-COMPUTE THE TDS LIABILITY. 9. THEREAFTER, LD. CIT(A), AS STATED ABOVE, PLACED RELIANCE ON THE ORDER OF THE ITAT IN THE CASE OF MUZAFFARNAGAR DISTT. CO- OP. BANK LTD. (SUPRA). ACCORDINGLY, MATER WAS SET ASIDE TO THE FILE OF ASS ESSING OFFICER TO RECALCULATE THE LIABILITY AFTER GIVING OPPORTUNITY TO THE ASSESSEE TO PRODUCE ITA 4468, 4469, 4470, 4471 & 4472/DEL/11 JAIN STUDIOS LTD. 5 PAPER BOOK/ ALL OTHER EVIDENCES FOR VERIFICATION. T HIS FINDING OF CIT(A) REMAINED UNCONTROVERTED AS NOTHING HAS BEEN BROUGHT ON RECORD CONTRARY TO THIS FINDING. THEREFORE, WE HAVE NO HESITATION IN C ONFIRMING THESE FINDINGS OF CIT(A). ACCORDINGLY, WE CONFIRM THE SAME. 10. IN THE RESULT, APPEAL OF THE DEPARTMENT ARE DIS MISSED. ORDER PRONOUNCED IN OPEN COURT ON 03-08-2012. SD/- SD/- ( B.C. MEENA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 03-08-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR