DCIT, New Delhi V. M/s Howe India Pvt. Ltd., New Delhi

ITA 4569/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3317 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 10-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADAM SINGH SENIOR
• Assessee Lawyers: PUNEET KESWANI CAS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.4569/DEL./2015 (ASSESSMENT YEAR : 2011-12) DCIT, CIRCLE 11 (1), VS. M/S. HOWE INDIA PVT. LTD., NEW DELHI. 81, NEHRU PLACE, NEW DELHI 110 019. (PAN : AAACH1223K) (APPELLANT) (RESPONDENT) ASSESSEE BY : S/SHRI AMIT SHARMA AND PUNEET KESWANI, CAS REVENUE BY : SHRI PADAM SINGH, SENIOR DR DATE OF HEARING : 26.02.2018 DATE OF ORDER : 08.03.2018 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, DEPUTY COMMISSIONER OF INCOME-TAX, C IRCLE 11 (1), NEW DELHI (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 30.04.2015 PASSED BY LD. CIT(APPEALS)-4, NEW DELHI QUA THE ASSESSMENT YEAR 2011-12 ON THE GROUNDS INTER AL IA THAT :- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE & IN LAW, THE LD. CIT (A) ERRED IN APPRECIATORY THE DETAILED ITA NO.4569/DEL./2015 2 FACTUAL FINDING MADE BY THE AO THAT THE OWNERSHIP O F THE PROPERTY WAS IN THE NAME OF LALIT BATRA ONLY. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE & IN LAW, THE LD. CIT (A) ERRED IN DELETING THE ADD ITIONS MADE BY THE AO ON ACCOUNT OF TDS DEDUCTION WITHOUT TAKING INTO ACCOUNT THE PROVISION OF THE SECTION 19 9 OF THE ACT. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND ARE : ASSESSING OFFICER MADE AD DITION OF RS.3,00,000/- ON ACCOUNT OF DISALLOWANCE OF RENT EX PENSES ON THE GROUND THAT ASSESSEE IN COLLUSION WITH OWNER OF THE TENANTED PROPERTY IN QUESTION ENTERED INTO A RENT AGREEMENT IN VIOLATION OF TAX DEDUCTED AT SOURCE (TDS) PROVISIONS IN ORDER TO HELP OUT SHRI LALIT BATRA NOT TO PAY GENUINE TAXES ON INDIVIDUAL INCOME BECAUSE ASSESSEE COMPANY CLAIMED RENTAL EXPENSES OF RS.1,56 ,000/- IN THE NAME OF SMT. RANI BATRA AND RS.1,44,000/- IN THE NA ME OF SHRI LALIT BATRA, WITHOUT DEDUCTING ANY TDS ON THE RENTA L EXPENSES AS PER PROVISIONS CONTAINED U/S 194 OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT). AO ALSO MADE ADDITION OF RS.33,0 2,305/- ON THE GROUND THAT THE ASSESSEE COMPANY HAS DISCLOSED RECE IPT OF RS.10,34,50,628/- BUT HAS CLAIMED TDS ON THE RECEIP T OF RS.10,67,52,933/- AND THEREBY DISCLOSED THE RECEIPT LESS BY RS.33,02,305/-. ITA NO.4569/DEL./2015 3 3. ASSESSEE CARRIED THE MATTER BY WAY OF FILING APP EAL BEFORE THE LD. CIT (A) WHO HAS DELETED THE ADDITIONS MADE BY THE AO BY ALLOWING THE APPEAL. FEELING AGGRIEVED, THE REVENU E HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT AP PEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. SO FAR AS DELETION OF ADDITION OF RS.3,00,000/- UNDER SECTION 40(A)(IA) OF THE ACT BY LD. CIT (A) IS CONCERNED, U NDISPUTEDLY LALIT BATRA IS OWNER OF THE PROPERTY IN QUESTION FOR WHIC H HE HAS CLAIMED RENTAL OF RS.1,44,000/-. ASSESSEE COMPANY HAS ALSO CLAIMED RENTAL OF RS.1,56,000/- PAID TO RANI BATRA, WIFE OF LALIT BATRA ON ACCOUNT OF RENTAL FOR FURNITURE. 6. THE LD. AR FOR THE ASSESSEE COMPANY CONTENDED TH AT SINCE THE RENT IN THIS CASE HAS NOT EXCEEDED RS.15,000/- PER MONTH W.E.F. 01.07.2010, NO TDS IS REQUIRED TO BE DEDUCTED AND A LSO BROUGHT ON RECORD AMENDMENT MADE BY FINANCE ACT, 2010. 7. IT IS ALSO NOT IN DISPUTE THAT AS PER AMENDED PR OVISIONS EFFECTIVE FROM 01.07.2010 APPLICABLE TO THE YEAR UN DER ASSESSMENT, THE ASSESSEE IS NOT REQUIRED TO DEDUCT TDS IF THE T OTAL PAYMENT DURING THE FINANCIAL YEAR IS BELOW RS.1,80,000/-. IT IS FURTHER ITA NO.4569/DEL./2015 4 PROVIDED BY THE AMENDED PROVISION THAT IN CASE TAX HAS BEEN DEDUCTED AT HIGHER RATE DURING THE PERIOD 01.04.201 0 TO 30.06.2010, THE ASSESSEE COMPANY IS NOT REQUIRED TO DEDUCT TAX FROM THE SUBSEQUENT MONTHS IF THE TOTAL PAYMENT DOES NOT EXC EED RS.1,80,000/- PER ANNUM. AO HAS MERELY MADE ADDITI ON ON THE BASIS OF SURMISES THAT THE RENT AGREEMENT HAS BEEN PREPARED IN COLLUSION BY THE ASSESSEE TO EVADE THE TAX AS THERE IS NOT AN IOTA OF EVIDENCE ON RECORD IF ANY SUCH COLLUSION WAS THERE. IT IS NOT UNUSUAL THAT HUSBAND BEING OWNER OF THE PROPERTY RE NTED OUT OF THE SAME AND WIFE BEING OWNER OF THE FURNITURE RENTED O UT THE SAME BY TWO DIFFERENT AGREEMENTS PARTICULARLY WHEN RENTING OUT OF PROPERTY AND FURNITURE IS NOT IN DISPUTE. SO, WE ARE OF THE CONSIDERED VIEW THAT LD. CIT (A) HAS RIGHTLY DELETED THE ADDITION O F RS.3,00,000/- MADE BY THE AO. 8. SO FAR AS DELETION OF ADDITION OF RS.33,02,305/- IS CONCERNED, IT IS THE CASE OF THE ASSESSEE THAT THE AO MADE THE ADDITION BY POINTING OUT THE DIFFERENCE OF RECEIPTS AS CREDIT I N PROFIT & LOSS ACCOUNT WHICH IS RS.10,34,50,628/- AND AMOUNT SHOWN IN THE TAX CREDIT STATEMENT (26AS) WHICH IS AT RS.10,67,52,933 /-. ASSESSEE HAS DULY FURNISHED THE RECONCILIATION WHICH HAS NOT BEEN SCRUTINIZED BY THE AO. ITA NO.4569/DEL./2015 5 9. HOWEVER, THE LD. CIT (A) ON THE BASIS OF RECONCI LIATION HAS RECOGNIZED POLICY OF THE COMPANY AND DELETED THE AD DITION BY HOLDING THAT THE AO HAS DECIDED THE ISSUE ON THE BA SIS OF SURMISES WITHOUT APPRECIATING THE ACCOUNTING PRACTICE BEING FOLLOWED BY THE ASSESSEE. WHEN THE ASSESSEE HAS DULY EXPLAINED THA T AS PER 26AS STATEMENT IT HAS DEDUCTED TDS AT RS.1,09,12,203/- B UT HAS CLAIMED THE TDS OF RS.1,07,57,783/- IN ITS RETURN OF INCOME AND HAS NOT CLAIMED THE DIFFERENCE OF RS.1,54,420/- BEING NOT D EPOSITED BY ONE PARTY, NAMELY, M/S. DIGHI POR LTD.. 10. WHEN THE ASSESSEE HAS DEDUCTED TDS AND RECORDED ITS ENTRY, THE ISSUE REMAINS WITH AO WAS OF YEAR ONLY AS TO IN WHICH YEAR THE RECEIPT IS TO BE INCLUDED, WHICH HAS BEEN DULY EXPL AINED AS PER 26AS STATEMENT. SO, WE ARE OF THE CONSIDERED VIEW THAT LD. CIT (A) HAS RIGHTLY DELETED THE ADDITION. 11. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE FI ND NO ILLEGALITY OR PERVERSITY IN THE FINDINGS RETURNED B Y THE LD. CIT (A), HENCE THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 8 TH DAY OF MARCH, 2018. SD/- SD/- (B.P. JAIN) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 8 TH DAY OF MARCH, 2018 TS ITA NO.4569/DEL./2015 6 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-IV, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.