R.F. PROPERTIES PVT. LTD., Jaipur V. ACIT, Jaipur

ITA 483/JPR/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2033 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 15-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROSHANTA MEENA CIT DHK
• Assessee Lawyers: ASHISH SHARMA S; RAJIVE SAHAI
• Keywords: Recovery proceedings; Non-deduction of tax
• Section: 194C; 201(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 483/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11. M/S R.F. PROPERTIES PVT. LTD., (NOW KNOWN AS WORLD TRADE PARK LTD), JAIPUR. CUKE VS. THE ACIT (TDS), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. JPRR 04161 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 565/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11. THE ACIT (TDS), JAIPUR. CUKE VS. M/S R.F. PROPERTIES PVT. LTD., (NOW KNOWN AS WORLD TRADE PARK LTD), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. JPRR 04161 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 445/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14. THE ACIT (TDS), JAIPUR. CUKE VS. M/S R.F. PROPERTIES PVT. LTD., (NOW KNOWN AS WORLD TRADE PARK LTD), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. JPRR 04161 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJIVE SAHAI & SHRI ASHISH SHARMA (ADVOCATES) JKTLO DH VKSJ LS@ REVENUE BY : SMT. ROSHANTA MEENA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 07.06.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 29/ 06/2017. VKNS'K@ ORDER 2 ITA NOS. 483, 565 & 445/JP/2015 M/S R.F. PROPERTIES PVT. LTD. (NOW KNOWN AS WORLD TRADE PARK LTD), JAIPUR. PER SHRI KUL BHARAT, JM. THESE THREE APPEALS ONE BY THE ASSESSEE AND TWO BY THE REVENUE PERTAINING TO THE DIFFERENT AY I.E. 2010-11 AND 2013-14 ARE DI RECTED AGAINST THE DIFFERENT ORDER OF THE LD. CIT(A)-3, JAIPUR, DATED 23.03.2015 AND 2 7.02.2015 RESPECTIVELY. 2. AT THE TIME OF HEARING, THE RESPECTIVE REPRESEN TATIVES OF THE PARTIES SUBMITTED THAT THE COMMON ISSUES ARE INVOLVED IN TH ESE APPEALS, RELATED TO LIABILITY OF TAX-DEDUCTION AT SOURCE. THEREFORE, IT WAS SUBM ITTED THAT THE REVENUES APPEAL IN ITA NO. 445/JP/2015 PERTAINING TO THE ASSESSMENT YEAR 2013-14 MAY BE TAKEN UP FIRST. ITA NO. 445/JP/2015. 3. FIRST WE TAKE UP THE REVENUES APPEAL IN ITA NO. 445/JP/2015 PERTAINING TO THE AY 2013-14. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- 1. THE LD. CIT(A) HAS ERRED ON FACTS IN STATING IN PARA 6.1 OF HIS ORDER THAT THAT AO HAS NOTED THAT TDS WAS NOT DEDUCTED U NDER VARIOUS HEADS AND ACCORDINGLY DEMAND U/S 201(1) AND 201(1A) WAS RAISED AS UNDER..; THOUGH IN THE ORDER U/S 201(1) PASSED BY AO, NO SUCH FINDINGS WERE MADE AND IN THE DEMAND WAS RAISED ON THE GROUND THAT THE ASSESSEE HAS NOT DEPOSITED THE TAX DEDUCTED BY IT, A REFLECTED NOT ONLY IN HIS BOOKS OF ACCOUNTS BUT ALSO AFFIRMED IN STATEMENTS OF THE MANAGING DIRECTOR OF THE COMPANY DURING SURVEY AND ALSO IN THE AUDITED BALANCE SHEET AND THUS THE FINDINGS OF LD. CIT(A) ARE BASED ON INCORRECT FACTS. 2. THE LD. CIT(A) HAS ERRED IN FACTS AND IN LAW IN APPLYING THE RATION OF HONBLE SUPREME COURTS DECISION OF M/S HINDUSTAN C OCA COLA, WHICH IS APPLICABLE ONLY IN THE CASES INVOLVING NON DEDUCTIO N OF TDS WHEREAS IN THIS CASE THE TDS WAS ALREADY DEDUCTED BY THE ASSES SEE WAS NOT DEPOSITED IN THE GOVERNMENTS ACCOUNT. THUS THE AS SESSEE CANNOT BE 3 ITA NOS. 483, 565 & 445/JP/2015 M/S R.F. PROPERTIES PVT. LTD. (NOW KNOWN AS WORLD TRADE PARK LTD), JAIPUR. ALLOWED TO TAKE RELIEF UNDER PROVISION TO S. 201(1) OF THE INCOME TAX ACT. 3. THE LD. CIT(A) HAS ALSO ERRED IN FACTS AND IN LA W RELYING UPON THE CERTIFICATE OF ACCOUNTANT UNDER PROVISO TO SUB SECT ION (1) OF SECTION 201(1) OF THE INCOME TAX ACT, THOUGH THIS PROVISION ALSO APPLIED TO THE CASES INVOLVING NON DEDUCTION OF TDS ONLY AND NOT O N CASES INVOLVING TDS DEDUCTED BUT NOT DEPOSITED BY THE ASSESSEE. 4. BRIEFLY STATED THE FACTS ARE THAT THE SURVEY ACT ION WAS CARRIED ON THE OFFICE PREMISES ON 31/10/2013 DURING THE SURVEY PROCEEDING S. A TDS VERIFICATION WAS CARRIED OUT AND IT WAS FOUND, THAT THE ASSESSEE HAD BEEN DEDUCTING TDS BUT DID NOT DEPOSIT IN THE GOVERNMENT ACCOUNT FOR SEVERAL YEARS . A DETAILED SHOW CAUSE NOTICE PERTAINING TO THE FINANCIAL YEAR 2010-11, 2011-12, AND 2012-13 WAS ISSUED AND AFTER CONSIDERING THE SUBMISSIONS, THE AO DECLARED THE ASSESSEE IN DEFAULT FOR NOT DEPOSITING THE TAX DEDUCTED INTO THE GOVERNMENT ACC OUNT. THEREFORE, IN RESPECT OF THE FINANCIAL YEAR 2012-13 A DEMAND OF RS. 2,25,82, 380/- WAS RAISED ON ACCOUNT OF NON-DEDUCTION OF TAX AND INTEREST THEREON OF RS. 60 60841/-. 5. AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS PARTLY ALLOWED THE APPE AL AND DELETED RS. 1,98,06,433/- AND CONFIRMED THE DEMAND OF RS. 27,75,947/. HOWEVE R, IN RESPECT OF THE INTEREST U/S 201(1A) OF THE ACT HE DIRECTED THE AO TO CHARGE INTEREST FROM THE DATE OF DEDUCTIBILITY OF TDS TILL THE DATE OF PAYMENT OF TA X BY THE DEDUCTEE. LD. D/R VEHEMENTLY ARGUED THAT LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE DEMAND. HE SUBMITTED THAT LD. CIT(A)HAS RELIED UPON THE JUDGME NT OF THE HONBLE SUPREME COURT RENDERED IN THE CASE OF HINDUSTAN COCA-COLA B EVERAGE PVT. LTD. VS. CIT 293 ITR 226(SC). HE SUBMITTED THAT RATIO OF THE HONBL E SUPREME COURT IS NOT APPLICABLE 4 ITA NOS. 483, 565 & 445/JP/2015 M/S R.F. PROPERTIES PVT. LTD. (NOW KNOWN AS WORLD TRADE PARK LTD), JAIPUR. ON THE FACTS OF THE PRESENT CASE. HE SUBMITTED THAT THE RATIO IS APPLICABLE WHERE THE ASSESSEE HAS NOT DEDUCTED TAX AT ALL. BUT IN THE P RESENT CASE THE ASSESSEE HAD DEDUCTED OR AFTER DEDUCTING THE TAX FAILED TO DEPOS IT THE SAME AS PER THE PROVISION OF LAW. THEREFORE, HE IS LIABLE TO BE DEEMED TO BE ASSESSEE IN DEFAULT. 5.1 ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE R EITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. HE SUBMITTED THAT THE TOTAL DEMAND OF RS. 28643221/- WAS RAISED INCLUDING THE AMOUNT OF RS. 1 9806433/- U/S 201 (1A) OF THE ACT AND INTEREST OF RS. 54,59,620/- THEREON. HE SU BMITTED THAT LD. CIT(A) OBSERVED THAT IN RESPECT OF AMOUNT PAID TO M/S DEEWAN HOUSIN G FINANCE LTD. THE PAYEE HAS INCLUDED IN HIS BOOKS OF ACCOUNTS, ON THIS RECEIPTS AND ALSO PAID DUE TAX ON IT. THIS FACT IS VERIFIED BY THE AO ALSO IN HIS REMAND REPOR T THE LD. COUNSEL PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF M/S HINDUSTAN COCA- COLA BEVERAGE PVT. LTD. (SUPRA). HE ALSO PLACED RE LIANCE ON THE CBDT CIRCULAR, THEREFORE, HE SUPPORTED THE ORDER OF THE LD. CIT(A) . 5.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD, THERE IS NO DISPUTE WITH REGARD TO THE FACT , THAT STATEMENT RECORDED IN THE SURVEY PROCEEDINGS, THE MANAGING DIRECTOR OF THE AS SESSEE COMPANY ADMITTED THE FACT THAT, AMOUNT WERE DEDUCTED BUT COULD NOT BE DE POSITED INTO THE GOVERNMENT ACCOUNT, ON ACCOUNT OF FINANCIAL CRISIS OF THE COMP ANY. HOWEVER, IT WAS STATED THAT THE DEDUCTEE HAD ALREADY DISCLOSED THE RECEIPTS IN THEIR RESPECTIVE RETURNS AND PAID TO DUE TAX THEREON. NOW, THE ISSUE REQUIRED TO BE ADJUDICATED IS WHETHER THE LD. CIT(A) HAS RIGHTLY APPLIED THE RATIO OF THE HONBLE SUPREME COURT RENDERED IN THE CASE OF HINDUSTAN COCA-COLA PVT. LTD BEVERAGE VS. C IT 293 ITR 226. FOR THE SAKE OF 5 ITA NOS. 483, 565 & 445/JP/2015 M/S R.F. PROPERTIES PVT. LTD. (NOW KNOWN AS WORLD TRADE PARK LTD), JAIPUR. CLARITY IT WOULD BE THE RELEVANT THAT THE PROVISION S OF ACT, I.E. SECTION 201 IS REPRODUCED HEREIN FOR THE SAKE OF CLARITY, SECTION 201 OF THE ACT SPEAKS AS UNDER:- 201. CONSEQUENCES OF FAILURE TO DEDUCT OR PAY [(1) WHERE ANY PERSON, INCLUDING THE PRINCIPAL OFFI CER OF A COMPANY- (A) WHO IS REQUIRED TO DEDUCT ANY SUM IN ACCORDANCE WITH PROVISIONS TO THIS ACT; OR (B) REFERRED TO IN SUB-SECTION (1A) OF SECTION 192, BEING AN EMPLOYER, DOES NOT DEDUCT, OR DOES NOT PAY, OR AFTER SO DEDUC TING FAILS TO PAY, THE WHOLE, OR ANY PART OF THE TAX, AS REQUIRED BY O R UNDER THIS ACT, THEN, SUCH PERSON, SHALL, WITHOUT PREJUDICE TO ANY OTHER CONSEQUENCES WHICH HE MAY INCUR, BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX: [PROVIDED THAT ANY PERSON, INCLUDING THE PRINCIPAL OFFICER OF A COMPANY, WHO FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TA X IN ACCORDANCE WITH THE PROVISIONS OF THIS CHAPTER ON THE SUM PAID TO A RESIDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF A RESIDENT SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX IF SUCH RESIDENT- (I) HAS FURNISHED HIS RETURN OF INCOME UNDER SECTIO N 139; (II) HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING INCOME IN SUCH RETURN OF INCOME; AND (III) HAS PAID THE TAX DUE ON THE INCOME DECLARED B Y HIM IN SUCH RETURN OF INCOME, AND THE PERSON FURNISHES A CERTIFICATE TO THIS EFFE CT FROM AN ACCOUNTANT IN SUCH FORM AS MAY BE PRESCRIBED:] PROVIDED [FURTHER] THAT NO PENALTY SHALL BE CHARGED UNDER SECTION 221 FROM SUCH PERSON, UNLESS THE ASSESSING OFFICER IS S ATISFIED THAT SUCH PERSON, WITHOUT GOOD AND SUFFICIENT REASONS, HAS FA ILED TO DEDUCT AND PAY SUCH TAX.] [(A) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SEC TION (1), IF ANY SUCH PERSON, PRINCIPAL OFFICER OR COMPANY AS IS REFERRED TO IN THAT SUB- SECTION DOES NOT DEDUCT THE WHOLE OR ANY PART OF TH E TAX OR AFTER DEDUCTING FAILS TO PAY THE TAX AS REQUIRED BY OR UN DER THIS ACT, HE OR IT SHALL BE LIABLE TO PAY SIMPLE INTEREST,- 6 ITA NOS. 483, 565 & 445/JP/2015 M/S R.F. PROPERTIES PVT. LTD. (NOW KNOWN AS WORLD TRADE PARK LTD), JAIPUR. (I) AT ONE PER CENT FOR EVERY MONTH OR PART OF A MO NTH ON THE AMOUNT OF SUCH TAX FROM THE DATE ON WHICH SUCH TAX WAS DED UCTIBLE TO THE DATE ON WHICH SUCH TAX IS DEDUCTED; AND (II) AT ONE AND ONE-HALF PER CENT FOR EVERY MONTH O R PART OF A MONTH ON THE AMOUNT OF SUCH TAX FROM THE DATE ON WHICH SUCH TAX WAS DEDUCTED TO THE DATE ON WHICH SUCH TAX IS ACTUALLY PAID, AND SUCH INTEREST SHALL BE PAID BEFORE FURNISHING T HE STATEMENT IN ACCORDANCE WITH PROVISIONS OF SUB-SECTION (3) OF SE CTION 200:] [PROVIDED THAT IN CASE ANY PERSON, INCLUDING THE P RINCIPAL OFFICER OF A COMPANY FAILS TO DEDUCT THE WHOLE OR ANY PART OF TH E TAX IN ACCORDANCE WITH THE PROVISIONS OF THIS CHAPTER ON THE SUM PAID TO A RESIDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF A RESIDENT BUT I S NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER THE FIRST PROVISO OF S UB-SECTION (1), THE INTEREST UNDER CLAUSE (I) SHALL BE PAYABLE FROM THE DATE ON WHICH SUCH TAX WAS DEDUCTIBLE TO THE DATE OF FURNISHING OF RET URN OF INCOME BY SUCH RESIDENT.] 5.3 AS PER THE ABOVE PROVISIONS IN CASE ANY PERSON WHO IS REQUIRED TO DEDUCT ANY SUM IN ACCORDANCE WITH THE PROVISION OF THE INCOME TAX ACT, DOES NOT DEDUCT, OR DOES NOT PAY, OR AFTER DEDUCTING FAILS TO PAY, THE WHOLE OR ANY PART OF THE TAX, AS REQUIRED BY OR UNDER THE ACT. THEN SUCH PERSON SHA LL WITHOUT PREJUDICE TO ANY OTHER CONSEQUENCES WHICH HE MAY INCUR DEEM TO BE ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX. THEREFORE, THERE IS NO AMBIGUITY SO FAR THE P ROVISION OF LAW IS CONCERNED. ADMITTEDLY, THIS PROVISION RELATE TO THE PERSON WHO IS LIABLE TO DEDUCT THE TAX AS PER THE PROVISION OF THE ACT. THE CONSEQUENCES OF NON- DEDUCTION, NON-PAYMENT OR AFTER DEDUCTING FAILURE TO PAY THE WHOLE OR PART OF THE T AX LEADS TO SUCH PERSON TO BE DEEM TO BE ASSESEE IN DEFAULT IN RESPECT OF SUCH TA X. IN THE PRESENT CASE, ADMITTEDLY, THE ASSESSEE HAS IN SOME CASES AFTER DE DUCTING THE TAX HAD NOT PAID SUCH TAX TO THE GOVERNMENT BY DEPOSITING THE SAME I N THE ACCOUNT OF THE 7 ITA NOS. 483, 565 & 445/JP/2015 M/S R.F. PROPERTIES PVT. LTD. (NOW KNOWN AS WORLD TRADE PARK LTD), JAIPUR. GOVERNMENT. THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES (P) LTD. VS. CIT (2007) 293 ITR 226 (SC) HAS HELD AS UNDER:- 10. BE THAT AS IT MAY, CIRCULAR NO. 275/201/95-IT (B) DATED JANUARY 29, 1997, ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, IN OUR CONSIDERED OPINION, SHOULD PUT AN END TO THE CONTROVERSY. THE CIRCULAR DECLARES 'NO DEMAND VISUALIZED UNDER SECTION 201 (1) OF THE INCOME-TAX ACT SHOULD BE ENFORCED AFTER THE TAX DEDUCTOR HAS SATISFIED THE OFFICER-IN -CHARGE OF TDS, THAT TAXES DUE HAVE BEEN PAID BY THE DEDUCTEE-ASSESSEE. HOWEV ER, THIS WILL NOT ALTER THE LIABILITY TO THE CHARGE INTEREST UNDER SECTION 201 (1A) OF THE ACT TILL THE DATE OF PAYMENT OF TAXES BY THE DEDUCTEE-ASSESSEE O R THE LIABILITY FOR PENALTY UNDER SECTION 271C OF THE INCOME-TAX ACT'. 11. IN THE INSTANT CASE, THE APPELLANT HAD PAID THE INTEREST UNDER SECTION 201 (1A) OF THE ACT AND THERE IS NO DISPUTE THAT TH E TAX DUE HAD BEEN PAID BY THE DEDUCTEE-ASSESSEE (M/S PRADEEP OIL CORPORATION) . IT IS NOT DISPUTED BEFORE US THAT THE CIRCULAR IS APPLICABLE TO THE FA CTS SITUATION ON HAND. 5.4 BEFORE THE LD. CIT(A), THE CONTENTION OF THE AS SESSEE HAD BEEN THAT DEDUCTEE HAD ALREADY PAID DUE TAX ON SUCH RECEIPTS. THE LD. CIT(A) ACCEPTED THIS CONTENTION OF THE ASSESSEE AND FOLLOWING THE JUDGMENT OF THE H ONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES PVT. LTD. VS . CIT 293 ITR 226 DELETED THE DEMAND OF TAX. THE CONTENTION OF THE REVENUE IS TH AT THE JUDGMENT OF THE HONBLE SUPREME COURT IS NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE, AS IN THIS CASE THE ASSESSEE HAS DEDUCTED TAX BUT DID NOT DEPOSIT SAME. THIS CONTENTION OF THE REVENUE IS EX FACIE INCORRECT AS IN THE CASE OF HINDUSTAN C OCA COLA BEVERAGE PVT. LTD. VS. CIT (SUPRA), THE CONTENTION OF THE ASSESSEE WAS THAT TH E PAYMENT BY THE COMPANY WERE IN NATURE OF THE CONTRACTUAL PAYMENT ON WHICH TAX W AS DEDUCTED U/S 194C OF THE ACT AT 2 PER CENT. HOWEVER, THE AO HELD THAT THE WAREH OUSING CHARGES WERE IN THE NATURE OF RENT AS DEFINED IN EXPLANATION TO SECTION 194-I OF THE ACT. THEREFORE, IT 8 ITA NOS. 483, 565 & 445/JP/2015 M/S R.F. PROPERTIES PVT. LTD. (NOW KNOWN AS WORLD TRADE PARK LTD), JAIPUR. WAS NOT THE CASE WHERE TAX WAS NOT DEDUCTED BUT IT WAS THE CASE WHERE TAX WAS DEDUCTED UNDER A DIFFERENT PROVISION AT A DIFFERENT RATE. NOW, IT IS TO BE EXAMINED IN THE LIGHT OF THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA VS. CIT (SUPRA), WHETHER THE CIRCULAR NO. 275/201/95-IT , DATED 29-1-1997, ISSUED BY CBDT HELPS THE ASSESSEE UNDER THE FACTS O F THE PRESENT CASE. AS PER THIS INSTRUCTION NO DEMAND VISUALIZED UNDER SECTION 201( 1) OF THE INCOME TAX ACT SHOULD BE ENFORCED AFTER THE DEDUCTOR HAS SATISFIED THE OF FICER IN CHARGE OF TDS, THAT THE TAXES HAVE BEEN PAID BY THE DEDUCTEE ASSESSEE. T HEREFORE, SO FAR LIABILITY TOWARDS PAYMENT OF TAX U/S 201(1) OF THE ACT IS CONCERNED, IF THE ASSESSEE DEMONSTRATES THAT THE DUE TAXES HAVE BEEN PAID BY THE DEDUCTEE ASSE SSEE, NO ACTION FOR RECOVERY OF DEMAND CAN BE TAKEN. IN OUR VIEW, THIS INSTRUCTION HAS WIDER AMPLITUDE THAN THE PROVISO TO SECTION 201(1) WHICH CONFINES THE IMMUNI TY FROM RECOVERY OF TAX FROM THE FAILURE THE DEDUCTOR ON FAILURE TO DEDUCT TAX BUT T HE INSTRUCTION NO. 275/205/95- IT(B) COVERS ALL THE SITUATION AS VISUALIZED U/S 2 01(1) OF THE ACT. IN THE PRESENT CASE THE LD. CIT(A) HAS DELETED THE DISALLOWANCE ON THE GROUND THAT THE DEDUCTEE ASSESSEE HAS DECLARED THE RECEIPTS INTO THEIR RESPE CTIVE RETURNS AND DUE TAXES HAVE BEEN PAID. WE ARE OF THE VIEW, THAT AS PER THE INSTRUCTION NO. 275/205/95 (SUPRA) READ WITH SECTION 201(1), THE ASSESSEE IS REQUIRED TO FURNISH THE REQUISITE CERTIFICATE CERTIFYING THAT THE DEDUCTEE ASSESSEE HAS TAKEN INTO THE INC OME TAX RETURN THE RECEIPTS AND PAID DUE TAXES THEREON. IN THE ABSENCE OF SUCH CER TIFICATE THE LD. CIT(A) SHOULD NOT HAVE DELETED THE DISALLOWANCE. THEREFORE, WE SET A SIDE THE ORDER OF THE LD. CIT(A) FOR LIMITED PURPOSE FOR VERIFYING THAT THE DEDUCTEE HAS TAKEN INTO ACCOUNT, THE 9 ITA NOS. 483, 565 & 445/JP/2015 M/S R.F. PROPERTIES PVT. LTD. (NOW KNOWN AS WORLD TRADE PARK LTD), JAIPUR. RECEIPTS PERTAINING TO THE ASSESSEE AND PAID DUE TA X THEREON. THIS GROUND OF THE REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE S. ITA NO. 565/JP/2015. 6. NOW, WE TAKE UP REVENUES APPEAL I.E. ITA NO. 565/JP/2015 PERTAINING TO THE AY 2010-11. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EALS:- 1. WHETHER ON FACTS AND IN LAW THE LD. CIT(A) JUST IFIED IN HOLDING ASSESSEE DEFAULT FOR FAILURE TO DEDUCT THE TAXES AN D APPLY THE RATIO OF HONBLE SUPREME COURT DECISION OF M/S HINDUSTAN COC A COLA BEVERAGE LTD. WHERE AS IN THIS CASE, THE TDS WAS ALREADY DED UCTED BUT NOT DEPOSITED THE TAX IN TO GOVT. ACCOUNT. HENCE, THE LD. CIT(A) ERRED IN DELETING THE DEMAND ON DIFFERENT FACTS. 7. THE PARTIES HAVE ADOPTED THE SAME ARGUMENTS AS W ERE ADOPTED IN ITA NO. 445/JP/2015 PERTAINING TO AY 2013-14. FOR THE SAME REASONING, THIS GROUND OF THE REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE . ITA NO. 483/JP/2015. 8. NOW, WE TAKE UP ASSESSEES APPEAL IN ITA NO. 483/JP/2015 PERTAINING TO THE AY 2010-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. THAT THE LD. CIT(A) IS WRONG AND HAS ERRED IN L AW IN CONFIRMING THE ACTION OF LD. AO THAT ASSESSEE WAS LIABLE TO DEDUCT TDS ON CONSULTANCY CHARGES OF RS. 1,10,30,000/- (CHARGES RS. 1,00,00,0 00/- AND SERVICE TAX RS. 10,30,000/-) CREDITED IN THE ACCOUNT OF SIN CERE ARCHITECTS & ENGINEERS P. LTD. DURING THE FINANCIAL YEAR THOUGH THE TRANSACTION OF PROVING REQUIRED CONSULTANCY WAS NOT AT ALL FULFILL ED BY PAYEE AND SO AMOUNT WAS NEITHER PAYABLE TO IT NOR PAID AND ENTRY OF CREDIT MADE PROVISIONALLY WAS CANCELLED IN SOME SUBSEQUENT FINA NCIAL YEAR. 2. THAT THE APPELLANT CRAVES THE PERMISSION TO ADD TO OR AMEND TO ANY OF THE ABOVE GROUNDS OF APPEAL OR TO WITHDRAW ANY OF T HEM. 10 ITA NOS. 483, 565 & 445/JP/2015 M/S R.F. PROPERTIES PVT. LTD. (NOW KNOWN AS WORLD TRADE PARK LTD), JAIPUR. 9. THE ONLY EFFECTIVE GROUND IS AGAINST THE CONFIRM ING THE ACTION OF THE AO THAT ASSESSEE WAS LIABLE TO DEDUCT TDS ON CONSULTANCY CH ARGES OF RS. 1,10,30,000/- CREDITED IN THE ACCOUNT OF SINCERE ARCHITECTURAL & ENGINEERS PVT. LTD. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. IT IS CONTENDED THAT THE LD. CIT(A) H AD CONFIRMED THAT ASSESSEE WAS LIABLE TO DEDUCT TDS ON CONSULTANCY CHARGES OF RS. 1 CRORES AND SERVICE TAX RS. 10,30,000/- (TOTAL-1,10,30,000/-) THOUGHT THE CONSU LTANCY WAS NOT PROVIDED AND THE AMOUNT WAS NEITHER PAYABLE, NOR PAID AND CREDIT ENT RY MADE PROVISIONALLY, CANCELED SUBSEQUENTLY. IN SUPPORT OF THE CONTENTION IS THAT THE RELIANCE WAS PLACED UPON THE JUDGMENT OF THE DIT VS. ERICSSON COMMUNICATION 378 ITR 395(DELHI) AND ALSO RELIANCE WAS PLACED UPON THE DECISIONS OF THE HONB LE SUPREME COURT IN THE CASE OF CIT VS. EXCEL INDUSTRIES 358 ITR 0295 (SC). 9.1 ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATIV ES OPPOSED THE SUBMISSION. 9.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE CONTENTION OF THE ASSESSEE IS THAT NO PAYMENT WAS MADE; IN FACT, THE PROVISIONAL ENTRY WAS PASSED AS NO CONSULTANCY SERV ICES ARE RENDERED. THEREFORE, THE SAME WAS REVERSED, UNDER THIS FACTS, THE ASSESS EE WAS NOT LIABLE TO DEDUCT THE TAX. 9.3 IN THE PRESENT CASE LD. CIT(A) CONFIRMED THAT T HE ASSESSEE WAS LIABLE TO DEDUCT TAX ON CONSULTATION CHARGES OF RS. 1,10,30,0 00/-. IN RESPECT OF THE AMOUNT CREDITED ON ACCOUNT OF CONSULTANCY FEES IN RESPECT OF M/S SINCERE ARCHITECTURAL AND ENGINEERS PVT. LTD., THE CONTENTION OF THE ASSESSEE IS THAT THE PROFESSIONAL WORK 11 ITA NOS. 483, 565 & 445/JP/2015 M/S R.F. PROPERTIES PVT. LTD. (NOW KNOWN AS WORLD TRADE PARK LTD), JAIPUR. WHICH WAS ASSIGNED WAS SUBSEQUENTLY, CANCELLED. TH E NOTIONAL LIABILITY, WAS MADE IN ANTICIPATION OF TRANSACTION OF CONSULTANCY, WHICH N EVER MATERIALIZED AS THE PROJECT, HAD TO BE ABANDONED DUE TO VARIOUS LITIGATIONS. THE TRANSACTIONS IN THE BOOKS OF ASSESSEE AND M/S SINCERE ARCHITECTS HAVE BEEN EXAMI NED AND VERIFIED BY THE AO. LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF DIT VS. ERICSON COMMUNICA TION 378 ITR 395(DEL.) IN SUPPORT OF THE CONTENTION THAT WHERE MERE PASSING O F BOOKS ENTRIES, WHICH WERE SUBSEQUENTLY REVERSED WOULD NOT GIVE RISE TO AN OBL IGATION TO DEDUCT TAX BY THE ASSESSEE AS THERE WAS NO DEBT COULD BE SAID TO BE A CKNOWLEDGED BY THE ASSESSEE. THE HONBLE DELHI HIGH COURT HAS HELD AS UNDER:- IN OUR VIEW, MERE PASSING OF THE BOOK ENTRIES, WHI CH ARE REVERSED, WOULD NOT GIVE RISE TO AN OBLIGATION TO DEDUCT TAX AT SOURCE BY THE ASSESSEE, AS CLEARLY, THERE IS NO DEBT THAT CAN BE SAID TO BE SAID TO BE ACKNOWLEDGED BY THE ASSESSEE. IMPOSITION OF AN OBLIGATION TO DEDUCT TA X AT SOURCE IN THESE CIRCUMSTANCES WOULD AMOUNT TO ENFORCING PAYMENTS FR OM ONE PERSON TOWARDS A TAX LIABILITY OF ANOTHER, EVEN WHERE THE PERSON D OES NOT ACKNOWLEDGE THAT ANY SUM IS PAYABLE. THUS, IN OUR VIEW, IS CONTRARY TO THE SCHEME OF THE PROVISIONS RELATING TO COLLECTION OF TAX AT SOURCE UNDER THE ACT. IN THE PRESENT CASE REMAND REPORT WAS SOUGHT FROM T HE AO. THE AO STATED THAT SUCH ENTRIES WERE REVERSED BY BOTH PARTIES AND NO T AX WAS PAYABLE ON SUCH AMOUNT. THEREFORE, IN OUR CONSIDERED VIEW, THE RATIO OF THE HONBLE DELHI HIGH COURT IN THE CASE OF DIT VS. ERICSON COMMUNICATION 378 ITR 395( DEL.) IS APPLICABLE IN THIS CASE AS WELL. RESPECTFULLY FOLLOWING THE SAME, WE DIREC T THE AO TO DELETE THE ADDITION. THIS GROUND OF THE ASSESSEES APPEAL IS ALLOWED. 10. GROUND NO. 2, IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDICATION. 12 ITA NOS. 483, 565 & 445/JP/2015 M/S R.F. PROPERTIES PVT. LTD. (NOW KNOWN AS WORLD TRADE PARK LTD), JAIPUR. 11. THE APPEAL OF THE ASSESSEE IS ALLOWED. 12. IN THE RESULT, APPEAL OF ASSESSEE IN ITA NO. 483/JP/2015 IS ALLOWED AND APPEALS OF THE REVENUES IN ITA NOS. 445/JP/2015 & 565/JP/2015 ARE ALLOWED FOR STATISTICAL PURPOSE IN THE TERMS INDICA TED IN PARA NO. 5 OF THIS ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY, THE 29 TH DAY OF JUNE 2017. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 29/06/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S R.F. PROPERTIES PVT. LTD, (N OW KNOWN AS WORLD TRADE PARK LTD.), JAIPUR. 2. THE RESPONDENT- THE ACIT(TDS), JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 483, 565 & 445/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR