JAY INVESTRADE P.LTD, MUMBAI V. ITO (TDS) 2(1), MUMBAI

ITA 5139/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3725 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Assessment Year: 2007-2008
• Appeal Filed On: 08-08-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Non compliance
• Section: 201(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL J BE NCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER / I .TA NO. 5139/M/2014 ( / ASSESSMENT YEAR: 2007-08 M/S. JAY INVESTRADE PVT. LTD., 21, MODI STREET, ACHAL BLDG., FORT, MUMBAI-400 020 / VS. THE ITO (TDS) - 2(1), AAYAKAR BHAVAN, MUMBAI-400 020 ./ ./ PAN/GIR NO. AAACJ 5150H ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI NEELKANTH KHANDELWAL / RESPONDENT BY: SHRI ASHISH HELIWAL / DATE OF HEARING :07.03.2016 ! / DATE OF PRONOUNCEMENT :29.04.2016 / O R D E R PER C.N. PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF THE LD. CIT(A)-12, MUMBAI DATED 02.05.2014 PERTAINING TO A SSESSMENT YEAR 2007-08. 2. IN THIS CASE, THE ASSESSEE CONTENTS THAT THE LD. CIT(A) ERRED IN UPHOLDING THE ACTION OF ITO (TDS) 2(1), MUMBAI IN TREATING THE APPELLANT AS ASSESSEE IN DEFAULT U/S. 201(1) ON ACC OUNT OF NON- DEDUCTION OF TDS. ITA NO. 5139/M/2014 2 3. BRIEF FACTS ARE THAT THE ITO(TDS) 2(1), MUMBAI P ASSED ORDER U/S. 201(1)/201(1A) READ WITH SEC. 40(A)(IA) OF THE ACT ON 31.3.2011 TREATING THE ASSESSEE AS DEFAULT FOR NON COMPLIANCE WITH THE PROVISIONS OF CHAPTER-XVII-B OF THE I.T. ACT RELAT ING TO DEDUCTION OF TAX ON THE EXPENDITURE DISALLOWED OF RS. 4,01,16,18 5/- AS PER SECTIONS 40(A)(I), 40(A)(IA) AND 40(A)(III). IT WAS THE SUB MISSION OF THE ITO THAT ASSESSEE HAD PROVIDED FOR INTEREST OF RS. 4,01 ,16,185/- PAYABLE TO INDIABULLS FINANCIAL SERVICES LTD ON 31.3.2007 A ND THIS WAS REVERSED ON 1.4.2008 AS THE SAME IS NOT PAYABLE THE REFORE IT WAS CONTENDED THAT TDS HAS NOT BEEN PAID ON THE SAID PR OVISION. IN THE ABSENCE OF ANY DETAILS FURNISHED WITH REGARD TO SUC H CLAIM, THE ITO PASSED ORDER TREATING THE ASSESSEE AS DEFAULT WITHI N THE MEANING OF SECTION 201(1) FOR NON DEDUCTION OF TDS @22.66% ON SUCH INTEREST PROVISION AND WORKED OUT THE DEMAND AT RS. 90,90,32 7/-. 4. ON APPEAL, THE LD. CIT(A) IN PRINCIPLE SUSTAINED THE APPLICABILITY OF TDS PROVISIONS OF SECTION194A OF T HE ACT ON THE AMOUNTS PAYABLE TOWARDS INTEREST. HOWEVER, HE ACCEP TED THE ALTERNATIVE PLEA OF THE ASSESSEE THAT IF THE RECIPI ENT HAD DISCLOSED THE IMPUGNED AMOUNT IN THE RETURN OF INCOME AND PAID TA XES THEREON, THE ASSESSEE SHOULD NOT BE TREATED AS ASSESSEE IN DEFAULT U/S. 201(1) OF THE ACT IN VIEW OF THE DECISION OF THE HONBLE S UPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES PVT. LTD. VS CIT (163 TAXMAN 35). SINCE NO DETAILS WERE FURNISHED IN THIS REGAR D, THE LD. CIT(A) OBSERVED THAT THE ASSESSEE IS FREE TO FURNISH NECES SARY EVIDENCES IN THIS REGARD BEFORE THE ASSESSING OFFICER FOR DUE VE RIFICATION. ITA NO. 5139/M/2014 3 5. THE LD. COUNSEL FOR THE ASSESSEE BEFORE US SUBMI TS THAT THE RECIPIENT PAID TAXES AND THEREFORE THE ASSESSEE CA NNOT BE TREATED AS ASSESSEE IN DEFAULT. THE LD. COUNSEL FOR THE ASSESS EE REQUESTED THAT THE DIRECTIONS MAY BE GIVEN TO THE ASSESSING OFFICE R TO VERIFY THE FACT AND DECIDE THE ISSUE ACCORDINGLY. 6. THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTS THE ORDERS OF THE LOWER AUTHORITIES. 7. ON HEARING BOTH THE PARTIES AND PERUSING THE ORD ERS OF THE LOWER AUTHORITIES, WE AGREE WITH THE LD. CIT(A) IN PRINCIPLE HOLDING THAT PROVISIONS OF SEC. 194A ARE ATTRACTED ON INTER EST PAYABLE BY THE ASSESSEE. HOWEVER, COMING TO THE ALTERNATIVE CONTE NTION, THE LD. CIT(A) HELD THAT THE ONUS LIES ON THE ASSESSEE TO E STABLISH THE FACT THAT THE RECIPIENT SHOWN THIS AMOUNT AS INCOME AND ASSESSEE IS FREE TO FURNISH SUCH EVIDENCES FOR DUE VERIFICATION BY T HE ASSESSING OFFICER. IT IS THE SUBMISSION OF THE LD. COUNSEL T HAT DUE TO STRANGE RELATIONS NOW WITH THE RECIPIENT INDIABULLS FINANCI AL SERVICES LTD, IT IS NOT IN A POSITION TO FURNISH NECESSARY DETAILS R EADILY THEREFORE IT IS PRAYED THAT DIRECTION MAY BE GIVEN TO THE ASSESSING OFFICER TO FIND OUT THE SITUATION AND DECIDE THE ISSUE IN THE INTER EST OF JUSTICE. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, WE DIR ECT THE ASSESSING OFFICER TO CALL FOR THE DETAILS FROM HIS COUNTERPAR T WHO IS ASSESSING INDIABULLS FINANCIAL SERVICES LTD., AND FIND OUT WH ETHER THEY HAVE ACCOUNTED FOR THE INTEREST INCOME AS CONTENDED BY T HE ASSESSEE AND IF SO NOT TO TREAT THE ASSESSEE IN DEFAULT FOR NON DED UCTION OF TDS ON SUCH AMOUNT U/S. 201(1) OF THE ACT. WITH THIS DIRE CTIONS, WE RESTORE ITA NO. 5139/M/2014 4 THIS TO THE FILE OF THE ASSESSING OFFICER WHO SHALL PASS NECESSARY ORDERS ACCORDINGLY. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS P ARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH APRIL, 2016. SD/- SD/- (ASHWANI TANEJA) (C.N. PRASAD ) / ACCOUNTANT MEMBER $ % /JUDICIAL MEMBER MUMBAI; ( DATED : 29 TH APRIL, 2016 . % . ./ RJ , SR. PS !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. *+ ,%%-. , -.! , / DR, ITAT, MUMBAI 6. , /01 / GUARD FILE. / BY ORDER, *% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI