The ACIT, TDS Circle, RAJKOT-GUJARAT V. M/s. Green Gold Timber Pvt. Ltd., GANDHIDHAM

ITA 515/RJT/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0050 (ITAT-RAJKOT)
• Duration Of Justice: 4 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-11-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 12-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Keywords: Corroborative evidences
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ./ ITA NOS. 513 & 515/RJT/2012 ASSESSMENT YEAR : 2006-07 & 2007-08 RESPECTIVELY ACIT, TDS CIRCLE, RAJKOT VS M/S. GREEN GOLD TIMBER PVT LTD, PLOT NO.187, N.H. 18A, GANDHIDHAM PAN : AAACG 7578 Q / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI C.S. ANJARIA, DR ASSESSEE BY : SHRI VIMAL DESAI, CA / DATE OF HEARING : 21/11/2016 / DATE OF PRONOUNCEMENT: 20/12/2016 / O R D E R PER S.S. GODARA, JUDICIAL MEMBER :- THESE TWO REVENUES APPEALS FOR ASSESSMENT YEARS 20 06-07 AND 2007-08, ARISE AGAINST CIT(A)-II, RAJKOTS COMMON O RDER DATED 27.06.2012 PASSED IN CASES NO.CIT(A)-II/RJT/15 AND 17/11-12, IN PROCEEDINGS U/S 206C(6A) AND (7) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. WE NOTICE AT THE OUTSET THAT REVENUES IDENTICAL SUBSTANTIVE GROUND INVOLVING COMMON PLEADINGS READS AS UNDER:- THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS OF THE CASE IN DELETING THE ORDER PASSED U/S 206C(6) OF THE I.T. ACT OF AY 2006-07 IS RS.76,19,752/- (U/S 206C(6) OF RS.3,39,226/-, U/S 2 06C(7) OF RS.2,44,242/-, U/S 206C(6)-27C OF RS.40,90,863/- & U/S 206C(7)-27C OF RS.29,45,421/-) AND FOR AY 2007-08 IS RS.60,88,3 69/- (U/S 206C(6) ITA NOS. 513 & 515/RJT/2012 ACIT VS. GREEN GOLD TIMBER PVT LTD AYS 2006-07 & 2007-08 2 OF RS.20,26,756/-, U/S 206C(7) OF RS.12,16,051/-, U /S 206C(6)-27C OF RS.17,78,479/- & U/S 206C(7)-27C OF RS.10,76,087/-) BY THE A.O. 3. WE COME TO RELEVANT FACTS NOW IN FORMER ASSESSME NT YEAR 2006- 07. THIS ASSESSEE IS A COMPANY ENGAGED IN TRADING AND SAWING OF TIMBER LOGS. THE DEPARTMENT CARRIED OUT A SURVEY I N ITS CASE ON 14.03.2007. IT WOULD FIND THE ASSESSEE NOT TO HAVE PROPERLY COLLECTED TAX AT SOURCE FROM ITS TIMBER BUYERS. THE ASSESSING OFFICER THEREAFTER COMPLETED THE IMPUGNED TCS ASSESSMENT MAKING THE TWO DEMANDS OF RS.76,19,752/- AND RS.60,88,369/-; RESPECTIVELY AS PLEADED IN ABOVE EXTRACTED GROUND. 4. THE CIT(A) REVERSES ASSESSING OFFICERS ACTION A FTER OBTAINING ASSESSING OFFICERS REMAND REPORT AS FOLLOWS:- 5. I HAVE DULY CONSIDERED THE ASSESSMENT ORDER AL ONGWITH THE REMAND REPORT OF THE A.O. AND SUBMISSIONS OF THE APPELLANT . IT IS OBSERVED THAT IN THE REMAND PROCEEDINGS, THE APPELLANT PRODUCED D ECLARATIONS IN FORM NO.27C BEFORE THE A.O. WHICH IS A FACT EVIDENT FROM THE OPERATIVE PART OF THE REMAND REPORT AS REPRODUCED ABOVE. THERE AR E NO ADVERSE FINDINGS AGAINST THE APPELLANT IN REMAND REPORT. T HE APPELLANT HAS RECONCILED ITS SALES AS PER AUDITED ACCOUNTS AND TC S IN THE FOLLOWING MANNER. PARTICULARS FY 2005 - 06 FY 2006 - 07 SALES AS PER AUDITED ACCOUNTS 24,40,34,969 29,26,57,991 ADD : SALES RETURN, TAXES A ND OTHER EXPENSES 70,09,854 2,03,28,843 GROSS SALES 25,10,44,823 31,29,86,834 LESS: SALES ON WHICH DECLARATION IN FORM NO.27C COLLECTED:- HIGH SEAS SALES STOCK TRANSFER & SALES AGAINST F FORM OTHER SALES (INCLUDING STOCK TRANSFER IN FY 2005-06 1,14,59,418 - 16,83,69,070 4,75,36,931 3,57,08,016 14,56,91,542 7,12,16,335 8,40,50,345 ITA NOS. 513 & 515/RJT/2012 ACIT VS. GREEN GOLD TIMBER PVT LTD AYS 2006-07 & 2007-08 3 LESS: SALES ON WHICH TCS COLLECTED AND DEPOSITED 6,91,95,034 8,20,87,190 LESS: SCRAP SALES ON WHICH TCS COLLECTED AND DEPOSITED LESS: SCRAP SALES NOT LIABLE FOR TCS BEING RETAIL SALES FOR PERSONAL CONSUMPTION 15,48,194 - 6,58,886 3,53,056 DIFFERENCE . 4,73,107 9,51,213 NOTE :- THE DIFFERENCE IS ON ACCOUNT OF VALUE DIFFERENCE BE TWEEN US AND THE PARTIES WHICH ARE TREATED AS DISCOUNT, REBATE AND S ETTLEMENT IN OUR BOOKS. FOR EXAMPLE, IF WE ISSUE A BILL OF RS. 100/- TO PARTY AND THE PARTY DEDUCTS RS. 2/-ON ACCOUNT OF QUALITY, THEN TH EY GIVE US DECLARATION IN FORM 27C FOR RS. 98/-AND WE SHOW RS. 2/- AS DISCOUNT, REBATE AND SETTLEMENT IN OUR BOOKS. THE F IGURE OF DISCOUNT, REBATE AND SETTLEMENT WAS RS. 5,39,507/- FOR F.Y. 2 005-06 & RS. 13,65,304/- FOR F.Y. 2006-07 AS PER AUDITED ACCOUNT S WHICH INCLUDES THE ABOVE DIFFERENCE. AS FAR AS FILING OF DECLARATIONS IS CONCERNED, IT I S OBSERVED THAT THE FIGURES AS PER THE A.O. AND THE FIGURES AS PER THE APPELLANT ARE BROADLY MATCHING. IN FACT, THE FIGURES AS PER A.O. ARE MORE THAN THE APPELLANT WHICH CLEARLY INDICATE THAT THE DECLARATIONS OF REQ UISITE AMOUNT HAVE BEEN RECEIVED BY THE APPELLANT TO DISCHARGE HIM FRO M THE LIABILITY OF TCS. THERE IS NO ADVERSE FINDING OF THE A.O. IN RES PECT OF THIS AND HENCE THE SUBMISSIONS OF THE APPELLANT HAVE TO BE A CCEPTED. IT IS ALSO FOUND TO BE ACCEPTABLE THAT ONCE THE DECLARATIONS A RE RECEIVED BY THE PAYER FROM THE PAYEE, THE LIABILITY OF TDS/TCS IS N OT THERE AND FILING IS AN ACT SUBSEQUENT TO IT WHICH DOES NOT AFFECT THE S ANCTITY OF SUCH DECLARATIONS. THE VARIOUS ITAT DECISIONS RELIED UPO N BY THE APPELLANT ALSO EXPLAIN THIS PRINCIPLE IN A CONVINCING MANNER. EVEN OTHERWISE, THE ISSUE OF FILING IS NOT MUCH RELEVANT AS THE APPELLA NT, DURING THE COURSE OF REMAND PROCEEDINGS, HAS FILED SUCH DECLARATIONS BEFORE THE CIT AND SUBMITTED A PROOF THEREOF BEFORE THE A.O. AND THUS COMPLETED THE FORMALITY OF FILING AND PROOF THEREOF ALSO. THE APP ELLANT HAS ALSO SUBMITTED CONFIRMATIONS OF FEW OF THE BUYERS TO THE EFFECT THAT THEY HAD SUBMITTED THE DECLARATION TO THE APPELLANT IN RESPE CT OF THEIR PURCHASE FROM THE APPELLANT. IN VIEW OF THIS, NO ADVERSE INF ERENCE CAN BE DRAWN ON THE GROUND OF FILING OF DECLARATIONS WHEN THE RE CEIPT AND ITA NOS. 513 & 515/RJT/2012 ACIT VS. GREEN GOLD TIMBER PVT LTD AYS 2006-07 & 2007-08 4 GENUINENESS OF DECLARATIONS ARE ESTABLISHED AND FIL ING HAS NO REAL BEARING IN THE MATTER OF DETERMINATION OF LIABILITY . MORE SO, WHEN THE A.O. HAS ALSO NOT FOUND ANYTHING ADVERSE IN HIS REM AND REPORT. IN RESPECT OF RETAIL SALES FOR PERSONAL CONSUMPTION OF RS. 3,53,056/-, THE APPELLANT PRODUCED COPY OF BILLS BEFORE ME AS WELL AS THE A.O. FROM WHICH IT WAS EVIDENT THAT THE WOOD WAS SOLD AS FIRE WOOD AND THE INDIVIDUAL AMOUNT OF THE BILLS WAS ALSO VERY LOW. T HE SUBMISSIONS THAT THE SAME WERE FOR PERSONAL CONSUMPTION AND HENCE NO T LIABLE FOR TCS IN VIEW OF DEFINITION OF BUYER IN SECTION 206C IN W HICH PERSON PURCHASING FOR PERSONAL CONSUMPTION IS EXCLUDED ARE CONVINCING AND HENCE ACCEPTED. ON THE REMAINING AMOUNT, THE APPELLANT HAS PAID TCS AND PROOFS OF PAYMENT HAVE BEEN FURNISHED. THEREFORE, THERE CANNO T BE ANY DISPUTE REGARDING THIS. THE NET DIFFERENCE IS OF VERY SMALL AMOUNT AND FOR THAT THE APPELLANT HAS GIVEN A PLAUSIBLE REASON BY WAY O F A NOTE WHICH IS VERIFIABLE FROM THE AUDITED ACCOUNTS. THUS, THE APP ELLANT HAS BEEN ABLE TO ESTABLISH THE POSITION OF TCS IN RESPECT OF ITS ENTIRE SALES WITH SUPPORTING EVIDENCES. THE SAME HAS BEEN VERIFIED BY THE A.O. AND NO INFIRMITY HAS BEEN FOUND. UNDER THE CIRCUMSTANCES, THE DEMAND CANNOT BE SUSTAINED. I THEREFORE DIRECT THE A.O. TO DELETE THE ENTIRE DEMAND FOR BOTH THE YEARS. GROUNDS NO. 2 TO 5 ARE THUS ALLOWED . SINCE I HAVE DECIDED THE ISSUE ON MERITS, THE ALTER NATIVE TECHNICAL ARGUMENTS OF THE APPELLANT BASED ON THE APEX COURT JUDGMENT IN CASE OF HINDUSTAN COCA COLA PVT. LTD. AND DELHI ITAT DEC ISION IN CASE OF CATHOLIC RELIEF SERVICES DO NOT REQUIRE ANY SEPARAT E ADJUDICATION. 6. IN THE RESULT, THE APPEALS ARE ALLOWED. 5. WE HAVE HEARD BOTH THE PARTIES. THE DEPARTMENTAL REPRESENTATIVE STRONGLY SEEKS TO REVIVE THE ABOVE I MPUGNED TCS DEMANDS IN THE TWO ASSESSMENT YEARS IN QUESTION. T HERE IS HARDLY ANY DISPUTE BY NOW THAT THE INSTANT CASE IS NOT THAT OF NON-COLLECTION OF TCS BUT THAT OF IMPROPER COLLECTION. THE ASSESSEE H AS NOT ONLY FILED ITS ALL REQUISITE DETAILS OF TCS COLLECTED FROM ITS TIM BER BUYERS, BUT ALSO IT HAS GIVEN ALL COGENT REASONS TO HAVE SOLD THE TIMBE R IN QUESTION AFTER ITA NOS. 513 & 515/RJT/2012 ACIT VS. GREEN GOLD TIMBER PVT LTD AYS 2006-07 & 2007-08 5 VARIOUS DISCOUNTS, REBATES AND SETTLEMENTS. WE AFF ORDED AMPLE OPPORTUNITY TO THE REVENUE TO QUOTE ANY SPECIFIC MA TERIAL IN THE CASE FILE FOR THE PURPOSE OF REBUTTING THE ABOVE STATED FACTUAL FINDINGS. THERE IS NO SUCH MATERIAL IN ALL OF ASSESSEES PAPE R-BOOK WHICH COULD PIN-POINT ANY IRREGULARITY OR INFIRMITY IN THE ABOV E EXTRACTED LOWER APPELLATE FINDINGS. IT HAS FURTHER COME ON RECORD THAT THE ASSESSEE HAD COLLECTED FORM NO.27C IN SUPPORT OF ITS TCS COLLECT ION. THE CIT(A) SOUGHT A REMAND REPORT THEREUPON. THE ASSESSING OF FICER DID NOT COMMENT ANY ADVERSE MATERIAL IN HIS REMAND REPORT D ATED 08.06.2012 FORMING PART OF THE PAPER-BOOK AT PAGES 81 TO 91. WE THUS UPHOLD CIT(A)S COMMON ORDER UNDER CHALLENGE IN BOTH THE A PPEALS. 6. THESE TWO REVENUES APPEALS ARE ACCORDINGLY DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 20 TH DECEMBER, 2016 AT AHMEDABAD. SD/- SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER AHMEDABAD; DATED 20/12/2016 *BT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A) 5. , / DR, ITAT, RAJKOT 6. & / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) ' #, / ITAT, RAJKOT