M/s. Shillong Lojong Football Club (P) Ltd., Shillong V. Assistant Commissioner of Income Tax, Circle - Shillong , Shillong

ITA 53/GTY/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9740 (ITAT-GUWAHATI)
• Duration Of Justice: 2 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 20-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANDIP SENGUPTA J
• Keywords: TDS
• Section: 143(3); 40(a)(ia)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL GUWAHATI BENCH, GUWAHATI BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 53 / KOL / 2017 ASSESSMENT YEAR :2013-14 M/S SHILLONG LAJONG FOOTBALL CLUB (P) LTD., HOTEL CENTRE POINT BUILDING, POLICE BAZAR,SHILLOLNG-793001 [ PAN NO.AANCS 4360 F ] V/S . ACIT, CIRCLE AAYKAR BHAWAN, M.G ROAD, SHILLONG- 793001 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SOMNATH GHOSH, ADVOCATE /BY RESPONDENT SHRI SANDIP SENGUPTA, JCIT-DR /DATE OF HEARING 10-07-2019 /DATE OF PRONOUNCEMENT 25-09-2019 / O R D E R PER BENCH:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2013-14 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-SHILLONGS ORD ER DATED 14.02.2017 PASSED IN CASE NO.SHILL-314/2015-16, INVOLVING PROC EEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. IT TRANSPIRES AT THE OUTSET THAT THE ASSESSEE H AS RAISED TWIN SUBSTANTIVE GROUNDS IN CHALLENGING CORRECTNESS OF BOTH THE LOWE R AUTHORITIES ACTION DISALLOWING INTEREST ON LOANS AND DONATION INVOLVIN G SUMS OF 2.80,214/- AND ITA NO.53/GAU/2017 A.Y. 2013 -14 M/S SHILLONG LAJONG FOOTBALL CLUB (P) LTD. VS. A CIT, CIR-SHILL PAGE 2 65,000/-; RESPECTIVELY MADE DURING THE COURSE OF AS SESSMENT AND AFFIRMED IN THE LOWER APPELLATE PROCEEDINGS. 3. LEARNED COUNSEL IS VERY FAIR AT THE OUTSET IN IN FORMING US THAT THE ASSESSEE NO MORE WISHES TO PRESS FOR ITS LATER SUBS TANTIVE GROUND ON DONATION ISSUE. WE THEREFORE PROCEED TO ADJUDICATE UPON THE ASSESSEES FORMER GRIEVANCE SEEKING TO INTEREST DISALLOWANCE ON LOANS TO THE TUNE OF 2,80,214/-. 4. RELEVANT FACTS QUA THE INSTANT SOLE SURVIVING IS SUE ARE IN A VERY NARROW COMPASS. THERE IS NO DISPUTE THAT THE ASSESSEE HAD RAISED LOANS FROM ONE MRS. LALPARLIANI AND PAID INTEREST OF 2,80,214/- IN THE RELEVANT PREVIOUS YEAR WITHOUT DEDUCTING TDS THEREUPON. BOTH THE LOWER AUT HORITIES ARE OF THE VIEW THAT THE ASSESSEES FAILURE IN DEDUCTING THE SAID T DS INVITES DISALLOWANCE U/S 40(A)(IA) OF THE ACT. THE ASSESSEES ARGUMENT IS TH AT IF PAYEE/RECIPIENT OF INTEREST AMOUNT ENJOYS U/S 10(26) EXEMPTION AS PER HER CERTIFICATE FORMING PART OF RECORD. THE REVENUE PLACES HEAVY RELIANCE ON CIT (A)S ORDER QUOTING HON'BLE AGARTALA HIGH COURTS SRI CHANDRA MOHAN SINKU VS. UNION OF INDIA (2015) 55 TAMAN.COM 383 (TRIPURA) [FULL BENCH] DECL INING SAID PETITIONER EXEMPT ASSESSEES PLEA AND FORMING THE CONTEST OF S EC. 197 PROCEEDINGS. 5. AFTER GIVING OUR THOUGHTFUL CONSIDERATION TO RIV AL CONTENTIONS, WE FIND NO MERIT IN THE REVENUES STAND. WE MAKE IT CLEAR THAT THE ASSESSING OFFICER HIMSELF HAS NOT DISPUTED THE ASSESSEES BASIS ASSER TION THAT ITS PAYEE / RECIPIENT IS NOT ASSESSABLE U/S 10(26) OF THE ACT. WE NOTICE IN THIS BACKDROP THAT THE TRIBUNALS CO-ORDINATE BENCH IN ITA NO.100/GAU/2016 IN KOMORRAH LIMESTONE MINING CO. LTD. VS. ACIT CIRCLE(AO), SHIL LONG DECIDED ON 08.03.2018 HOLDS THAT THE IMPUGNED DISALLOWANCE DOE S NOT APPLY IN CASE OF THE PAYEES/RECIPIENTS ENJOYING EXEMPTION U/S. 10(26 ) OF THE ACT. LEARNED CO- ORDINATE BENCH QUOTES IN GE INDIA TECHNOLOGY CENTRE (P) LTD. VS. COMMISSIONER OF INCOME-TAX (2010) 327 ITR 456 (SC) HOLDING LONG BACK THAT LIABILITY TO DEDUCT TDS IS ATTRACTED ONLY IF THE AM OUNT IN QUESTION IS INCOME OF ITA NO.53/GAU/2017 A.Y. 2013 -14 M/S SHILLONG LAJONG FOOTBALL CLUB (P) LTD. VS. A CIT, CIR-SHILL PAGE 3 THE RECIPIENT CONCERNED. THIS TRIBUNALS ANOTHER DE CISION IN TAMCHIKUSUK VS. ADDITIONAL COMMISSIONER OF INCOME-TAX, RANGE, TEZPU R, ASSAM (2015) 155 ITD 276 (GAUWATI-TRIB) ALSO HOLDS THAT THE IMPUGNED DISALLOWANCE IS NOT SUSTAINABLE EVEN IN CASE OF AN ASSESSEE / PAYER WHO IS HIMSELF EXEMPT U/S 10(26) OF THE ACT. WE DRAW STRONG SUPPORT FROM THER E TWO CO-ORDINATE BENCHES ORDER TO OBSERVE THAT ONCE THE EXEMPT ASSE SSEE / PAYER IS HIMSELF HAS BEEN HELD TO BE EXEMPT IN THE CAPACITY OF A DED UCTOR, THE SAME RELIEF MUST ALSO FOLLOW WHEN SUCH AN ASSESSEE IS PAYEE ALSO AS A NECESSARY COROLLARY. 6. COMING TO THE REVENUES ARGUMENT PLACING RELIAN CE UPON HON'BLE TRIPURA HIGH COURTS DECISION IN CHANDRA MOHAN SINKU AND ORS . (SUPRA) WE FIND THAT THE SAID LIS INVOLVED ALTOGETHER A DIFFERENT QUESTION. THE SAI D ASSESSEE HAD CLAIMED TO BE EXEMPT U/S 10(26) AND FO R CONSEQUENTIAL RELIEF U/S 197 OF THE ACT AS WELL. THEIR LORDSHIP SETTLED THE LAW THAT THE SAME WOULD BE ADMISSIBLE TO THEM SUBJECT TO FULFILMENT OF THE STA TUTORY TERMS AND CONDITIONS ONLY. WE CONCLUDE IN THESE FACTS THAT THIS JUDICIAL PRECEDENT QUOTED AT THE REVENUES BEHEST IS ALTOGETHER ON A DIFFERENT ISSUE . WE ACCORDINGLY HOLD THAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN CONFIRMING THE ASSESSEES INTEREST PAYMENT AMOUNTING TO 2,80,214/- ON ACCOUNT OF ITS FAILURE IN DEDUCTING TDS THEREUPON. THIS FORMER SUBSTANTIVE IS ACCEPTED THER EFORE. 7. THIS ASSESSEES APPEAL IS PARTLY ALLOWED IN ABOV E TERMS. ORDER PRONOUNCED IN ACCORDANCE WITH RULE 34(3) OF T HE ITAT RULES BY PUTTING ON NOTICE BOARD 25/09/2019 SD/- SD/- ( #) (%& #) ( A.L.SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) GUWAHATI, *DKP '- 25 / 09 /201 9 ITA NO.53/GAU/2017 A.Y. 2013 -14 M/S SHILLONG LAJONG FOOTBALL CLUB (P) LTD. VS. A CIT, CIR-SHILL PAGE 4 / COPY OF ORDER FORWARDED TO:- 1 . /APPELLANT-M/S SHILLONG LAJONG FOOTBALL CLUB (P) LT D., HOTEL CENTRE POINT BUILDING, POLICE BAZAR, SHILLOLNG-783001 2 . /RESPONDENT-ACIT, CIRCLE, AAYKAR BHAWAN, M.G. ROAD, SHILLONG-793001 3. 2 3 8 / CONCERNED CIT GUWAHATI 4. 3- / CIT (A) GUWAHATI 5 . ; &&2, 2, 8 / DR, ITAT, GUWAHATI 6. A / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY (ON TOUR) 2,