ACIT, New Delhi V. M/s. C.J. International Hotels Ltd., New Delhi

ITA 5348/DEL/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6691 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-02-2016
• Assessment Year: misc
• Appeal Filed On: 30-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 133A; 194C; 201(1); 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: B : NEW DELHI BEFORE SHRI R.S. SYAL, AM & SHRI A.T. VARKEY, JM ITA NOS.4795 & 4796/DEL/2011 ASSESSMENT YEAR : 2008-09 ITA NOS.4797 & 4798/DEL/2011 ASSESSMENT YEAR : 2009-10 C.J. INTERNATIONAL HOTELS LTD., HOTEL LE MERIDIAN, 8, WINDSOR PLACE, JANPATH, NEW DELHI. PAN: AAACC0174E VS. ADDL.CIT, RANGE-49, NEW DELHI. ITA NOS.23 & 27/DEL/2015 ASSESSMENT YEAR : 2008-09 ITA NOS.24 & 28/DEL/2015 ASSESSMENT YEAR : 2009-10 ITA NOS.5348 & 5350/DEL/2011 ASSESSMENT YEARS : 2008-09 & 2009-10 ADDL.CIT, RANGE-49(1)/73(1), NEW DELHI VS. C.J. INTERNATIONAL HOTELS LTD., HOTEL LE MERIDIAN, 8, WINDSOR PLACE, JANPATH, NEW DELHI. PAN: DELCO1385G ASSESSEE BY : SHRI TARANDEEP SINGH, CA DEPTT. BY : MS SUSAN D. GEORGE, SR. DR ITA NOS.4795 TO 4798, 5348 & 5350/DEL/2011 ITA NOS.23, 24 & 27&28/DEL/2015 2 DATE OF HEARING : 07.03.2016 DATE OF PRONOUNCEMENT : 10.03.2016 ORDER PER BENCH : THIS BATCH CONTAINING FOUR APPEALS BY THE ASSESSEE AND SIX BY THE REVENUE RELATING TO FINANCIAL YEARS 2007 -08 AND 2008-09 ARISE OUT OF THE COMMON ORDER PASSED BY THE CIT(A) ON 2.9.2011. SINCE THESE APPEALS ARE BASED ON SIMIL AR GROUNDS AND COMMON FACTS, WE ARE, THEREFORE, PROCEE DING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF RUNNING A HOT EL UNDER THE NAME AND STYLE OF LE MERIDIAN. A SURVEY OPERAT ION WAS CONDUCTED U/S 133A OF THE INCOME-TAX ACT, 1961 (HER EINAFTER ALSO CALLED THE ACT) AT THE BUSINESS PREMISES OF THE ASSESSEE ON 29.9.2006, WHICH HIGHLIGHTED CERTAIN DE FAULTS IN THE MATTER OF DEDUCTION OF TAX AT SOURCE FROM THE P AYMENTS MADE BY THE ASSESSEE. NOTICE DATED 6.8.2007 U/S 20 1 WAS ISSUED ON THE PREMISE THAT THE ASSESSEE FAILED TO P ROPERLY ITA NOS.4795 TO 4798, 5348 & 5350/DEL/2011 ITA NOS.23, 24 & 27&28/DEL/2015 3 DEDUCT TAX AT SOURCE IN RESPECT OF CERTAIN PAYMENTS . IN A COMMON ORDER DATED 30.3.2011 PASSED BY THE ADDL. COMMISSIONER OF INCOME-TAX, RANGE 49, NEW DELHI [HEREINAFTER ALSO CALLED `THE AO(TDS)] U/S 201(1)/ (1A) OF THE ACT FOR FOUR YEARS, IT WAS OBSERVED THAT THE AS SESSEE MADE PAYMENTS TO SOME PARTIES INCLUDING M/S DIVYA A HUJA AND M/S GLOW SHOW STAGE EVENTS. THE ASSESSEE WAS F OUND TO HAVE DEDUCTED TAX AT SOURCE ON PAYMENTS MADE TO THESE TWO PARTIES U/S 194C OF THE ACT. THE AO OPINED THAT THE TAX OUGHT TO HAVE BEEN WITHHELD ON SUCH PAYMENTS U/S 19 4J OF THE ACT INSTEAD OF SECTION 194C, WHICH RESULTED INT O TREATING THE ASSESSEE IN DEFAULT U/S 201(1) OF THE ACT. CON SEQUENTLY, INTEREST U/S 201(1A) WAS ALSO LEVIED. THE LD. CIT( A) ECHOED THE VIEW OF THE AO(TDS) ON THE PAYMENTS MADE TO THE SE TWO PARTIES. IN ADDITION, THE ASSESSEE WAS ALSO FOUND TO HAVE PAID TIPS TO ITS EMPLOYEES DURING THE TWO YEARS UND ER CONSIDERATION ON WHICH NO DEDUCTION OF TAX AT SOURC E WAS MADE. THE AO TREATED SUCH TIPS TO EMPLOYEES AS PAR T OF `SALARIES. ON THE FAILURE OF THE ASSESSEE IN DEDUC TING TAX AT ITA NOS.4795 TO 4798, 5348 & 5350/DEL/2011 ITA NOS.23, 24 & 27&28/DEL/2015 4 SOURCE U/S 192 OF THE ACT ON SUCH TIPS, THE AO TREA TED THE ASSESSEE IN DEFAULT. INTEREST UNDER SECTION 201(1A ) OF THE ACT WAS ALSO LEVIED. THE LD. CIT(A) OVERTURNED THE ORDER OF THE AO (TDS) QUA PAYMENT OF TIPS TO THE EMPLOYEES. BOTH THE SIDES ARE IN APPEAL ON THEIR RESPECTIVE STANDS. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE RELEVANT MATERIAL ON RECORD. THIS BATCH OF APPEALS WAS TAKEN UP BY BOTH THE SIDES SIMULTANEOUS WITH THE APPEALS FOR THE A.YS. 2006-07 AND 2007-08. IN FACT, NO SEPARATE ARG UMENTS WERE ADVANCED IN RESPECT OF THE PRESENT APPEALS AND BOTH THE SIDES ADOPTED THEIR ARGUMENTS MADE FOR THE SAID EAR LIER YEARS, FOR WHICH WE HAVE PASSED A SEPARATE ORDER. F OLLOWING CONCLUSIONS, WHICH ARE RELEVANT FOR THE INSTANT APP EALS, HAVE BEEN ARRIVED AT IN THE ORDER FOR THE EARLIER YEARS. 1. TWO ORIGINAL CONSOLIDATED APPEALS FILED BY THE REVE NUE FOR BOTH THE YEARS IN RESPECT OF DEFAULTS U/S 201(1 ) AND 201(1A) ARE SUFFICIENT TO PROTECT THE INTEREST OF T HE DEPARTMENT AND THE FOUR SEPARATE APPEALS FILED ITA NOS.4795 TO 4798, 5348 & 5350/DEL/2011 ITA NOS.23, 24 & 27&28/DEL/2015 5 SUBSEQUENTLY ARE INFRUCTUOUS. ACCORDINGLY, THE QUESTION OF DELAY IN FILING OF SEPARATE APPEALS BY THE REVENUE BECOMES ACADEMIC AND SO IS THE ARGUMENT OF THE LD. AR FOR DISMISSING SOME OF THE REVENUES APPEALS, EACH WITH TAX EFFECT OF LESS THAN RS.10 LA C. 2. PROVISIONS OF SECTION 194J ARE NOT APPLICABLE ON PAYMENTS MADE TO M/S DIVYA AHUJA. ACCORDINGLY, DEDUCTION OF TAX AT SOURCE MADE BY THE ASSESSEE U/S 194C IS IN ORDER. 3. PAYMENT MADE TO M/S GLOW SHOW STAGE EVENTS REQUIRES DEDUCTION OF TAX U/S 194J OF THE ACT. THE RE WILL BE NO LIABILITY OF THE PAYER-ASSESSEE U/S 201( 1) TO THE EXTENT OF THE PAYEE INCLUDING THE AMOUNT RECEIV ED IN ITS TOTAL INCOME AND PAYING TAX THEREON. HOWEVE R, LIABILITY TOWARDS INTEREST U/S 201(1A) WILL STILL B E THERE FROM THE DATE ON WHICH SUCH TAX WAS DEDUCTIBLE TO T HE DATE OF FURNISHING OF RETURN OF INCOME BY M/S GLOW SHOW STAGE EVENTS EVEN IF THE ASSESSEE IS NOT TREAT ED AS IN DEFAULT U/S 201(1). ITA NOS.4795 TO 4798, 5348 & 5350/DEL/2011 ITA NOS.23, 24 & 27&28/DEL/2015 6 4. TIPS TO EMPLOYEES ARE CHARGEABLE U/S 15 READ WITH SECTION 17. DEDUCTION OF TAX AT SOURCE U/S 192 IS REQUIRED. HOWEVER, THE LIABILITY U/S 201(1) GETS WA IVED DUE TO BONA FIDE BELIEF OF THE ASSESSEE. HOWEVER, INTEREST U/S 201(1A) IS CHARGEABLE. 4. THE ABOVE CONCLUSIONS APPLY TO THE INSTANT APPE ALS AS WELL. 5. IN THE RESULT, THE APPEALS OF THE ASSESSEE FOR B OTH THE YEARS UNDER CONSIDERATION ARE PARTLY ALLOWED; TWO S EPARATE APPEALS FOR EACH YEAR FILED BY THE REVENUE ARE DISM ISSED AS INFRUCTUOUS; AND CONSOLIDATED APPEALS OF THE REVENU E FOR EACH OF THE TWO YEARS ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.03.2016. SD/- SD/- [A.T. VARKEY] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, MARCH, 2016. DK ITA NOS.4795 TO 4798, 5348 & 5350/DEL/2011 ITA NOS.23, 24 & 27&28/DEL/2015 7 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.