Ganga Hitech City-2 Society , Hyderabad V. Dy. Commissioner of Income Tax, Circle-6(1), Hyderabad

ITA 537/Hyd/2020

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8054 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2017-2018
• Appeal Filed On: 06-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Diversion of income; TDS
• Section: 143(3); 40(a)(ia); 201(1)

Judgement Text

ITA No.537/Hyd/2020 1 IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad (Through Video Conferencing) Before Shri A. Mohan Alankamony, Accountant Member AND Shri S.S. Godara, Judicial Member ITA No.537/Hyd/2020 Assessment Year: 2017-18 Ganga Hitech City-2 Society, 105, Divyashakti Complex, 1 st Floor, Ameerpet, Hyderabad. PAN : AAAAG6290R Vs. The Deputy Commissioner of Income Tax, Circle – 6(1), Hyderabad. (Appellant) (Respondent) Assessee by: Shri Ramesh Babu. Revenue by : Smt. D. Komali Krishna. Date of hearing: 27/10/2021 Date of pronouncement: 22/11/2021 O R D E R Per S. S. Godara, J.M. This assessee’s appeal for A.Y 2017-18 arises from the Commissioner of Income Tax (Appeals)-6, Hyderabad’s order dated 31.08.2020, in case No.10090/2019-20/A3/CIT(A)-6 involving proceedings under section 143(3) of Income Tax Act, 1961 (in short, “the Act”). Heard both the parties. Case file perused. ITA No.537/Hyd/2020 2 2. The assessee pleads the following substantive grounds in the instant appeal. 1. The learned C1T(A) erred in facts and in law in upholding the disallowance of Rs.62,37,711/- made U/s. 40(a)(ia) by the Assessing officer on the amount of Rs.2,07,92,372/- shared by the assessee with the other societies due to their legal right in the same. 2. The learned CIT(A) erred in facts in holding that the payment made by the assessee to other societies is "application 01 Income" though it is infact 'diversion of Income' by overriding title. 3. The learned C1T(A) erred in facts holding that 'if the amount is included in the income & expenditure account, it is only application of income' ignoring the plea of the assessee that it was included in the Income & expenditure account only for the purpose of matching lease receipts with the form No. 26AS. 4. The learned CIT(A) erred in law in holding that "unless and until the source has been assigned or transferred to someone else, it will not fall within the domain of diversion of income" ignoring the registered agreement entered into by the assessee society with other co-owner societies as per which the assessee received the same on behalf of the other societies only as a "trustee" for them. 5. The learned C1T(A) erred in holding that provisions of Sec. 40(a)(ia) are applicable though she admitted the fact that other societies have disclosed these amounts in their books and paid due taxes ignoring the provisions of 1st Proviso to sec. 201(1) and 2nd proviso to section. 40(a)(ia). 6. The learned C1T(A) erred in law in ignoring and not distinguishing the cases relied on by the assessee and also by wrongly applying the case of CIT Vs. Sitaldas Tirathdas and other cases referred by her in the appellate order. 7. The learned CIT(A) erred in law in dismissing the claim of the assessee that this disallowed amount of Rs.62,37,710/- should not be included in the total income for the purpose of computation of AMT U/s. 115 JC and also in holding that on this amount claim U/s 80 IAB should not be allowed though the assessing officer rightly allowed the same. 8. Any other ground or grounds that may be urged at the time of hearing of the appeal with the permission of the Hon'ble Tribunal. ITA No.537/Hyd/2020 3 3. It is clear from perusal of the assessee’s above extracted pleadings and rival contentions that the sole issue herein before us is that of disallowance / addition of Rs.62,37,711/- on account of the taxpayer’s failure in deducting TDS u/s 194I of IT Act. Learned counsel has filed a detailed paper book running into 487 pages inter-alia comprising of its payee(s) to have been assessed to tax qua the impugned payment in issue in light of section 40(a)(ia) 2 nd proviso inserted in the Act vide Finance Act 2012 w.e.f. 01.04.2013. The Revenue’s only case is that both the learned lower authorities’ action has rightly been dismissed the assessee’s claim in issue. 4. Faced with this situation, and more so when the assessee has filed all the corresponding details qua the corresponding payees having been assessed to tax, we are of the opinion that larger interest of justice would be met in case the learned Assessing Officer carries out the necessary factual verification to this effect in light of the foregoing statutory provision. We order accordingly. The assessee shall file all the relevant details of its payees’ assessment(s) within three effective opportunities of hearing in consequential proceedings. 5. No other ground has been pressed before us. ITA No.537/Hyd/2020 4 6. This assessee’s appeal is allowed for statistical purposes in above terms. Order pronounced in the Open Court on 22 nd November, 2021. Sd/- Sd/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER Hyderabad, dated 22 nd November, 2021. TYNM/sps Copy to: S.No Addresses 1 Ganga Hitech City-2 Society, 105, Divyashakti Complex, 1st Floor, Ameerpet, Hyderabad. 2 The Deputy Commissioner of Income Tax, Circle – 6(1), Hyderabad. 3 CIT (A) – 6, Hyderabad. 4 Pr. CIT – 1, Hyderabad. 5 DR, ITAT Hyderabad Benches 6 Guard File By Order