ACIT, Noida V. M/s. Jaypee Ganga Infrastructure Corporation Ltd., Noida

ITA 5440/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4123 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 14-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 04-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASHWINI GARG
• Section: 133A; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER ITA NO.5440/DEL/2015 ASSESSMENT YEAR : 2011-12 ACIT, TDS, NOIDA. VS. JAYPEE GANGA INFRASTRUCTURE CORPORATION LTD., SECTOR- 128, NOIDA. PAN : AABCJ9667J (APPELLANT) (RESPONDENT) ITA NO.1094/DEL/2017 ASSESSMENT YEAR : 2012-13 ACIT, TDS, NOIDA. VS. JAYPEE GANGA INFRASTRUCTURE CORPORATION LTD., SECTOR- 128, NOIDA. PAN : AABCJ9667J (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI AMIT JAIN, SR.DR ASSESSEE BY : SHRI ASHWINI GARG, ADV. DATE OF HEARING : 10-01-2018 DATE OF PRONOUNCEMENT : 16-01-2018 O R D E R PER R. K. PANDA, AM : THE ABOVE TWO APPEALS FILED BY THE REVENUE ARE DIRE CTED AGAINST THE COMMON ORDER DATED 14.05.2015 OF CIT(A)- I, NOIDA F OR THE ASSESSMENT YEARS 2011-12 AND 2012-13 RESPECTIVELY. SINCE IDENTICAL GROUNDS HAVE BEEN TAKEN BY 2 ITA NO.5440/DEL/2015 ITA NO.1094/DEL/2017 THE REVENUE IN BOTH THE APPEALS, THEREFORE, THESE W ERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. GROUNDS TAKEN IN BOTH THE APPEALS ARE AS UNDER : - ITA NO.5440/DEL/2015 (A.Y.2011-12) 1. LD. CIT(A)-I, NOIDA HAS ERRED IN LAW AND ALL FA CTS IN DELETING THE DEMAND ON ACCOUNT OF PAYMENT OF BANK GUARANTEE COMMISSION IGN ORING THE FACT THAT NOTIFICATION NO. 56/2012[F.NO.275-53/2012-IT (B)], DATED 31.12.2 012 WHICH PROVIDES THAT NO TDS SHALL BE DONE ON PAYMENT LIKE BANK GUARANTEE COMMIS SION IS EFFECT FROM 01.01.2013 WHILE IN THE CASE OF THE ASSESSEE THE PAYMENT OF BA NK GUARANTEE OF BANK GUARANTEE COMMISSION WAS DONE BEFORE 01.01.2013. ITA NO.1094/DEL/2017 (A.Y.2012-13) 1. LD. CIT(A)-I, NOIDA HAS ERRED IN LAW AND ALL FA CTS IN DELETING THE DEMAND ON ACCOUNT OF PAYMENT OF BANK GUARANTEE COMMISSION IGN ORING THE FACT THAT NOTIFICATION NO. 56/2012[F.NO.275-53/2012-IT (B)], DATED 31.12.2 012 WHICH PROVIDES THAT NO TDS SHALL BE DONE ON PAYMENT LIKE BANK GUARANTEE COMMIS SION IS EFFECT FROM 01.01.2013 WHILE IN THE CASE OF THE ASSESSEE THE PAYMENT OF BA NK GUARANTEE COMMISSION WAS DONE BEFORE 01.01.2013. 3. AFTER HEARING BOTH THE SIDES, WE FIND A SURVEY W AS CONDUCTED U/S 133A IN THE CASE OF THE ASSESSEE ON 24.02.2014 TO VERIFY TH E CORRECT APPLICABILITY OF TDS RELATED PROVISIONS. FROM THE DETAILS FURNISHED BY THE ASSESSEE IT WAS FOUND THAT CERTAIN PAYMENTS ON ACCOUNT OF BANK GUARANTEE COMMI SSION WERE MADE BY THE ASSESSEE TO VARIOUS BANKS ON WHICH NO TAX WAS DEDUC TED AS PER THE PROVISIONS OF SECTION 194H OF THE I.T. ACT. THE ASSESSING OFFICE R, THEREFORE, CONFRONTED THE SAME TO THE ASSESSEE. IT WAS SUBMITTED BY THE ASSE SSEE THAT THE PAYMENT OF COMMISSION TO ANY BANKING COMPANY IS EXEMPT FROM TD S U/S 194A(3)(III)(A) OF THE I.T. ACT. HOWEVER, THE ASSESSING OFFICER WAS N OT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND TREATED THE A SSESSEE AS AN ASSESSEE-IN- 3 ITA NO.5440/DEL/2015 ITA NO.1094/DEL/2017 DEFAULT AND PASSED THE ORDER U/S 201(1)/201(1A) BY RAISING THE FOLLOWING DEMANDS AS UNDER :- F.Y. A.Y. SHORT CHARGE U/S 201(1) INTEREST U/S 201(1A) TOTAL TAX LIABILITY 2010-11 2011-12 2,02,17,932 74,80,635 2,76,98,027 2011-12 2012-13 21,61,402 7,53,611 29,15,013 4. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO HELD THAT THE PROVISIONS OF SECTION 194H ARE NOT APPLICABLE IN PR INCIPAL TO PRINCIPAL TRANSACTIONS. WHILE DOING SO, HE RELIED ON THE DEC ISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. LIVING MEDIA LTD. VIDE ITA NO.1264 OF 2007 ORDER DATED 06.05.2008. HE FURTHER NOTED THAT THE SLP FILED BY THE REVENUE AGAINST THE SAID DECISION HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT. HE FURTHER NOTED THAT SIMILAR ISSUE HAD COME UP BEFORE HIM IN THE SISTER CONCERN OF THE GROUP NAMELY M/S JAYPEE SPORT PVT. LTD. WHEREIN HE HAD UPHELD THE PROPOSITION THAT THE BANK GUARANTEE COMMISSION BEIN G PRINCIPAL TO PRINCIPAL PAYMENT IS NOT FILING WITHIN THE PURVIEW OF SECTION 194H OF THE I.T. ACT. HE ALSO RELIED ON THE DECISION OF THE HONBLE ALLAHABA D HIGH COURT IN THE CASE OF JAGRAN PRAKASHAN LTD. VS. DCIT (TDS) REPORTED IN 34 5 ITR 288. 5. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE A SSESSING OFFICER. 4 ITA NO.5440/DEL/2015 ITA NO.1094/DEL/2017 7. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HA ND FILED A COPY OF THE DECISION OF THE TRIBUNAL IN THE CASE ACIT VS. JAPYE E SPORTS INTERNATIONAL LTD. AND ACIT VS. JAPYEE INFRATECH LTD. AND BATCH OF OTH ER APPEALS ORDER DATED 31.08.2017 AND SUBMITTED THAT UNDER IDENTICAL CIRCU MSTANCES THE TRIBUNAL IN THE CASE OF THE SISTER CONCERN OF THE ASSESSEE HAS HELD THAT BANK GUARANTEE COMMISSION IS NOT SUBJECT TO WITHHOLDING TAX U/S 19 4H AS IT DOES NOT FALL INTO CLAUSE (I) OF THE EXPLANATION (1) OF SECTION 194H O F THE I.T. ACT. HE ACCORDINGLY SUBMITTED THAT THIS BEING A COVERED MAT TER IN FAVOUR OF THE ASSESSEE, THE APPEALS FILED BY THE REVENUE SHOULD BE DISMISSE D. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THE ASSESSING OFFICER HELD THAT THE ASSESSEE IS LIABLE TO DEDUCT TAX U/S 194H ON ACCOUNT OF BANK GUARANTEE COMMISSION PAID TO VARIOUS BANKS. WE FIND THE LD. CIT(A) FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF LIVING MEDIA LTD. (SUPRA), THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF JAGRAN PRAKASHAN LTD. (SUPRA) AND HIS OWN ORDER IN THE CAS E OF M/S JAYPEE SPORT PVT. LTD. (SUPRA) DELETED THE DEMAND RAISED BY THE ASSES SING OFFICER ON THE GROUND THAT TAX WAS NOT DEDUCTIBLE AT SOURCE AGAINST PAYME NT OF BANK GUARANTEE COMMISSION TO BANKERS U/S 194H. WE FIND IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE SISTER CONCERN OF THE ASSESSEE, NAMELY, JAPYEE SPORTS INTERNATIONAL LTD. (SUPRA) AND JAPYEE INFRATECH LTD . (SUPRA). WE FIND THE 5 ITA NO.5440/DEL/2015 ITA NO.1094/DEL/2017 TRIBUNAL AT PARA 20 AND 21 OF THE ORDER HAS DISCUSS ED THE ISSUE AND HELD THAT BANK GUARANTEE COMMISSION IS NOT SUBJECT TO WITHHOL DING TAX U/S 194H. ACCORDINGLY, THE APPEAL FILED BY THE REVENUE ON THI S WAS DISMISSED. THE RELEVANT OBSERVATION OF THE TRIBUNAL AT PARA 20 AND 21 READS AS UNDER :- 20. GROUND NO.3 OF THE APPEAL OF THE ASSESSEE IS W ITH RESPECT TO DEDUCTION OF TAX AT SOURCE ON BANK GUARANTEE COMMISSION U/S 194H OF THE ACT. IN THE CASE BEFORE US THE LD. CIT(A) HAS HELD THAT ON BANK GUARANTEE COMM ISSION NO TAX IS REQUIRED TO BE DEDUCTED FOLLOWING THE DECISION OF HONBLE DELHI HI GH COURT IN CASE OF CIT VS. LIVING MEDIA INDIA LTD. DATED 06.05.2008. FURTHERM ORE, THE ASSESSEE IS ACTING NOT AS AN AGENT BUT ON PRINCIPLE-TO-PRINCIPLE BASIS. 21. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTI ONS AND WE ARE OF THE OPINION THAT THE BANK GUARANTEE COMMISSION IS NOT SUBJECT T O WITHHOLDING TAX U/S 194H OF THE ACT AS IT DOES NOT FALL INTO CLAUSE (I) OF THE EXPL ANATION OF SECTION 194H. IN VIEW OF THIS GROUND NO.3 OF THE APPEAL OF THE REVENUE IS DI SMISSED. 9. SINCE THE FACTS OF THE IMPUGNED APPEALS ARE IDEN TICAL TO THE FACTS OF THE CASE DECIDED BY THE TRIBUNAL IN THE CASE OF SISTER CONCERN OF THE ASSESSEE, THEREFORE, FOLLOWING THE DECISION OF THE TRIBUNAL C ITED (SUPRA) AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) DELETING THE DEMAND RAISED BY THE ASSESSING OFFICER IN THE ORDER PASSED U/S 201(1) AND 201(1A) OF THE I.T. ACT. THE GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY DISMISSED. 10. IN THE RESULT, BOTH THE APPEALS FILED BY THE RE VENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH JANUARY, 2018. SD/- SD/- (BEENA A. PILLAI) (R. K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 16-01-2018. SUJEET 6 ITA NO.5440/DEL/2015 ITA NO.1094/DEL/2017 COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI