REGAL SHOES (I) P LTD, MUMBAI V. ITO 5(3)(1), MUMBAI

ITA 5831/MUM/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6602 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2014
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 23-04-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 18-08-2011
• Court: TRIBUNAL
• Department Lawyers: VIDYA SAGAR R PATIL
• Assessee Lawyers: JITENDRA B SANGHAVI
• Keywords: Difference of opinion
• Section: 194C; 154

Judgement Text

D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIVEK VARMA , JM ./I.T.A. NO.5831/M/2011 ( / ASSESSMENT YEAR: 2007 - 2008 ) M/S. REGAL SHOES (I) PVT LTD., 36 A1 MEHRAB, 3 RD PEERKHAN STREET, NAGPADA, MUMBAI 400 008. / VS. INCOME TAX OFFICER, WARD 5(3)(1), AAYAKAR BHAVAN, 5 TH FLOOR, M.K. ROAD, MUMBAI 400 020. ./ PAN : AABCV 9451 E ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI JITENDRA B SANGHAVI / RESPONDENT BY : SHRI VIDYASAGAR R PATIL, DR / DATE OF HEARING : 23 .04.2014 / DATE OF PRONOUNCEMENT : 07 .05 .2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 18.8.2011 IS AGAINST THE ORDER OF THE CIT (A) - 9, MUMBAI DATED 16.6.2011 FOR THE ASSESSMENT YEAR 2007 - 2008. 2. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT IN THE PRESENT APPEAL, ASSESSEE RAISED 8 GROUNDS AND P RIMA FACIE, MOST OF THEM ARE ARGUMENTATIVE IN NATURE. FURTHER, HE MENTIONED THAT GROUND NO.1 & 2 ARE ONLY TO BE ADJUDICATED . FURTHER ALSO , LD COUNSEL MENTIONED THAT ADJUDICATION OF GROU ND NO.1 BECOMES ACADEMIC, IF THE GROUND NO.2 OF THIS APPEAL IS ALLOWED. ON HEARING THE PARTIES, TO START WITH, WE TAKE UP GROUND NO.2 FOR ADJUDICATION AND THE SAME READS AS UNDER: 2. THE CIT (A) OUGHT TO HAVE H ELD THAT THE PROVISIONS OF SECTION 40(IA) ARE INAPPLICABLE TO AMOUNTS PAID. THE CIT (A) OUGHT TO HAVE HELD THAT THE PROVISIONS OF SECTION 40(IA) WERE APPLICABLE ONLY TO AMOUNTS PAYABLE . 3. B EFORE US, SHRI JITENDRA B SANGHAVI, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE IMPUGNED ORDER OF THE AO WAS PASSED U/S 154 OF THE ACT AND THE ISSUE IS OF DEBATABLE IN NATURE. FURTHER, ON MERITS, HE MENTIONED THAT THE ASSESSEE MADE PAYMENTS OF LEASE SERVICE CHARGES AFTER MAKING TDS IN ACCORDANCE WITH THE PROVISI ONS OF SECTION 194C OF THE ACT . PER CONTRA , AO INVOKED THE PROVISIONS OF 2 SECTION 197 OF THE ACT AND DISALLOWED THE ENTIRE PAYMENT OF SERVICE CHARGES OF RS. 2,73,379/ - BY INVOKING THE PROVISIONS OF SE CTION 40(A)(IA) OF THE ACT. THUS, THE APPLICABILITY OF P ROVISIONS OF SECTION 194C OR SECTION 197 IS A MATTER OF DISPUTE AND DEBATE. BUT THE FACT IS TH AT THE ASSESSEE MADE THE TDS AS PER SECTION 194C AND , THEREFORE, AT THE MAXIMUM, IT IS A CASE OF MAKING SHORT TDS. IN SUCH CASE, PROVISIONS OF SECTION 40(A)(IA) CANNOT BE INVOKED CONSIDERING VARIOUS JUDICIAL DECISIONS I.E., (I) JUDGMENT OF HONBLE KOLKATA HIGH COURT IN THE CASE OF CIT VS. S.K. TEKRIWAL VIDE ITA NO.183 OF 2012, GA NO.2069 OF 2012; (II) DECISION OF THE ITAT, KOLKATA BENCH IN THE CASE OF DCIT VS. TE KRIWAL [2011] 48 SOT 515/15, TAXMANN.COM 289; (III) DECISION OF THE ITAT, MUMBAI IN THE CASE OF DCIT VS. CHANDABHOY & JASSOBHOY [2012] 17 TAXMANN.COM 158; (IV) DECISION OF THE TRIBUNAL IN THE CASE OF EGS SURVEY PRIVATE LIMITED VS. ITO VIDE ITA NO.6281/M/20 11 AND OTHERS. 4. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE DECISIONS CITED BEFORE US. ON PERUSAL OF THE CITED JUDGMENT OF THE HON BLE HIGH COURT OF KOLKATA IN THE CASE OF M/S. S.K. TEKRIWAL (SUPRA), WE FIND THE SAME IS RELEVANT FOR THE PROPOSITION THAT WITH REGARD TO THE SHORTFALL, IT CANNOT BE ASSUMED THAT THERE IS A DEFAULT AS THE DEDUCTION IS NOT AS REQUIRED BY OR UNDER T HE ACT, BUT THE FACTS IN THAT THIS EXPRESSION, ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII - B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION HAS NOT BEEN PAID ON OR BEFORE THE DUE DATE SPECIFIED IN SUB - SECTION (1) OF SECTION 139. THIS SECTION 40(A)(IA) OF THE ACT REFERS ONLY TO THE DUTY TO DEDUCT TAX AND PAY TO GOVERNMENT ACCOUNT. IF THERE IS ANY SHORTFALL DUE TO ANY DIFFERENCE OF OPINION AS TO THE TAXABILITY OF ANY ITEM OR THE NATURE OF PAYMENTS FALLING UNDER VARIOUS TDS PROVISIONS, THE ASSESSEE CAN BE DECLARED TO BE AN ASSESSEE DEFAULT U/S 201 OF THE ACT AND NO DISALLOWANCE CAN BE MADE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. CONSIDERING THE ABOVE SETTLED NATURE OF THE ISSUE, GROUND NO.2 RAISED BY THE ASSESSEE IS DECI DED IN FAVOUR OF THE ASSESSEE. ACCORDINGLY, GROUND NO.2 IS ALLOWED . 6. SINCE, THE GROUND NO.2 IS ALLOWED IN FAVOUR OF THE ASSESSEE, TH EREFORE, THE ADJUDICATION OF GROUND NO.1 BECOMES ACADEMIC. ACCORDINGLY, GROUND NO.1 IS 3 DISMISSED AS ACADEMIC. REST OF THE GROUNDS NO. 3 TO 8 ARE DISMISSED AS ARGUMENTATIVE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DECIDED IN THE ABOVE MENTIONED MANNER. ORDER PRONOUNCED IN THE OPEN COURT ON 0 7 T H M A Y , 2014. S D / - S D / - ( VIVEK VARMA ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 0 7 . 0 5 .2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI