SWATI TESTILES PRIVATE LIMITED , MUMBAI V. INCOME TAX OFFICER, W-13(2) (4), MUMBAI

ITA 5863/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8717 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 11-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR MENON
• Keywords: Rectification of order; TDS; Capital Gains; FORM 26AS
• Section: 143(3); 142(1); 80HHC; 250; 143(2); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 5863/MUM/2019 (A.Y: 2014-15) SWATI TEXTILES PVT LTD., SHOP NO. 4, NARENDRA APT CHS LTD., SB PATIL MARG, KHAR WEST, MUMBAI 400052. VS. ITO 13(2)(4) RM NO. 146B, 1 ST FLOOR, AAYAKAR BHAVAN, MK ROAD, MUMBAI. PAN/GIR NO. : AAACS6273J APPELLANT .. RESPONDENT APPELLANT BY : SHRI ABHISHEK JHUNJHUNWALA, AR RESPONDENT BY : SHRI VIJAY KUMAR MENON, DR DATE OF HEARING 11 .0 3 .2021 DATE OF PRONOUNCEMENT 23 .0 3 .2021 / O R D E R PER PAVAN KUMAR GADALE JM: THE APPEAL IS FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 21, MUMB AI, PASSED U/S.154 AND 250 OF THE INCOME TAX ACT., 1961 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1.0 ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF LD. AO WHER EIN THE CREDIT OF TDS U/S 194IA OF RS. 3,00,000/- HAD NOT B EEN ALLOWED THOUGH CORRESPONDING INCOME HAD BEEN CONSID ERED FOR TAX. ITA NO. 5863/MUM/2019 SWATI TEXTILES PVT LTD., MUMBAI - 2 - 2.0 THE LD. CIT(A), BEFORE DISALLOWING THE APPELLA NTS CLAIM OF TDS OF RS. 3,00,000/-, OUGHT TO HAVE CONSIDERED THE UNDERSTAND VITAL FACTS, BEING; A. THE CORRESPONDING INCOME ON SALE OF IMMOVABLE P ROPERTY MADE OF RS. 3,00,00,000/- ON WHICH TDS @ 1% IS DEDU CTED OF RS. 3,00,000/- HAD BEEN CONSIDERED FOR TAXATION; B. THE TDS CERTIFICATE IN FOR 26QB, TDS CHALLAN PA ID BY THE DEDUCTOR AND 26AS STATEMENTS HAD BEEN FILED ON RECO RD; C. THE APPELLANT HAD CLAIMED THE CREDIT OF DISPUTE D TDS IN MANUAL RETURN FILED ON 15.03.2017 AND IN THE E-RETU RN U/S. 148 FILED ON 14.07.2017. 2. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESS EE COMPANY IS ENGAGED IN THE BUSINESS OF TRADING OF VE HICLES. SINCE, THE RETURN OF INCOME WAS NOT FILED AND THE N OTICE U/SEC148 OF THE ACT WAS ISSUED BY THE A.O. THE INCO ME TAX DEPARTMENT HAS RECEIVED THE INFORMATION THAT TH E ASSESSEE HAS SOLD PROPERTY FOR RS.6CRORES IN THE F. Y 2013-14. THE A.O OBSERVED THAT THE ASSESSEE HAS FAI LED TO FILE THE RETURN OF INCOME AND HAS THE REASON TO BEL IEVE THAT THE INCOME HAS ESCAPED ASSESSMENT AND THEREFOR E NOTICE U/S 148 OF THE ACT WAS ISSUED. IN RESPONSE T O THE NOTICE, THE LD. AR OF THE ASSESSEE APPEARED FROM TI ME TO TIME AND SUBMITTED THE COPY OF THE INCOME TAX RETUR N ALONG WITH AUDITED FINANCIAL STATEMENTS. THE ASSESS EE COMPANY HAS FILED THE OBJECTIONS ON THE REASONS REC ORDED FOR REOPENING OF THE ASSESSMENT AND WERE DISPOSED O FF. FURTHER, THE NOTICE U/S 143(2) AND 142(1) OF THE AC T ALONG ITA NO. 5863/MUM/2019 SWATI TEXTILES PVT LTD., MUMBAI - 3 - WITH QUESTIONNAIRE WAS ISSUED. WHEREAS, THE A.O HAS CALLED FOR THE DETAILS OF IMMOVABLE PROPERTY AND TH E ASSESSEE HAS FILED THE COPY OF AGREEMENT OF ASSIGNM ENT CUM-SALE DATED 19.09.2013 AND THE COPY OF DEED OF ASSIGNMENT DATED 26.11.2013 IN RESPECT OF SALE OF PROPERTY. THE ASSESSEE ALSO FILED THE EXPLANATIONS ON 10.08.2018 REFERRED AT PARA 9 OF THE ASSESSMENT ORD ER. THE A.O FOUND THAT THE ASSESSEE HAS EXECUTED PROVIS IONAL AGREEMENT OF SALE OF RS. 3 CRORES ON THE BUYER AND THERE AFTER SALE DEED WAS EXECUTED ON 28-11-2013 FOR THE SAME AMOUNT. FURTHER THE A.O. HAS THAT OBSERVED BOTH THE DEEDS RELATE TO ONLY ONE PROPERTY OF RS 3 CRORES AN D NOT RS 6 CRORES AS REPORTED IN THE ITD-CIB SYSTEM. THE A.O. COMPUTED THE TOTAL INCOME OF RS.(-)7,35,675/- AND P ASSED THE ORDER U/S 143(3) R.W.S 147 OF THE ACT DATED 17.10.2017. THE ASSESSEE HAS FILED THE RECTIFICATIO N PETITION U/SEC154 OF THE ACT FOR CLAIM OF TDS DEDUC TED U/SEC194IA OF THE ACT BY THE PURCHASER OF THE PROPE RTY. BUT THE ASSESSING OFFICER HAS REJECTED THE CLAIM BY OBSERVING THAT THE ASSESSEE HAS MADE A CLAIM IN THE RETURN OF INCOME FILED IN RESPONSE TO THE NOTICE U/ SEC148 OF THE ACT AND PASSED THE ORDER ON 18-05-2018. 3. AGGRIEVED BY THE RECTIFICATION ORDER, THE ASSESS EE HAS FILED AN APPEAL WITH THE CIT(A). THE GRIEVANCE OF T HE ASSESSEE IS THAT THE A.O HAS ERRED IN REJECTING THE ITA NO. 5863/MUM/2019 SWATI TEXTILES PVT LTD., MUMBAI - 4 - APPLICATION UNDER 154 OF THE ACT IN NOT ALLOWING TH E CREDIT OF TDS U/S 194IA RS. 3 LAKHS CORRESPONDING TO THE R ECEIPT OF SALE CONSIDERATION DISCLOSED IN THE ASSESSMENT O RDER. WHEREAS, THE CIT(A) HAS DEALT ON THE FACTS AND THE SUBMISSIONS AND UPHELD THE ACTION OF THE ASSESSING OFFICER AND DISMISSED THE APPEAL. AGGRIEVED BY THE CIT(A) ORDER, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE HONBLE TRIBUNAL. 4. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESS EE SUBMITTED THAT THE A.O AND THE CIT(A) HAS ERRED I N REJECTING THE TDS CLAIM OF RS. 3 LAKHS U/S 194IA OF THE ACT .WHEREAS, THE ASSESSEE HAS DISCLOSED THE INCOME FROM CAPITAL GAINS AND TDS CREDIT IN THE RETURN OF INC OME . FURTHER,THE FORM NO 26QB, TDS CHALLAN PAID BY THE DEDUCTOR IS FILED AND THE TDS IS REFLECTED IN THE F ORM 26AS OF THE ASSESSEE AND PRAYED FOR ALLOWING THE A PPEAL. CONTRA, THE LD. DR SUPPORTED THE ORDER OF THE CIT(A ). 5. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLE CRUX OF THE DISPUTED I SSUE AS ENVISAGED BY THE LD.AR IS WITH RESPECT OF GRANTING OF CREDIT OF TDS OF RS. 3 LAKHS U/S 194IA OF THE ACT. THE LD.AR SUBMISSIONS ARE THAT THE PURCHASER HAS DEDUCT ED THE TDS @1% AND HAS DEPOSITED IN THE GOVT ACCOUNT A ND ISSUED TDS CERTIFICATE. THE LD. AR REFERRED TO THE PAPER ITA NO. 5863/MUM/2019 SWATI TEXTILES PVT LTD., MUMBAI - 5 - BOOK AT PAGE 1 WHERE FORM NO 26QB IS FILED AND AL SO FORM 26AS OF THE ASSESSEE, WERE RS 3 LAKHS DEDUCTED BY THE M/S BHAVNA AUTOPURE INFRA PVT LTD IS REFLECTED. THE LD.AR CONTENTIONS ARE THAT, THE ASSESSEE IN ENTITLE D FOR THE TDS CREDIT IRRESPECTIVE OF THE FACTS THAT IT WA S CLAIMED IN THE RETURN OF INCOME FILED U/SEC148 OF THE ACT AND THE LD.AR RELIED ON THE FALLOWING JUDICIAL DECISIONS : 1. CIT VS. PRUTHVI BROKERS & SHAREHOLDERS, 23 TAXMANN.COM 23 (BOM). 2. CIT VS. VALI BROTHERS, 149 TAXMAN 233 (ALBD). 3. BALRAM KAPOOR VS. ITO, 35 ITD 1 (NAG). 4. VASCO SALES & MARKETING CORP VS. DCIT, 34 TAXMANN.COM 229 (KER). 5. INDGLONAL INVESTMENT & FINANCE LTD., 12 TAXMANN. COM 108 (DEL). 6. WE FOUND THE HONBLE ALLAHABAD HIGH COURT IN TH E CASE OF CIT VS VALI BROTHERS (SUPRA) HAS HELD AS UN DER: SECTION 237, R.W.S 148, OF THE ACT REFUNDS GEN ERAL ASSESSMENT YEAR 1989-90 PURSUANT TO NOTICE U/S 14 8 ASSESSEE FILED ITS RETURN OF INCOME AND CLAIMED REF UND OF AMOUNT DEPOSITED BY IT TOWARDS ADVANCE TAX AO FOU ND THAT TOTAL INCOME WAS DEDUCTABLE U/S 80HHC AND THERE WAS NO ESCAPEMENT OF INCOME AND THEREFORE HE DROPPED PROCE EDINGS, BUT DID NOT REFUND AMOUNT CLAIMED BY ASSESSEE WHE THER ORDER FOR DROPPING PROCEEDINGS AMOUNTED TO ORDER OF ASSESSMENT IN PURSUANCE OF RETURN FILED PURSUANT TO NOTICE U/S 148 HELD, YES WHETHER, THEREFORE, ASSESSEE WOUL D BE ITA NO. 5863/MUM/2019 SWATI TEXTILES PVT LTD., MUMBAI - 6 - ENTITLED TO REFUND OF EXCESS AMOUNT DEPOSITED TOWAR DS ADVANCE TAX HELD, YES. 7.CONSIDERING THE JUDICIAL DECISIONS AND THE PROVIS IONS OF LAW. WE ARE OF THE OPINION THAT THOUGH THE ASSESSEE HAS CLAIMED TDS CREDIT IN THE RETURN OF INCOME FILED MANUALLY AND ELECTRONICALLY IN RESPONSE TO NOTICE U/SEC148 OF THE ACT, THE TDS CREDIT CANNOT BE DENIE D AS THE A.O. IN ASSESSMENT ORDER HAS CONSIDERED THE TOT AL SALE CONSIDERATION UNDER INCOME FROM CAPITAL GAINS WHICH IS NOT DISPUTED. ACCORDINGLY, WE CONSIDERING THE OV ERALL FACTS AND THE JUDICIAL DECISIONS DIRECT THE ASSESS ING OFFICER TO GRANT THE TDS CREDIT TO THE ASSESSEE AFT ER VERIFICATION AND EXAMINATION OF THE TDS CERTIFICATE , FORM 26AS AND THE CHALLAN AND ALLOW THE GROUNDS OF APPEA L OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.03.2021 SD/- SD/- (S RIFAUR RAHMAN) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 23.03.2021 KRK, PS ITA NO. 5863/MUM/2019 SWATI TEXTILES PVT LTD., MUMBAI - 7 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) 4. ( ) / CONCERNED CIT 5. !!' , $ % , / DR, ITAT, MUMBAI 6. () * + / GUARD FILE. / BY ORDER, ! //TRUE COPY// 1. ( ASST. REGISTRAR) ITAT, MUMBAI