M/s Ice Global Limited, Ludhiana V. Addl. CIT, Ludhiana

ITA 61/CHANDI/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60905 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-06-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 18-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI H.L. KARWA, VP AND SHRI T.R. SOOD, AM ITA NO. 61/CHD/2012 ASSESSMENT YEAR: 2006-07 M/S ICE GLOBAL LTD. V ADDL CIT, RANGE VII (NOW ABHISHEK CORPORATE LUDHIANA SERVICES LTD.) 85, INDUSTRIAL AREA A LUDHIANA AABCI 3067 P (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ASHWANI KUMAR RESPONDENT BY: SHRI AKHILESH GUPTA DATE OF HEARING: 28.06.2012 DATE OF PRONOUNCEMENT: 29.06.2012 ORDER PER T.R. SOOD, A.M IN THIS APPEAL THE ASSESSEE HAS RAISED TWO GROUNDS OUT OF WHICH GROUND NO.2 WAS NOT PRESSED AND THEREFORE, THE SAME IS DI SMISSED AS NOT PRESSED. 2. GROUND NO. 1 READS AS UNDER:- 1 THAT ORDER PASSED U/S 250(6) OF INCOME-TAX ACT, 1961 IN THE CASE OF THE APPELLANT BY THE LD. CIT(A)-II IS AGAINST LAW AND F ACS ON THE FILE IN AS MUCH HE WAS NOT JUSTIFIED TO ARBITRARILY UPHOLD THE ADDITIO N OF RS. 7,04,950/- ON ACCOUNT OF ALLEGED PROFIT ON UN-RECONCILED RECEIPTS. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHOWN RECEIPTS AMOUNTING TO RS. 13,13,39,960/- AS PER DET AILED BELOW: I) OPERATING INCOME (RECEIPTS) RS. 11,81,73,679/- II) SERVICES PROVIDED AS ON DATE OF COST (PENDING BILLS TO BE RAISED) RS. 1,30,95,767/- III) OTHER INCOME RS. 70,514/- TOTAL RS. 13,13,39,960/- HOWEVER, IT WAS FURTHER NOTED THAT TOTAL TDS WAS AM OUNTING TO RS. 22,95,656/-. ON THAT BASIS CONTRACT RECEIPTS AMOUNTED TO RS. 14, 00,81,379/-. THE ASSESSEE WAS ASKED TO EXPLAIN THE DISCREPANCY. THE ASSESSEE VIDE LETTER DATED 4.12.2008 REPLIED AS UNDER: 2 REGARDING YOUR HONOUR QUERY THAT ABHISHEK INDUSTRY LTD HAS DEDUCTION TDS OF RS. 22,95,656/- ON PAYMENT OF 14,00,81,379/- WHE REAS THE OPERATING INCOME IS SHOWN IN PROFIT AND LOSS ACCOUNT AT RS. 11,81,73 ,679/-, IT IS SUBMITTED THAT IN ADDITION TO THE OPERATING INCOME OF RS. 11,81,73,67 9/- A SUM OF RS. 1,30,95,767/- HAS ALSO BEEN SHOWN ON ACCOUNT OF SE RVICES PROVIDED TILL 31.3.2006 PENDING BILLS TO BE RAISED THUS TO TOTAL INCOME SHOWN COMES TO RS. 13,12,69,446/- AND THE DIFFERENCE IS DUE TO THE FAC T THAT ABHISHEK INDUSTRIES LTD HAS DEDUCTION TDS ON THE BILLS RAISED BY M/S ICE GL OBAL LTD AS WELL AS ON SOME OF THE ADVANCE PAYMENTS MADE BY ABHISHEK LTD T O ICE GLOBAL LTD. FROM TIME TO TIME WHICH WAS ULTIMATELY ADJUSTED AGAINST THE BILLS RESULTING IN EXCESS DEDUCTION OF TDS DUE TO DOUBLE DEDUCTING OF TDS IN SOME CASE I.E. ON THE BILLS AS WELL AS ON THE ADVANCE PAYMENTS. FURTHER THE DE TAIL OF TDS DEDUCTED ON THE BILLS AND ADVANCE PAYMENTS IS ENCLOSED HEREWITH . THE ASSESSING OFFICER IN ORDER TO VERIFY MADE QUERY WITH ABHISHEK INDUSTRIES, LUDHIANA WHO GAVE DETAILS OF PAYMENTS AND TDS AS UN DER:- I) ABHISHEK INDUSTRIES LTD (TERRY TOWEL DIVISION) PAYMENTS 5,47,99,628/- TDS 8,58,341 II) -DO- (PAPER & CHEMICAL DIVISION) 2,70,85,109/- 3,71,372/- III) -DO- (YARN DIVISION 5,81,96,642/- 10,65,943/- TOTAL 14,00,81,379/- 22,95,656/- THEREFORE, THE ASSESSEE WAS ASKED TO RECONCILE THE DIFFERENCES. IT WAS SUBMITTED THAT THE TDS OF RS. 22,95,656/- WAS DEDUC TED BY ABHISHEK INDUSTRIES LTD ON PAYMENT OF RS. 14.01 CRORES WHEREAS THE ASSE SSEE HAS RAISED BILLS OF RS. 13,02 CRORES OUT OF WHICH A SUM OF RS. 1.21 CRO RES WAS FOR SERVICES FOR WHICH BILLS FOR EACH WERE PENDING. IT WAS FURTHER SUBMITTED THAT ABHISHEK INDUSTRIES LTD WAS TO DEDUCT TDS ONLY OF RS. 13.79 CRORES WHEREAS TDS WAS DEDUCTED AT RS. 14,01 CRORES AND THEREFORE, AT BES T THE DIFFERENCE WAS ONLY 0.22 CRORES. THESE SUBMISSIONS WERE NOT ACCEPTED B Y THE ASSESSING OFFICER BECAUSE THE ASSESSEE HAS SHOWN RECEIPTS OF RS. 13,1 2,69,446/- WHEREAS BILLS OF RS. 14,00,81,379/- WERE ISSUED AND DIFFERENCE WA S RS. 88,11,873/-. ON THIS DIFFERENCE THE ASSESSING OFFICER APPLIED NP RATE OF 8% AND MADE AN ADDITION OF RS. 7,04,950/-. 4. THE ASSESSEE COULD NOT IMPROVE UPON HIS CASE BEF ORE THE LD. CIT(A) AND CONFIRMED THE ACTION OF THE ASSESSING OFFICER AND H ENCE THIS APPEAL BEFORE US. 5. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE REFER RED TO PAGE 24 TO 30 WHICH IS A COPY OF ACCOUNTS WITH ABHISHEK INDUSTRIE S. IT WAS POINTED OUT THAT 3 THE ASSESSEE WAS DOING BUSINESS WITH THREE DIVISION S OF THIS COMPANY. IT WAS CONTENDED THAT NORMALLY THE TDS WAS BEING DEDUCTED ON PAYMENT BASIS BUT IN SOME CASES TDS WAS DEDUCTED ON BILLS ALSO AND IN TH IS REGARD HE CITED THE FOLLOWING EXAMPLES AT PAGE 25 OF THE PAPER BOOK:- 28.10.2005 BILL NO. 52 DATED 21.10.2005 DEBIT 57,543 TDS DEDUCTION 1171 28.10.2005 BILL NO. 56 DATED 26.10.2005 20,474 418 28.10.2005 BILL NO. 60 DATED 26.10.2005 1,118,898 8450 31.10.2005 BILL NO. 63 DATED 18.10.2005 5,51,901 11,239 HE ARGUED THAT THIS MAKES IT CLEAR THAT IN SOME CAS ES TDS HAS BEEN DEDUCTED ON PAYMENT BASIS OF BILLS. THUS DOUBLE DEDUCTION H AS BEEN MADE AND THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS SHOWN LOWER RECEIPTS. 6. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE S UBMITTED THAT AS PER SECTION 199 OF THE ACT, THE ASSESSEE IS ALLOWED TO CLAIM ONLY THOSE AMOUNTS OF TDS AGAINST WHICH THE RECEIPTS HAVE BEEN SHOWN. TH EREFORE, ONCE THE ASSESSEE WAS CLAIMING TDS OF RS. 22,95,656/- THEN T HE ASSESSEE WAS REQUIRED TO SHOW FULL RECEIPTS ALSO. 7. AFTER HEARING BOTH THE PARTIES WE FIND THAT THER E IS A PROBLEM OF RECONCILIATION. NO DOUBT AS PER SECTION 199 THE AS SESSEE CAN CLAIM THAT MUCH OF TDS AGAINST WHICH THE RECEIPTS HAVE BEEN SHOWN, HOWEVER, IF THE TDS IS DEDUCTED TWICE ONCE ON THE BASIS OF BILL AND AGAIN ON THE BASIS OF PAYMENT THEN THE ASSESSEE CAN NOT BE HELD TO BE IN DEFAULT. THE REFORE, IN THE INTEREST OF JUSTICE, THE FIGURES SHOWN BY THE ASSESSEE AND AS F OUND BY THE ASSESSING OFFICER NEEDS RECONCILIATION AFTER FURTHER ENQUIRIE S WITH ABHISHEK INDUSTRIES. THEREFORE, IN THE INTEREST OF JUSTICE WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF ASSESSING OFFI CER WITH A DIRECTION TO VERIFY THE CONTENTION WHETHER THE TDS HAVE BEEN DEDUCTED T WICE. THE ASSESSING OFFICER SHOULD MAKE FURTHER ENQUIRIES AND TRY TO OB TAIN THE DETAILS FROM 4 ABHISHEK INDUSTRIES AND ONLY AFTER THAT THE ISSUE S HOULD BE DECIDED IN ACCORDANCE WITH LAW. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 29.6. 2012 SD/- SD/- (H.L. KARWA) (T.R. SOOD) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 29.6.2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/ THE DR 5