Astt. Commissioner of Income Tax (TDS), Kanpur V. M/s RSPL Ltd., Kanpur

ITA 620/LKW/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4027 (ITAT-LUCKNOW)
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-08-2016
• Assessment Year: 2013-2014
• Appeal Filed On: 10-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI. P . K. BANSAL , ACCOUNTANT MEMBER AND SHRI ABY T VARKEY , JUDICIAL MEMBER ITA NO. 620/LKW/2015 ASSESSMENT YEAR: 2013 - 14 ASSTT. CIT (TDS) KANPUR V. M/S RSPL LTD. PLOT NO.119, 120, 121 P&T KALPI ROAD, FAZALGANJ KANPUR T AN /PAN : AADCS7820A (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI AMIT NIGAM, D.R. RESPONDENT BY: SHRI P. K. KAPOOR, C.A. DATE OF HEARING: 10 08 2016 DATE OF PRONOUNCEMENT: 30 08 2016 PER ABY T VARKEY, J.M : O R D E R THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) - II, KANPUR DATED 28.5.2015 FOR THE ASSESSMENT YEAR 2013 - 14. 2 . GROUND NO.1 IS AGAINST THE DELETION OF DEMAND RAISED ON ACCOUNT OF NOT MAKING TDS ON THE PAYMENTS OF RE NT AMOUNTING TO RS.56,12,699/ - . 3 . THE BRIEF FACTS OF THE CASE ARE THAT TDS SURVEY WAS CONDUCTED ON 12.9.2013 AND THE ASSESSEE WAS ASKED TO SUBMIT VARIOUS DOCUMENTS REGARDING TDS DEDUCTED UNDER VARIOUS HEADS AND DEPOSITED IN THE GOVERNMENT ACCOUNT. AFTER GOI NG THROUGH THE REPLIES AND RECORDS, THE ASSESSING OFFICER PASS ED AN ORDER DATED 20.11.2014. T HEREAFTER THE ASSESSEE HAD FILED AN APPLICATION UNDER SECTION 154 OF THE INCOME - TAX [ ITA NO.620/LKW/2015, A.Y. 2013 - 14 ] 2 ACT, 1961 (HEREINAFTER REFERRED IN SHORT 'THE ACT') AND THE ASSESSING OFFICER AFTER GOING THROUGH THE RECORDS RECTIFIED THE ORDER VIDE ORDER DATED 20.2.2015 AND BROUGHT DOWN THE ORIGINAL DEMAND OF RS.7,88,74,551/ - TO RS.24,99,574/ - , AGAINST WHICH THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO PARTLY ALLO W THE APPEAL OF THE ASSESSEE. 4 . IN RESPECT TO THE RENT EXPENSES , WHICH IS GROUND NO.1 OF THE INSTANT APPEAL, THE ASSESSING OFFICER WAS OF THE VIEW THAT RENT ON WHICH TAXES WAS NOT DEDUCTED AMOUNTED TO RS.56,12,698/ - AND MADE DEMAND FOR THE SAME. AGGRIEVED, THE ASSESSEE MOVED AN APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO DELETE THE SAME. AGGRIEVED, BY THE SAID ORDER OF THE LD. CIT(A), THE REVENUE IS BEFORE US. 5 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD. WE TAKE NOTE THAT THE ASSESSING OFFIC ER TOOK NOTE THAT THE ASSESSEE HAS NOT DEDUCTED TDS ON RENT EXPENSES AMOUNTING TO RS.56,11,819/ - AND THEREFORE TDS LIABILITY @ 10% ON THE RENT EXPENSES , WHICH COMES TO RS.5,61,182/ - AND INTEREST OF RS.2,86,144/ - ON IT WAS CALCULATED BY THE ASSESSING OFFICE R AND DEMAND OF RS.8,47,327/ - ( RS. 5,61,144 + RS.2,86,183) WAS RAISED AGAINST THE ASSESSEE. THE CONTENTION OF THE ASSESSEE WAS THAT IT HAS MADE PAYMENT TO WARDS RENT TO VAR IOUS PERSONS WHICH DID NOT EXCEED RS.1.80 LAKHS PER ANNUM AND SUBMITTED A LIST OF AL L THE RENT PAYMENTS MADE TO VARIOUS PERSONS WHICH HA VE BEEN REPRODUCED BY THE LD. CIT(A) AT PAGES 9 & 10 OF THE IMPUGNED ORDER. THE LD. CIT(A) HAS GONE THROUGH THE LIST AND HAS MADE A FINDING THAT THESE INDIVIDUALS , TO WHOM RENT HAS BEEN PAID BY THE ASSES SEE , HAS NOT EXCEEDED RS.1.80 LAKHS, THEREFORE, HE HAS HELD THAT THERE WAS NO LIABILITY FOR THE ASSESSEE TO DEDUCT TDS UNDER SECTION 194 - I OF THE ACT. THE LD. A.R. OF THE ASSESSEE ALSO TOOK OUR ATTENTION TO THE IMPUGNED [ ITA NO.620/LKW/2015, A.Y. 2013 - 14 ] 3 ORDER OF THE LD. CIT(A) WHEREIN THE LD. CIT(A) HAS NOTED THE FACT THAT THESE RENT PAYMENTS WERE CONTINUATION OF THE EARLIER RENTAL AGREEMENTS AND THE ASSESSEE HAD BEEN PAYING RENT TO THESE PERSONS BEFOREHAND ITSELF. IN SUCH A SCENARIO AND AFTER GOING THROUGH THE LIS T OF THE PERSONS TO WHOM RENT H AS BEEN MADE, WE CONCUR WITH THE LD. CIT(A) THAT THIS IS NOT A FIT CASE FOR TDS UNDER SECTION 194 - I OF THE ACT BECAUSE RENT PAYME NTS TO INDIVIDUALS HAS NOT EXCEED ED RS.1.80 LAKHS PER ANNUM . THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDE R PASS ED BY THE LD. CIT(A) AND WE DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 6 . GROUND NO.2 IS IN RESPECT TO THE DELETION OF DEMAND RAISED BY THE ASSESSING OFFICER ON ACCOUNT OF NOT MAKING TCS ON THE SALE OF SCRAP. 7 . THE BRIEF FACTS OF THE CASE ARE THAT UNDER THE HEAD TCS ON SCRAP SALES , THE ASSESSING OFFICER HAS RAISED TOTAL DEMAND OF RS.93,742/ - WHICH INCLUDES INTEREST OF RS.31,570/ - . ACCORDING TO THE ASSESSING OFFICER , THE ASSESSEE HAS MADE SHORT COLLECTION OF TCS OF RS.51,902/ - AND THEREFORE HE WORKED OUT INTE REST ON IT AT RS.31,570/ - , THUS MAKING A TOTAL DEMAND OF RS.93,472/ - . BEFORE THE LD. CIT(A) , IT WAS POINTED OUT THAT THE ASSESSEE IN FACT HAS COLLECTED TCS AT RS.1,11,261/ - WHICH PERTAIN TO SALE OF MANUFACTURED SCRAP OF RS.1,11,26,137/ - AND THAT THE ASSES SEE HAS NOT AVOIDED COLLECTION OF TCS ON SALE OF MANUFACTURED SCRAP. IT WAS BROUGHT TO THE KNOWLEDGE OF THE LD. CIT(A) THAT THE ASSESSING OFFICER HAS MISTAKENLY TAKEN THE CLOSING STOCK OF SCRAP AMOUNTING TO RS.1,73,16,976/ - FOR THE PURPOSE OF LIABILITY OF COLLECTION OF TCS AND THUS HAS MADE WRONG DEMAND. THE LD. CIT(A) HAS APPRECIATED THE CONTENTIONS OF THE ASSESSEE AND HAS FOUND THAT THE ASSESSING OFFICER HAS ERRED IN CALCULATING THE TCS LIABILITY OF THE ASSESSEE ON THE CLOSING STOCK OF SCRAP OF RS.1,73, 16,976/ - AND WAS [ ITA NO.620/LKW/2015, A.Y. 2013 - 14 ] 4 PLEASED TO DELETE THE ADDITION. AGGRIEVED BY THE SAID DECISION OF THE LD. CIT(A), THE REVENUE IS BEFORE US. 8 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD. WE TAKE NOTE THAT FOR THE SALE OF MANUFACTURED SCRAP OF RS.1,11,26,137/ - T HE ASSESSEE HAS COLLECTED TCS OF RS.1,11,261/ - AND HAS BEEN COLLECTING TCS ON SALE OF MANUFACTURED SCRAP. HOWEVER, THE ASSESSING OFFICER ERRED IN TAKING THE CLOSING STOCK OF SCRAP IN ORDER TO CALCULATE TCS LIABILITY OF THE ASSESSEE WHICH IS PER SE ILLEGAL AND THEREFORE THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. WE CONCUR WITH THE VIEW OF THE LD. CIT(A) AND SUSTAIN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE . 9 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOU NCED IN THE OPEN COURT ON 30.8.2016. SD/ - SD/ - [P. K. BANSAL ] [ ABY T VARKEY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH 1 . APPELLANT AUGUST , 2016 JJ: 1708 COPY FORWARDED TO: 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR