ACIT 2 (1), Ujjain V. M/s Phalodi Construction Company Nersigarh, Nersigarh

ITA 657/Ind/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4032 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-01-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 17-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V J BORICHA
• Keywords: TDS
• Section: 148; 143(3); 40(a)(ia); 201(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO.657/IND/2017 ASSESSMENT YEAR: 2007-08 ACIT-2(1) UJJAIN / VS. M/S. PHALOUDI CONSTRUCTION COMPANY, NERSINGARH RAJGARH ( REVENUE ) ( RE SPONDENT ) PAN: AAFFP9523Q REVENUE BY SHRI V.J. BORICHA, SR. DR RESPONDENT BY NONE DATE OF HEARING: 24.01.2019 DATE OF PRONOUNCEMENT: 06. 02.2019 / O R D E R PER MANISH BORAD, A.M: THIS APPEAL BY REVENUE PERTAINING TO A.Y. 2007-08 IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INC OME TAX(APPEALS)- UJJAIN, (IN SHORT CIT(A)), DATED 04.0 7.2017 WHICH IS ARISING OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT 1961(HEREINAFTER CALLED AS THE ACT) FRAMED ON M/S. PHALOUDI CONSTRUCTION CO. ITANO.657/IND/2017 2 31.01.2013 BY DCIT, 2(1), UJJAIN. THE REVENUE HAS RAIS ED FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS .9,97,515/- ON ACCOUNT OF SHORT DEDUCTION OF TDS BASED ON PROVI SO 2 TO SECTION 40(A)(IA) WHICH WAS INTRODUCED ONLY FROM 01.04.2013. 2. NONE APPEARED ON BEHEST OF ASSESSEE EVEN THOUGH THE NOTICE OF HEARING WAS DULY SERVED UPON IT. IT WAS THER EFORE, DECIDED TO HEAR THIS APPEAL WITH THE ASSISTANCE OF THE LD. DEPARTMENTAL REPRESENTATIVE AND DOCUMENTS AVAILABLE ON RECORDS. 3. BRIEF FACTS AS CULLED OUT FROM THE RECORDS ARE, TH AT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN CIVIL CONTRACT OR WORK. INCOME OF RS.57,56,110/- WAS DECLARED IN E-RETU RN OF INCOME FILED ON 24.10.2007. CASE WAS SELECTED FOR SCR UTINY THROUGH CASS. NOTICE U/S 143(2) OF THE ACT DULY SER VED UPON THE ASSESSEE. THE ORIGINAL ASSESSMENT WAS COMPLETE D U/S 143(3) VIDE ORDER DATED 24.11.2009 ON A TOTAL INCO ME OF RS.63,21,163/-. SUBSEQUENTLY, LD. ASSESSING OFFIC ER ON OBSERVING THAT THE TAX HAS BEEN DEDUCTED AT SOURCE AT LOWER RATE THAN THE RATE APPLICABLE ON PAYMENT OF MACHINERY HIRE CHARGES, ISSUED NOTICE U/S 148 OF THE ACT M/S. PHALOUDI CONSTRUCTION CO. ITANO.657/IND/2017 3 AND THEREAFTER CONCLUDED THE REASSESSMENT PROCEEDING U /S 143(3) R.W.S 147 OF THE ACT ON 31.01.2013 AND AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, LD. AO MADE DISALLOWANCE OF RS.11,77,515/- FOR LOWER DEDUCTION OF TAX ON MACHINERY HIRE CHARGES. INCOME WAS REASSESSED AT RS.74,98,678/-. 4. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE THE L D. CIT(A) AND PARTLY SUCCEEDED. 5. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 6. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDER OF ASSESSING OFFICER. 7. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE (D R) AND PERUSED THE RECORD PLACED BEFORE US. THE REVENUE IS AGGRIEVED WITH THE ORDER OF LD. CIT(A) DELETING DISALLOWANCE U/S 40(A)(IA) OF THE ACT AT RS. 9,97,515/-. LD. CIT(A) DELETED THE DISALLOWANCE U/S 40(A)(IA) OF THE A CT OBSERVING AS FOLLOWS: M/S. PHALOUDI CONSTRUCTION CO. ITANO.657/IND/2017 4 GROUND NO.1 & 2:- THROUGH THESE GROUNDS OF APPEAL THE APPELLANT HAS CHALLENGED THE ADDITION OF RS.11 ,77, 515/- ON ACCOUNT OF SHORT-DEDUCTION OF TDS. THE APPELLANT HA S MADE THE PAYMENT TO VARIOUS PERSONS. THE RECIPIENT PERSONS H AVE INCLUDED THE RECEIPT FROM THE APPELLANT WHILE FILIN G THE RETURN OF INCOME. THE APPELLANT FURNISHED THE CERTIFICATE IN FORM NO. 26A REGARDING THE PAYMENT OF TAXES BY THE RECIPIENT FRO M THE APPELLANT EXCEPT SHRI NARAYAN SINGH PARIHAR. THE AO IN THE REMAND REPORT HAS NOT COMMENTED ADVERSELY IN THIS R EGARD. THE RECIPIENT HAS DECLARED THAT SAID RECEIPT HAS BEEN I NCLUDED IN THEIR BOOKS OF ACCOUNT AND ALSO PAID THE INCOME TAX AT THE TIME OF FILING THE RETURN. THEREFORE, THE TAX COULD NOT BE RECOVERED ONCE AGAIN FROM THE DEDUCTOR APPELLANT. THE APPELLA NT HAS FAILED TO PRODUCE THE 26A CERTIFICATE IN CASE OF SH RI NARAYAN SINGH PARIHAR. THEREFORE, THE ADDITION MADE BY THE AO AMOUNTING TO RS.1,80,000/- IS CONFIRMED. THE APPELL ANT WILL GET THE RELIEF OF RS.9,97,515/-.THEREFORE, THE APPEAL O N THESE GROUNDS IS PARTLY ALLOWED. 8. ON PERUSAL OF ABOVE FINDING OF LD. CIT(A) WHICH HAS NOT BEEN CONTROVERTED BY THE DEPARTMENTAL REPRESENTATIVE, WE OBSERVE THAT THE ASSESSEE MADE PAYMENT OF MACHINERY HIR E CHARGES TO VARIOUS PERSONS AND THEY WERE CLAIMED TO HAV E BEEN INCLUDED AS RECEIPT IN THEIR RETURN OF INCOME. OUT OF THE TOTAL AMOUNT OF ADDITION OF RS.11,77,515/- MADE B Y THE ASSESSING OFFICER ON ACCOUNT OF SHORT DEDUCTION OF TA X, EXCEPT FOR RS.1,80,000/- WHICH WAS PAID TO SHRI NARAYAN SINGH PARIHAR. THE ASSESSEE HAS FURNISHED CERTIFICATE I N FORM NO. 26A TO PROVE THAT THE RECIPIENTS OF THE MACH INERY M/S. PHALOUDI CONSTRUCTION CO. ITANO.657/IND/2017 5 HIRE CHARGES HAVE DULY OFFERED THE AMOUNT RECEIVED BY THEM TO TAX IN THEIR REGULAR RETURN OF INCOME. 9. HON'BLE APEX COURT IN THE CASE OF HINDUSTAN COCACOL A BEVERAGES PVT. LTD VS. CIT (2007) 293 ITR 226 (SC) H AS HELD THAT NO DEMAND VISUALIZED UNDER SECTION 201 (1) OF THE INCOME- TAX ACT SHOULD BE ENFORCED AFTER THE TAX DE DUCTOR HAS SATISFIED THE OFFICER-IN-CHARGE OF TDS, THAT TA XES DUE HAVE BEEN PAID BY THE DEDUCTEE-ASSESSEE AND THIS SC RIPT IS TAKEN CARE OF BY AMENDMENT IN SECTION 201(1) WITH E FFECT FROM 01.07.2012 WHICH SPARES LIABILITY FROM TAX FAI LED TO BE DEDUCTED, WHERE IT IS REQUIRED, IF THE TAX IS DIREC TLY PAID BY THE DEDUCTEE. 10. WE, THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE JUDGMENT AND IN THE GIVEN FACTS AND CIRCUMSTANCES OF T HE CASE FIND THAT FOR THE IMPUGNED MACHINERY HIRE CHARGES OF RS.9,97,515/-, THE ASSESSEE HAS SUCCESSFULLY PROVED T HAT THE DUE TAX HAS BEEN PAID BY THE RECIPIENTS IN THEIR REGULAR INCOME TAX RETURN. NO INTERFERENCE IS THEREFORE CALL ED FOR IN THE FINDING OF LD. CIT(A). WE AFFIRM THE SAME AND DISM ISS THE GROUND RAISED BY THE REVENUE. M/S. PHALOUDI CONSTRUCTION CO. ITANO.657/IND/2017 6 11. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISMI SSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 06 .02 .2019. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 06/02/2019 CTX? P.S/. . . COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR