Royal India Gems & Jewels Pvt Ltd., CHENNAI V. ITO Corporate Ward 5(3), CHENNAI

ITA 683/CHNY/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1005 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 26-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: D ANAND
• Section: 201(1)

Judgement Text

, (SMC) , IN THE INCOME TAX APPELLATE TRIBUNAL C (SMC) BENCH : CHENNAI . , , BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./I.T.A. NO.683/CHNY/2018 / ASSESSMENT YEAR : 2013-2014. M/S. ROYAL INDIA GEMS & JEWELS PVT. LTD, R-7/1, AVK TOWERS, NORTH MAIN ROAD, ANNA NAGAR WEST EXTN, CHENNAI 600 101. [PAN AACCR 7566D] VS. THE INCOME TAX OFFICER, CORPORATE WARD 5(3) CHENNAI 600 034. ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : SHRI. D. ANAND, ADVOCATE $%! ' # /RESPONDENT BY : SHRI. B. SAGADEVAN, IRS, JCIT & ' ' () /DATE OF HEARING : 18-09-2018 *+ ' () /DATE OF PRONOUNCEMENT : 18-09-2018 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER: IN THIS APPEAL FILED BY THE ASSESSEE, IT ASSAILS A DISALLOWANCE OF D9,20,853/- MADE BY THE LD. ASSESSING OFFICER U/S.4 0(A)(IA) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) FOR WANT OF DEDUCTION OF TAX AT SOURCE. ITA NO.683/CHNY/2018. :- 2 -: 2. ASSESSEE HAS FILED THIS APPEAL WITH A DELAY OF THI RTY FOUR DAYS. CONDONATION PETITION HAS BEEN FILED. REASON S SHOWN FOR THE DELAY SEEMS TO BE JUSTIFIED. LD. DEPARTMENTAL REPRE SENTATIVE DID NOT RAISE ANY SERIOUS OBJECTION. DELAY IS CONDONED. A PPEAL IS ADMITTED. 3. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSE E WAS A WHOLESALER TRADER OF GEMS & JEWEL. AS PER THE LD. A UTHORISED REPRESENTATIVE, ASSESSEE HAD PAID INTEREST OF D61,1 6,283/- DURING THE RELEVANT PREVIOUS YEAR WHICH INCLUDED A SUM OF D9,2 0,853/- PAID TO M/S. RELIANCE CAPITAL LTD. FURTHER, AS PER THE LD. AUTHORISED REPRESENTATIVE, ASSESSEE COULD NOT FURNISH FORM 26A DECLARATION FROM M/S. RELIANCE CAPITAL LTD TO THE LD. ASSESSING OFFI CER. NEVERTHELESS, AS PER THE LD. AUTHORISED REPRESENTATIVE, ASSESSEE HAD ADDRESSED A LETTER TO M/S. RELIANCE CAPITAL LTD ON 18.03.2016 REQUESTI NG IT TO FURNISH FORM 26A. HOWEVER, AS PER THE LD. AUTHORISED REPRE SENTATIVE, LD. ASSESSING OFFICER TOOK A VIEW THAT ASSESSEE HAD FAI LED TO DEDUCT TAX AT SOURCE ON SUCH PAYMENTS, AND MADE A DISALLOWANCE OF D9,20,853/- U/S.40(A) (I) OF THE ACT. FURTHER, AS PER THE LD. A UTHORISED REPRESENTATIVE, ASSESSEES APPEAL BEFORE LD. COMMI SSIONER OF INCOME TAX (APPEALS) DID NOT MEET WITH ANY SUCCESS. ITA NO.683/CHNY/2018. :- 3 -: 4. CONTENTION OF THE LD. AUTHORISED REPRESENTATIVE BE FORE US IS THAT ASSESSEE HAD DONE EVERYTHING WHAT WAS POSSIBLE FOR OBTAINING THE NECESSARY CONFIRMATION FROM M/S. RELIANCE CAPITAL L TD FOR HAVING INCLUDED THE INTEREST IN ITS RETURNED INCOME. ACCOR DING TO THE LD. AUTHORISED REPRESENTATIVE, IF GIVEN ONE MORE OPPORT UNITY ASSESSEE WOULD BE ABLE TO BRING IN CORROBORATIVE EVIDENCE TO SHOW THAT M/S. RELIANCE CAPITAL LTD HAD INCLUDED THE INTEREST WHIC H WAS RECEIVED BY THEM FROM THE ASSESSEE IN THEIR RETURN OF INCOME. ACCORDING TO HIM, BY VIRTUE OF FIRST PROVISO TO SECTION 201(1) OF THE ACT, ONCE THE PAYEE HAD COMPUTED ITS INCOME TAKING INTO ACCOUNT THE INT EREST RECEIVED BY IT AND FILED ITS RETURN AFTER PAYING THE DUES TAXES, T HE PAYER CANNOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT. FURTHER, ACCO RDING TO HIM, BY VIRTUE OF PROVISO TO SECTION 40(A)(I) OF THE ACT, ASSESSEE COULD NOT BE DEEMED AS ONE IN DEFAULT, ONCE THE PAYEE HAD PAID DUE TAXES AND RETURNED THE INTEREST INCOME. THE PROVISO AS PER TH E LD. AUTHORISED REPRESENTATIVE HAD TO BE CONSTRUED RETROSPECTIVELY BY VIRTUE OF THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP P. LTD (2015) 377 ITR 635 . 5. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE STRONGL Y SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. ITA NO.683/CHNY/2018. :- 4 -: 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUS ED THE ORDERS OF THE AUTHORITIES BELOW. DISALLOWANCE U/S. 40(A)(I) OF THE ACT WAS FASTENED ON THE ASSESSEE FOR ITS FAILURE TO FUR NISH FORM 26A FOR THE INTEREST PAID BY IT TO M/S. RELIANCE CAPITAL LTD. A S PER THE LD. AUTHORISED REPRESENTATIVE, ASSESSEE HAD ADDRESSED A LETTER ON 18.03.2016 TO M/S. RELIANCE CAPITAL LTD FOR GETTING FORM 26A, BUT THE SAID COMPANY HAD NOT RESPONDED. WHERE THE PAYEE HAD INCLUDED THE AMOUNTS RECEIVED AS A PART OF ITS INCOME AND FILED RETURN AFTER PAYING THE TAXES, ASSESSEE CAN ALWAYS SAY THAT IT CANNOT B E DEEMED AS ONE IN DEFAULT. BY VIRTUE OF THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF ANSAL LAND MARK TOWNSHIP P. LTD (SUPRA), FIRST PROVISO TO SECTION 201(1) AS WELL AS PROVISO TO SECTION 40(A) (I) OF THE ACT HAD TO BE CONSTRUED RETROSPECTIVELY. CONSIDERING THE FACT S AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT ISSUE REQU IRES A FRESH LOOK BY THE LD. ASSESSING OFFICER. LD. ASSESSING OFFICER CA N USE THE POWERS VESTED ON HIM FOR GETTING THE REQUIRED INFORMATION FROM M/S. RELIANCE CAPITAL LTD, SO AS TO ASCERTAIN WHETHER THEY HAD I NCLUDED THE INTEREST PAID BY THE ASSESSEE, AS A PART OF THEIR INCOME AND FILED RETURN AFTER PAYING DUE TAXES. LD. ASSESSING OFFICER CAN ALSO D IRECT THE M/S. RELIANCE CAPITAL LTD TO ISSUE THE CERTIFICATE MANDA TED IN ANNEXURE A TO ITA NO.683/CHNY/2018. :- 5 -: FORM 26A, IF THE SAID COMPANY FAILS TO RESPOND TO A SSESSEES REQUEST. LD. ASSESSING OFFICER SHALL THEREAFTER PROCEED IN A CCORDANCE WITH LAW. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON TUESDAY, THE 18TH DAY OF SEPTEM BER, 2018, AT CHENNAI. SD/- SD/- ( ) (GEORGE MATHAN) / JUDICIAL MEMBER ( . '#'$ ) (ABRAHAM P. GEORGE) % & / ACCOUNTANT MEMBER - ' / CHENNAI . / DATED:18 SEPTEMBER, 2018. KV / ' $(0 1 2 1 ( / COPY TO: 1 . ! / APPELLANT 3. & 3( ( ) / CIT(A) 5. 167 $(8 / DR 2. $%! / RESPONDENT 4. & 3( / CIT 6. 79 :' / GF