INDIAN PETROCHEMICALS CORPORATION LTD, MUMBAI V. DCIT (LTU), MUMBAI

ITA 6895/MUM/2013

• Counselvise Citation: 689519914 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2015
• Appeal Filed By: Assessee
• Bench Allotted: I
• Assessment Year: 2000-2001
• Appeal Filed On: 27-11-2013
• Court: TRIBUNAL
• Department Lawyers: SACHCHIDAND DUBE
• Assessee Lawyers: ARVIND SONDE
• Section: 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL G , BENCH MUMBAI , . . , BEFORE SHRI JOGINDER SINGH, JM & SHRI R.C.SHARMA, AM ./ ITA NO. 6895 / MUM /20 1 3 ( / ASSESSMENT YEAR : 200 0 - 20 0 1 ) INDIAN PETROCHEMICALS CORPORATION LIMITED (NOW MERGED WITH RELIANCE INDUSTRIES LIMITED) 3 RD FLOOR, MAKER CHAMBER - IV, 222, NARIMAN POINT, MUMBAI - 400021 VS. DCIT(LARGE TAXPAYER UNIT), MUMBAI - 400005 ./ ./ PAN/GIR NO. : A A ACR 5055 K ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI ARVIND SONDE /REVENUE BY : SHRI SACHCHIDAND DUBE / DA TE OF HEARING : 2 3 RD APRIL , 201 5 / DATE OF PRONOUNCEMENT 29 TH APRIL,2015 / O R D E R PER R.C.SHARMA (A.M) : TH IS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORDER OF CIT(A) - LARGE TAXPAYER UNIT , MUMBAI DATED 30 - 12 - 2010 , FOR THE ASSESSMENT YEAR 200 0 - 200 1 , IN THE MATTER OF ORDER PASSED UNDER SECTION 154 OF THE I.T. ACT . 2. THE GRIEVANCE OF THE ASSESSEE RELATES TO DECLINING CREDIT FOR TDS OUT OF TAX PAYABLE FOR THE YEAR UNDER CONSIDERATION AND CONSEQUENTIAL INTEREST THEREON. ITA NO. 6895 / 1 3 2 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF IN THIS CASE ARE THAT ASSESSEE HAD INTEREST INCOME DURING THE ASSESSMENT YEAR 1998 - 99 AND 1999 - 2000. TDS ON SUCH INTEREST INCOME WAS NOT FULLY DEDUCTED DURING THESE YEARS . THE PART OF THE TAX ON SUCH INTEREST I NCOME WAS DEDUCTED DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE CLAIMED CREDIT FOR SUCH TDS, HOWEVER, SAME WAS DECLINED ON THE PLEA THAT THE CORRESPONDING INCOME HAS BEEN OFFERED IN THE EARLIER ASSESSMENT YEAR 1998 - 99 AND 1999 - 2000, THEREFORE, NO CRED IT FOR SUCH TDS CAN BE ALLOWED DURING THE YEAR UNDER CONSIDERATION. 4. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT ASSESSEE HAS CLAIMED FOR CREDIT OF TDS OF RS. 56,88,868/ - AGAINST INCOME TAX PAYABLE FOR THE YEAR UNDER CONSIDERATION. IN THE FIRST RO UND OF APPEAL, THE CIT(A) HAS DIRECTED THE AO TO GIVE DUE CREDIT O F SUCH TDS, SINCE TDS CERTIFICATE WAS FILED BEFORE THE CIT(A) AND NOT DURING THE COURSE OF ASSESSMENT BEFORE THE AO. HOWEVER, WHILE GIVING EFFECT TO THE ORDER OF CIT(A), THE AO DID NOT GIVE CREDIT FOR SUCH TDS DEDUCTED AT SOURCE AND RESPECTIVE CERTIFICATE WHICH WAS ALSO FILED BEFORE HIM. 5. LD. A R PLACED ON RECORD THE DECISION OF COORDINATE BENCH (HYDERABAD BENCH) IN THE CASE OF M/S NCC MAYTAS JV, PASSED IN ITA NO.812/HYD/2013, VIDE ORDER DA TED 13 - 9 - 2013, WHEREIN UNDER SIMILAR CIRCUMSTANCES THE TRIBUNAL AFTER CONSIDERING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF BERGER PAINTS INDIA LTD., 266 ITR 99, DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF NAGRI MILLS CO. LTD., 33 I TR 681, HELD THAT NO DISALLOWANCE OF TDS CAN BE MADE EVEN ITA NO. 6895 / 1 3 3 WHEN THE TDS IS PERTAINING TO THE INCOME WHICH HAS ALREADY BEEN OFFERED IN EARLIER YEARS. THE PRECISE OBSERVATION OF THE TRIBUNAL WAS A SUNDER : - 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS OF THE PA RTIES AND PERUSED THE MATERIAL ON RECORD. THE SOLE GRIEVANCE OF THE ASSESSEE IN THE PRESENT APPEAL IS WITH REGARD TO THE DISALLOWANCE OF A PORTION OF TDS CLAIMED FOR THE IMPUGNED ASSESSMENT YEAR ON THE GROUND THAT TURNOVER CORRESPONDING TO SUCH TDS WAS NOT DISCLOSED BY THE ASSESSEE IN THE RETURN FILED FOR THE IMPUGNED ASSESSMENT YEAR. ON PERUSAL OF FACTS AND MATERIALS AVAILABLE ON RECORD AS WELL AS THE ORDER PASSED BY THE REVENUE AUTHORITIES, WE FIND THAT THERE IS NO DISPUTE TO THE FACT THAT OUT OF THE TOTA L TURNOVER OF RS.25,23,31,091 THE ASSESSEE HAD DISCLOSED TURNOVER OF RS.23,99,32,700/ - FOR THE IMPUGNED ASSESSMENT YEAR. FURTHER, THE REVENUE AUTHORITIES HAVE NOT DISPUTED THE CLAIM OF THE ASSESSEE THAT THE BALANCE PORTION OF THE TURNOVER WAS OFFERED TO TA X IN THE EARLIER ASSESSMENT YEAR. WE FURTHER FIND FROM FACTS ON RECORD THAT THERE IS NO MATERIAL BROUGHT ON RECORD TO SHOW THAT THE ASSESSEE HAD CLAIMED CORRESPONDING TDS RELATING TO THE BALANCE PORTION OF THE TURNOVER IN THE CONCERNED ASSESSMENT YEARS. IT IS AN ADMITTED FACT THAT THE ENTIRE TDS RELATING TO RS.25,23,31,091/ - WAS CLAIMED FOR THE IMPUGNED ASSESSMENT YEAR AS THE TDS CERTIFICATE RELATES TO THE ASSESSMENT YEAR UNDER DISPUTE. THE ASSESSEE HAVING NOT CLAIMED ANY PORTION OF TDS IN THE PRECEDING ASS ESSMENT YEARS WHEREIN A PART OF THE TURNOVER WAS OFFERED TO TAX, THE ASSESSEES CLAIM OF TDS IN THE IMPUGNED ASSESSMENT YEAR CANNOT BE REJECTED ON THE GROUND THAT IT RELATES TO THE TURNOVER WHICH HAS NOT BEEN SHOWN BY THE ASSESSEE FOR THE IMPUGNED ASSESSME NT YEAR. THE HONBLE DELHI HIGH COURT IN CASE OF COURT ON ITS OWN MOTION VS. CIT (SUPRA) WHILE DEALING WITH IDENTICAL ISSUE HAS OBSERVED IN THE FOLLOWING MANNER: - THERE CAN BE MISMATCH BECAUSE OF THE DEDUCTOR AND THE ASSESSEE MAY BE FOLLOWING DIFFERENT M ETHODS OF ACCOUNTING. FURTHER, HE ASSESSEE MAY TREAT THE INCOME ON WHICH TAX HAS BEEN DEDUCTED AS INCOME FOR TWO OR MORE DIFFERENT YEARS. THE RESPONDENTS MUST TAKE REMEDIAL STEPS AND ENSURE THAT IN SUCH CASES TDS IS NOT REJECTED ON THE GROUND THAT THE AMOU NTS DO NOT TALLY. OF COURSE, WHILE ISSUING CORRECTIVE STEPS, THE RESPONDENTS CAN ENSURE THAT FRAUDULENT OR DOUBLE CLAIMS FOR TDS ARE NOT MADE. WE ARE NOT ISSUING ANY SPECIFIC DIRECTIONS AS IT IS A TECHNICAL MATTER BUT THE RESPONDENTS SHOULD TAKE REMEDIAL S TEPS IN THIS REGARD. 8. THE HONBLE SUPREME COURT IN CASE OF BERGER PAINTS INDIA LTD. VS. CIT (SUPRA) REFERRED TO A DECISION OF INCOME - TAX APPELLATE TRIBUNAL, SPECIAL BENCH IN CASE OF INDIAN COMMUNICATION NETWORK PVT. LTD. VS. IAC (206 ITR (AT) 96 HELD AS UNDER: - BEFORE WE PART W ITH THIS GROUND , WE CANNOT HELP FEELING THAT THE LITIGATION BETWEEN THE PARTIES COULD HAVE BEEN AVOIDED SINCE IT WAS QUITE IMMATERIAL, WHETHER FULL DEDUCTION WAS AL ITA NO. 6895 / 1 3 4 LOWED IN ONE YEAR OR PARTLY IN ONE YEAR AND PARTLY IN THE NEXT , SINCE THE ASSESSEE IS A COMPANY AND RATE OF TAX IS UNIFORM. THE GAIN TO OPEN AND THE LOSS TO THE OTHER IS ILLUSORY SINCE WHAT IS DEFERRED IN ONE YEAR, WOULD HAVE TO BE DISCHARGED IN THE NEXT. IN THAT SENSE, NOBODY HAS WON AND NOBODY HAS LOST. 9. THE HO NBLE BOMBAY HIGH COURT IN CASE OF CIT VS. NAGRI MILLS CO. LTD (33 ITR 681 (BOM) HELD AS UNDER : - WE HAVE OFTEN WONDERED WHY THE INCOME - TAX AUTHORITIES, IN A MATTER SUCH AS THIS WHERE THE DEDUCTION IS OBVIOUSLY A PERMISSIBLE DEDUCTION UNDER THE INCOME - T AX ACT, RAISE DISPUTE AS TO THE YEAR IN WHICH THE DEDUCTION IS ALLOWABLE MAY BE MATERIAL WHEN THE RATE OF TAX CHARGEABLE ON THE ASSESSEE IN TWO DIFFERENT YEARS IS DIFFERENT; BUT IN THE CASE OF INCOME OF A COMPANY, TAX IS ATTRACTED AT A UNIFORM RATE, AND WH ETHER THE DEDUCTION IN RESPECT OF BONUS WAS GRANTED IN THE ASSESSMENT YEAR 1952 - 53 OR IN THE ASSESSMENT YEAR CORRESPONDING TO THE ACCOUNTING YEAR 1952, THAT IS IN THE ASSESSMENT YEAR 1953 - 54, SHOULD BE A MATTER OF NO CONSEQUENCE TO THE DEPARTMENT, AND ONE SHOULD HAVE THOUGHT THAT THE DEPARTMENT WOU LD NOT FRITTER AWAY ITS ENERGIES IN FIGHTING MATTERS OF THIS KIND. BUT, OBVIOUSLY, JUDGING FROM THE REFERENCES THAT COME UP TO US EVERY NOW AND THEN, THE DEPARTMENT APPEARS TO DELIGHT IN RAISING POINTS OF THIS CHA RACTE R WHICH DO NOT AFFECT THE TAXAB ILITY OF THE ASSESSEE OR THE TAX THAT THE DEPARTMENT IS LIKELY TO COLLECT FROM HIM WHETHER IN ONE YEAR OR THE OTHER. THEREFORE CONSIDERING THE CONTENTION OF THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE IN THE CONTEXT OF THE RATIO LAID DOWN AS AFORESAID, WE ARE OF THE VIEW THAT THE REVENUE AUTHORITIES WERE NOT JUSTIFIED IN DISALLOWING A PART OF TDS ON THE GROUND THAT IT DOES NOT RELATE TO THE TURNOVER DISCLOSED FOR THE IMPUGNED ASSESSMENT YEAR. WE HOLD THAT INC OME RELATING TO SUCH TDS HAVING ALREADY BEEN OFFERED TO TAX IN THE EARLIER ASSESSMENT YEARS AND SINCE THE ASSESSEE HAS NOT CLAIMED CORRESPONDING TDS IN THOSE ASSESSMENT YEARS, NO DISALLOWANCE OF THE TDS CLAIMED CAN BE DONE. SO FAR AS THE CIT (A) RELYING ON RULE 37BA OF IT RULES IS CONCERNED, WE ARE OF THE VIEW THAT IN THE FIRST PLACE THE SAID RULE IS NOT APPLICABLE TO THE ASSESSMENT YEAR UNDER DISPUTE AS IT HAS BEEN INSERTED INTO THE STATUTE BY IT (SIXTH AMENDMENT) RULES 2009 WITH EFFECT FROM 1 - 4 - 2009. EVEN IF WE GO BY THE AFORESAID RULE, THE ASSESSING OFFICER WAS REQUIRED TO GIVE CREDIT TO THE TDS IN THE CORRESPONDING ASSESSMENT YEARS WHEREIN THE INCOME WAS SO OFFERED WHICH ALSO WOULD HAVE RESULTED IN REFUND TO THE ASSESSEE. IN AFORESAID VIEW OF THE MATTER, WE HOLD THAT NO DISALLOWANCE OF TDS CAN BE MADE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AND THE ASSESSEE IS ENTITLED TO CLAIM CREDIT FOR THE ENTIRE TDS AMOUNT OF RS.55,22,932/ - IN THE IMPUGNED ASSESSMENT YEAR. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE CIT (A) BY ALLOWING THE GROUND RAISED BY THE ASSESSEE. 10. IN THE RESULT, THE APPEAL IS ALLOWED. ITA NO. 6895 / 1 3 5 6. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH IN THE CASE OF M/S NCC MAYTAS JV (SUPRA), WE DIRECT THE AO TO ALLOW CREDIT FOR T DS DURING THE YEAR AND ALSO GIVE REFUND OF INTEREST U/S.244A AS PER LAW. THE AO IS AT LIBERTY TO VERIFY THAT ASSESSEE HAS NOT CLAIMED CREDIT FOR SUCH TDS IN EARLIER YEARS IN WHICH INCOME WAS OFFERED. WE DIRECT ACCORDINGLY. 7 . IN THE RESULT, APPEAL OF THE A SSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29/04 /2015 . 29/04 /2015 SD / - SD / - ( ) ( JOGINDER SINGH ) ( . . ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 29/04 /2015 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//