M/s International Organics Pvt. Ltd., Kolkata V. I.T.O.Ward-3(1), Kolkata

ITA 698/KOL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1637 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 08-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJIB KUMAR DAS
• Assessee Lawyers: MANOJ KATARUKA
• Keywords: TDS
• Section: 142(1); 143(2)

Judgement Text

1 ITA NO. 698/KOL/2019 INTERNATIONAL ORGANIC S PVT. LTD., AY- 2014-15 , (SMC) , IN THE INCOME TAX APPELLATE TRIBUNAL (SMC) BENCH: KOLKATA ( ) . . , ) [BEFORE SHRI A. T. VARKEY, JM] I.T.A. NO. 698/KOL/2019 ASSESSMENT YEAR: 2014-15 INTERNATIONAL ORGANICS PVT. LTD. (PAN: AAACI5433L) VS. INCOME-TAX OFFICER, WD-3(1), KOLKATA APPELLANT RESPONDENT DATE OF HEARING 03.09.2019 DATE OF PRONOUNCEMENT 06.09.2019 FOR THE APPELLANT SHRI MANOJ KATARUKA, ADVOCATE FOR THE RESPONDENT SHRI SANJIB KUMAR DAS, ADDL. CIT , SR. DR ORDER THIS APPEAL PREFERRED BY THE ASSESSEE IS AGAINST TH E ORDER OF THE LD. CIT(A)-16, KOLKATA DATED 14.03.2019 FOR AY 2014-11. 2. THE MAIN GRIEVANCE OF THE ASSESSEE IS AGAINST TH E ACTION OF THE LD. CIT(A) TO CONFIRM THE ACTION OF THE AO BY NOT ALLOWING CREDIT OF TDS OF RS.1,30,428/-. 3. BRIEFLY STATED FACTS AS OBSERVED BY THE AO ARE T HAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 26.03.2015 DECLARING TOTAL INCOME OF RS.1 ,77,580/-. RETURN WAS SELECTED FOR SCRUTINY AS PER CASS AND NOTICE U/S. 143(2) DATED 2 8.08.2015 WAS DULY SERVED ON THE ASSESSEE. THEREAFTER, NOTICE U/S. 142(1) WAS ISSUE D TO THE ASSESSEE ON 17.06.2016. THE ASSESSEE COMPANY DOING AS A CLEARING AND FORWARDIN G AGENCY (C&F AGENT) FOR THE COMPANIES NAMELY M/S. CHEMTURA CHEMICALS INDIA PVT. LTD., M/S. COROMONDAL INTERNATIONAL LTD. AND M/S. FOCUS BIOTECH. ACCORDIN G TO AO, AS PER FORM 26AS CREDIT OF RS.56,35,636/- AS AGAINST THE RECEIPTS DECLARED BY ASSESSEE RS.18,98,521/-. THE AO FOUND THAT AS PER THE 26AS TOTAL CREDITS AMOUNTED TO RS. 56,35,636/- FOR WHICH TDS WAS CLAIMED OF RS.1,91,568/- WAS NOT REFLECTED IN THE P&L ACCOU NT. THE ASSESSEE HAD ONLY SHOWN RS.17,98,521/-. THEREFORE, THE DIFFERENCE IN THE A MOUNT OF RS.56,29,633/- AND RS.17,98,521/- AMOUNTING TO RS.38,32,591/- WAS NOT REFLECTED AND AS A RESULT OF WHICH EXCESS TDS WAS CLAIMED AND PROPORTIONATELY THE AO D ISALLOWED CREDIT OF TDS OF 2 ITA NO. 698/KOL/2019 INTERNATIONAL ORGANIC S PVT. LTD., AY- 2014-15 RS.1,34,428/-. AGGRIEVED, ASSESSEE PREFERRED AN AP PEAL BEFORE THE LD. CIT(A) WHO CONFIRMED THE ACTION OF AO. AGGRIEVED ASSESSEE IS BEFORE THIS TRIBUNAL. 4. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. IT IS NOTED THAT THE ASSESSEE IS A C&F AGENT WHICH HAS THREE COMPANIES AS ITS CLIENTS. IT HAS BEEN BROUGHT TO OUR NOTICE THAT THE ASSESSE E BEING C&F AGENT HAD TO INCUR EXPENSES ON BEHALF OF THE CLIENTS WHICH THE CLIENTS (AFORESA ID THREE COMPANIES) REIMBURSE LATER WHICH IS NOT THE INCOME OF THE ASSESSEE. FOR THE SERVICES RENDERED TO THE AFORESAID THREE COMPANIES, THE ASSESSEE RECEIVES COMMISSION AT A RATE AGREED M UTUALLY BY THE PARTIES WHICH IS PAID TO THE ASSESSEE AFTER DULY DEDUCTING TDS WHICH IS THE INCOME OF THE ASSESSEE. HOWEVER, IT WAS POINTED OUT TO ME THAT WHEN THESE COMPANIES REI MBURSE EXPENDITURE WHICH THE ASSESSEE INCURRED ON BEHALF OF THESE COMPANIES AS A C&F AGEN T, THEY REIMBURSE THE EXPENDITURE TO THE ASSESSEE WHICH IS UNDISPUTEDLY NOT THE INCOME OF THE ASSESSEE. HOWEVER, DUE TO THEIR IGNORANCE OR MISTAKE THEY ERRONEOUSLY DEDUCTED TDS ON THE REIMBURSEMENT TO ASSESSEE WHICH FACT CAN BE NOTICED FROM A PERUSAL OF PAGE 24 TO 26 OF PAPER BOOK WHICH IS THE 26AS FILED BEFORE US. SINCE THE TDS HAS BEEN DEDUCTED AN D DEPOSITED IN THE GOVERNMENT TREASURY ERRONEOUSLY ON THE REIMBURSED AMOUNT WHICH DOES NOT HAVE AN ELEMENT OF INCOME, THE ASSESSEE IS ENTITLED TO THE CREDIT OF THE TDS WHIC H THE DEDUCTORS HAVE WRONGLY DEDUCTED AND CREDITED IN THE ASSESSEES ACCOUNT. SO CREDIT ON TH IS TDS HAS TO BE NECESSARILY GIVEN TO THE ASSESSEE. IT HAS TO BE KEPT IN MIND THAT AO HAS TO TAX THE RIGHT PERSON, RIGHT YEAR AND RIGHT INCOME AS HELD BY THE HONBLE SUPREME COURT IN ITO VS. CH. ATCHAIAH (1996) 218 ITR 239 (SC) AND EVEN IF THE TDS HAS BEEN WRONGLY DEDUC TED BY THE DEDUCTOR AS IN THIS CASE, THE TAX OF RS.1,34,428/- IS ALREADY WITH THE GOVERN MENT AND THEREFORE, THIS AMOUNT HAS TO BE GIVEN CREDIT AS DISCUSSED SUPRA. THEREFORE, I ALLO W THE CLAIM OF THE ASSESSEE AND DIRECT AO TO GIVE CREDIT OF RS.1,30,428/-. 5. GROUND NOS. 3 AND 4 ARE GENERAL IN NATURE, THERE FORE, DISMISSED. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 6TH SEPTE MBER, 2019. SD/- (ABY. T. VARKEY) JUDICIAL MEMBER DATED : 6TH SEPTEMBER, 2019 JD.(SR.P.S.) 3 ITA NO. 698/KOL/2019 INTERNATIONAL ORGANIC S PVT. LTD., AY- 2014-15 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. INTERNATIONAL ORGANICS PVT. LTD ., 1 ST FLOOR, 11, CROOKED LANE, ESPLANADE, KOLKATA-700 069. 2 RESPONDENT ITO, WARD-3(1), KOLKATA 3. 4. CIT(A)-16, KOLKATA (SENT THROUGH E-MAIL) CIT-, , KOLKATA. 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR