DCIT (TDS) 1(3), MUMBAI V. J.M FINANCIAL SERVCIES P. LTD, MUMBAI

ITA 7082/MUM/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7842 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 24-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K BEPAIR
• Keywords: Non-deduction of tax

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL SMC BENCH MU MBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.7082/MUM/2014 (ASSESSMENT YEAR 2011-12 ) DCIT (TDS-1 (3) ROOM NO. 702, 7 TH FLOOR, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD, MUMBAI- 400002. VS. M/S J.M. FINANCIAL SERVICES PVT. LTD. 4 TH FLOOR, PALM COURT COMPLEX, LINK ROAD, MALAD (WEST), MUMBAI-400064. PAN: AAACJ5977A APPELLANT RESPONDENT APPELLANT BY : SHRI S.K. BEPAIR (SR. DR) RESPONDENT BY : NONE DATE OF HEARING : 09.08.2018 DATE OF PRONOUNCEMENT : 09.08.2018 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY REVENUE UNDER SECTION 253 OF THE ACT IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-1 4, MUMBAI [LD. CIT(A)] DATED 11.09.2004 FOR ASSESSMENT YEAR 2011-1 2, WHICH IN TURN ARISES FROM THE ORDER PASSED UNDER SECTION 201(1)/2 01(1A) DATED 25.03.2013 BY DCIT(TDS)-2(1). THE APPEAL WAS INITIALLY DECIDED VIDE ORDER DATED 08.07.2016. HOWEVER, THE REVENUE FILED AN APPLICATI ON UNDER SECTION 254(2) INTER ALIA CONTENDED THAT WHILE DECIDING THE APPEAL ONLY GROUND NO.1 (RELATED TO NON-DEDUCTION OF TAX AT SOURCE ON PAYMENT OF ANN UAL MAINTENANCE OF EQUIPMENT) RAISED IN THE APPEAL WAS DECIDED AND REM AINING TWO GROUNDS OF APPEAL (RELATED WITH NON-DEDUCTION OF TAX AT SOURCE ON PAYMENT OF BANK GUARANTEE COMMISSION) LEFT UN-ADJUDICATED. CONSIDER ING THE CONTENTS OF APPLICATION AND SUBMISSION OF REVENUE, THE ORDER DA TED 08.07.2016 WAS ITA NO.7082/M/2014 M/S J.M. FINANCIAL SERVICES PVT . LTD. 2 RECALLED QUA GROUND NO.2 & 3 VIDE ORDER DATED 05.01 .2018 PASSED IN MISCELLANEOUS APPLICATION NO. 273/MUM/2017. WITH TH IS BACKGROUND, THE APPEAL CAME UP HEARING AGAIN FOR LIMITED PURPOSE. 2. BRIEF FACTS OF THE CASE ARE THAT A SURVEY WAS CONDU CTED AT THE PREMISES OF ASSESSEE ON 22.07.2011. DURING THE SURVEY, STATEMEN T OF SHRI VISHWANATH SUBRAMANIAN, SR. VICE-PRESIDENT WAS RECORDED. AND O N EXAMINATION OF RECORD, IT WAS NOTED THAT THE ASSESSEE HAS MADE THE PAYMENT OF BANK GUARANTEE COMMISSION WITHOUT MAKING TDS. THE DCIT(T DS)/AO NOTED THAT THE ASSESSEE HAS PAID BANK GUARANTEE COMMISSION OF RS. 1,87,34,493/- ON WHICH TDS OF RS. 16,24,433/- WAS LIABLE TO BE DEDUC TED. THE ASSESSEE FAILED TO DEDUCT THE TDS. THE AO/DCIT(TDS) WORKED OUT THE AMOUNT OF DEFAULT OF RS. 16,24,433/- AND INTEREST UNDER SECTION 201(1 A) @ 1% FROM 01.04.2010 TO 31.03.2013 WAS WORKED OUT AT RS. 5,84 ,796/-. ON APPEAL BEFORE THE LD. CIT(A), THE ORDER OF AO/DCIT(TDS) WE RE SET-ASIDE/QUASHED. THEREFORE, THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. 3. NONE APPEARED ON BEHALF OF ASSESSEE. WE HAVE NOTED THAT THE NOTICE SENT THROUGH RPAD IS RETURNED BACK WITH REMARK LEFT. T HUS, WE LEFT NO OPTION EXCEPT TO HEAR THE LD. DR FOR THE REVENUE AND TO DE CIDE THE CASE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF ASSESSING OFFICER/DCIT(TDS) AND WOULD SUBM IT THAT ASSESSEE WAS LIABLE TO DEDUCT TAX ON PAYMENT OF BANK GUARANTEE C OMMISSION. ITA NO.7082/M/2014 M/S J.M. FINANCIAL SERVICES PVT . LTD. 3 4. WE HAVE CONSIDERED THE SUBMISSION AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE HAVE NOTED THAT THE LD. CIT(A ) QUASHED/SET-ASIDE THE ORDER OF ASSESSING OFFICER/DCIT(TDS) ON THE BASIS O F DECISION OF HER PREDECESSOR FOR ASSESSMENT YEAR 2010-11 IN CIT(A)-1 2/ITO(TDS)- 2(3)/TDS.256/2013-14 DATED 11.07.2012. WE HAVE FURT HER NOTED THAT ORDER OF LD. CIT(A) FOR ASSESSMENT YEAR 2010-11 WAS PASSE D BY FOLLOWING THE DECISION OF TRIBUNAL IN KOTAK SECURITIES LTD. VS. D CIT(TDS) IN ITA NO. 6657/MUM/2001. THE COORDINATE BENCH OF TRIBUNAL IN KOTAK SECURITIES LTD. VS. DCIT(TDS) (SUPRA) HELD THAT THE EXPRESSION COM MISSION MUST BE CONFINED TO A PAYMENT MADE TO AGENTS ETC FOR EFFECT ING SALES AND CARRYING OUT BUSINESS TRANSACTIONS AND CANNOT EXTEND TO PAYMENTS WHICH ARE FOR SERVICES RENDERED OR PRODUCTS OFFERED ON A PRINCIPAL TO PRIN CIPAL BASIS. A PRINCIPAL- AGENT RELATIONSHIP IS A SINE QUA NON FOR INVOKING T HE PROVISIONS OF SECTION 194H. AS THERE IS NO PRINCIPAL AGENT RELATIONSHIP B ETWEEN A BANK ISSUING THE BANK GUARANTEE AND THE ASSESSEE, THE PAYMENT, THOUGH TERMED COMMISSION, IS NOT COVERED BY SECTION 194H. CONSIDERING THE DECISION OF TRIBUNAL, WE DO NOT FIND MERIT IN THE GROUNDS OF APPEAL NO. 2 & 3 R AISED BY REVENUE. THEREFORE, THE APPEAL ON GROUND NO. 2 & 3 IS DISMIS SED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT O N 09.08.2018. SD/- SD/- G.S. PANNU PAWAN SINGH ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 09.08.2018 ITA NO.7082/M/2014 M/S J.M. FINANCIAL SERVICES PVT . LTD. 4 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT(A) 5. DR SMC BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI