Nagesh Exclusive, Ludhiana V. Addl. CIT, Ludhiana

ITA 71/CHANDI/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4486 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 09-10-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 24-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 71/CHD/2013 ASSESSMENT YEAR : 2006-07 M/S NAGESH EXCLUSIVE, VS THE ADDL. CIT, G.T.ROAD (WEST ), RANGE III, NEAR JALANDHAR BYE PASS, LUDHIANA. LUDHIANA. PAN : AAAFN-8657Q (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE (WRITTEN SU BMISSIONS) RESPONDENT BY : SHRI J.S.NAGAR DATE OF HEARING : 09.10.2013 DATE OF PRONOUNCEMENT : 18.10.2013 ORDER PER T.R.SOOD, AM THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORD ER DATED 23.11.2012, PASSED BY THE LD. CIT(APPEALS)-II LUDHI ANA U/S 250(6) OF THE INCOME-TAX ACT,1961 FOR THE ASSESSMEN T YEAR 2006-07. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUND OF APPE AL : THE LD. CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN SUSTAINING THE ADDITION OF RS.291221/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE OF INTEREST RECEIPTS AS PER TDS CERTIFICATES AND AS PER PROFIT & LOSS ACCOUNT ON THE BASIS OF SYSTEM OF ACCOUNTING BEING FOLLOWED BY THE FIRM. 3. AFTER HEARING BOTH THE PARTIES, WE FIND THAT DUR ING THE ASSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTICED T HAT AS PER TDS CERTIFICATES, THE INTEREST RECEIVED BY THE ASSESSEE IS 2 RS. 18,68,456/- WHILE AS PER PROFIT & LOSS ACCOUNT THE ASSESSEE HAS SHOWN INTEREST RECEIVED ONLY AT RS. 15,77,235/-. ON ENQUIRY, IT WAS SUBMITTED THAT INT EREST HAS BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT ON C ASH BASIS AND THE BALANCE OF AMOUNT IS DULY REFLECTED I N THE NEXT YEAR. THE BALANCE INTEREST INCOME WAS ACCOUNT ED FOR IN ASSESSMENT YEAR 2007-08 BECAUSE INTIMATION FROM THE BANK WAS RECEIVED UPTO 31.3.2006. THE ASSESSING OF FICER OBSERVED THAT ASSESSEE HAS FOLLOWED MERCANTILE SYST EM OF ACCOUNTING AND IT WAS NOT POSSIBLE TO FOLLOW MIXED SYSTEM OF ACCOUNTING. ACCORDINGLY, HE SUBJECTED THE DIFFEREN CE OF INTEREST AMOUNTING TO RS. 2,91,221/- TO TAX. ON THE APPEAL, LD. CIT(APPEALS) DID NOT FIND FORCE IN THE SUBMISSI ON AND CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 4. BEFORE US, WRITTEN SUBMISSIONS HAVE BEEN FILED I N WHICH IT IS STATED THAT ISSUE MAY BE DECIDED ON THE BASIS OF SUCH WRITTEN SUBMISSIONS. 5. ON THE OTHER HAND, LD. DR STRONGLY SUPPORTED THE ORDER OF ASSESSING OFFICER AND CIT(APPEALS). 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS CAREFUL LY. THROUGH THE WRITTEN SUBMISSIONS, IT HAS BEEN MAINLY CONTENDED THAT ADDITION HAS BEEN MADE ON THE BASIS OF TDS CERTIFICATES ISSUED BY THE BANK IN THE MONTH OF APR IL,2006 AND SEPTEMBER,2006. THE AMOUNT OF DIFFERENCE OF IN TEREST AMOUNTING TO RS. 2,91,221/- HAS ALREADY BEEN SHOWN BY THE ASSESSEE IN THE SUBSEQUENT ASSESSMENT YEAR 2007-08. IT IS FURTHER STATED THAT AS PER SECTION 145(1) OF THE AC T, THE 3 ASSESSEE COULD HAVE FOLLOWED MERCANTILE SYSTEM OF ACCOUNTING OR CASH SYSTEM OF ACCOUNTING IN RESPECT OF DIFFERENT HEADS OF INCOME AND THE ASSESSEE HAD FOLL OWED MERCANTILE SYSTEM OF ACCOUNTING FOR ALL INCOMES BUT CASH SYSTEM FOR INCOME FROM INTEREST. FURTHER ARGUMENTS HAVE BEEN MADE THAT AN ITEM OF INCOME WHICH HAS BEEN TAX ED IN ONE YEAR CANNOT BE TAXED AGAIN IN ANOTHER YEAR. 7. ADMITTEDLY, THE AMOUNT OF INTEREST AS PER TDS WA S RS. 18,68,456/- AND ASSESSEE HAD CLAIMED FULL AMOUNT OF TDS DURING THE YEAR. AT THE RELEVANT POINT OF TIME, SE CTION 199 READS AS UNDER : 199. (1) ANY DEDUCTION MADE IN ACCORDANCE WITH TH E FOREGOING PROVISIONS OF THIS CHAPTER AND PAID TO THE CENTRAL GOVERNMENT SHA LL BE TREATED AS A PAYMENT OF [TAX] ON BEHALF OF THE PERSON FROM WHOSE INCOME THE DEDUCTION WAS MADE, OR OF THE OWNER OF THE SECURITY ,OR DEPOSITOR OR OWNER OF PRO PERTY OR OF UNIT-HOLDER OR OF THE SHAREHOLDER, AS THE CASE MAY BE, AND CREDIT SHA LL BE GIVEN TO HIM FOR THE AMOUNT SO DEDUCTED ON THE PRODUCTION OF THE CERTIFI CATE FURNISHED UNDER SECTION 203 IN THE ASSESSMENT MADE UNDER THIS ACT FOR THE ASSESSMENT YEAR FOR WHICH SUCH INCOME IS ASSESSABLE] THE ABOVE PROVISION CLEARLY SHOWS THAT IF CREDIT FO R TDS HAS BEEN CLAIMED, THEN INCOME HAS TO BE NECESSARILY SHO WN IN THE SAME YEAR. THEREFORE, EVEN IF IT IS ASSUMED TH AT INTEREST INCOME WAS TO BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES AND ASSESSEE HAD FOLLOWED CASH SYSTEM OF ACCOUNTING, EVEN THEN THAT WOULD BE AGAINST THE MANDATORY PROVISIONS OF SECTION 199 OF THE ACT. IN ANY CASE, THERE IS NO MATERIAL ON RECORD TO SHOW THAT I NTEREST INCOME WAS OFFERED FOR TAXATION UNDER THE HEAD INC OME FROM OTHER SOURCES. THEREFORE, IN VIEW OF THE PRO VISIONS OF SECTION 199 OF THE ACT, THE ASSESSEE WAS REQUIRED T O OFFER 4 FULL INCOME WHICH WAS SHOWN IN THE TDS CERTIFICATE AND ACCORDINGLY, WE FIND NOTHING WRONG WITH THE ORDER O F LD. CIT(APPEALS) AND ACCORDINGLY WE CONFIRM THE SAM E. HOWEVER, WE AGREE WITH THE SUBMISSION THAT AN ITEM OF INCOME CANNOT BE TAXED TWICE, THEREFORE IF THE ASSE SSEE HAS ALREADY OFFERED THE DIFFERENTIAL INTEREST INCOME AM OUNTING TO RS. 2,91,221/- IN ASSESSMENT YEAR 2007-08, THEN INC OME FOR ASSESSMENT YEAR 2007-08 SHOULD BE REDUCED FOR CORRESPONDING YEAR. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH OCTOBER, 2013. SD/- SD/- (SUSHMA CHOWLA) (T.R.SOOD ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 18 TH OCTOBER, 2013. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR ITA T,CHD.