Garden Reach Shipbuilders & Engineers Ltd., Kolkata V. CIT, KOLKATA-1, Kolkata

ITA 710/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9200 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 21-04-2014
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Keywords: Revision of order; Corroborative evidences
• Section: 143(3); 263; 63; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI S.S.VISWANETHRA RAVI, JM & DR. A.L.SAI NI, AM ./ ITA NO.710/KOL/2014 ( / ASSESSMENT YEAR:2009-2010) GARDEN REACH SHIPBUILDERS & ENGINEERS LTD. 43/46, GARDEN REACH ROAD, KOLKATA-700024 VS. CIT, KOLKATA-1, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069 ./ ./PAN/GIR NO.: AAACG 9371 K ( /APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI SANJAY BHATTACHARYA, FCA REVENUE BY : SHRI NIRAJ KUMAR, CIT DR / DATE OF HEARING : 09/01/2017 /DATE OF PRONOUNCEMENT 22/03/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAIN ING TO ASSESSMENT YEAR 2009-10, IS DIRECTED AGAINST THE OR DER PASSED BY LD. COMMISSIONER OF INCOME TAX, KOLKATA UNDER SECTION 2 63 OF THE INCOME TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS THE ACT ), DATED 21.02.2014. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEE FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10 ON DATED 23.09.2009 DECLARING TOTAL INCOME OF RS.85,39,43,105/-. SUBSEQ UENTLY, THE ASSESSEE`S CASE WAS SELECTED FOR SCRUTINY U/S 143(3 ) OF THE ACT AND AO HAS ASSESSED THE INCOME OF THE ASSESSEE AT RS.90,01 ,69,060/-. LATER ON THE LD CIT HAS EXERCISED THE JURISDICTION U/S 263 OBSERVING THAT THERE IS DIFFERENCE IN THE INCOME REPORTED BY THE A SSESSEE AND THE INCOME ACCRUED AS PER TDS CERTIFICATES. THE LD CIT OBSERVE D THAT DURING THE YEAR UNDER CONSIDERATION AN AMOUNT OF RS. 7188898209 ( R S.7181369792 + RS.7528417) AS PER TDS CERTIFICATES WAS THE ACCRUED INCOME FROM SALES ITA NO.710/14 GARDEN REACH SHIPBUILDERS & ENGG. LTD. 2 DURING THE YEAR ON WHICH TDS OF RS.87854016 ( RS.87 680873 +RS.173143) WAS DEDUCTED BY THE DEDUCTEE, VIZ, INDI AN NAVY/COAST GUARDS. THE ASSESSEE WAS FOLLOWING THE MERCANTILE S YSTEM OF ACCOUNTING AND WHOLE OF THE TDS OF RS.87854016 WAS CLAIMED. CO RRESPONDING INCOME OF RS.7188898209 PAID/PAYABLE TO THE ASSESSE E WAS ALSO REQUIRED TO BE TREATED AS INCOME U/S 199 OF THE I.T . ACT,1961 IN THE YEAR 2008-09 RELEVANT TO THE A.Y. 2009-10. THIS HAS SEEMINGLY RESULTED IN UNDERASSESSMENT OF INCOME OF RS. 46,20,02,209/- ( R S.7,18,88,98,209 RS.67,68,96,000). 3. COMMISSIONER OF INCOME TAX HAS EXERCISED JURISD ICTION UNDER SECTION 263 OF THE ACT OBSERVING THAT SALES SHOWN B Y THE ASSESSEE DID NOT MATCH WITH THE TDS CERTIFICATES OF THE ASSESSEE AND HE ALSO NOTED THAT THERE WAS UNDERASSESSMENT OF INCOME. THEREFORE, COM MISSIONER OF INCOME TAX HAS EXERCISED JURISDICTION UNDER SECTION 263 OF THE ACT OBSERVING THE FOLLOWINGS:- DURING THE YEAR AN AMOUNT OF RS.7188898209 (RS.7181369792+RS.7528417) AS PER TDS CERTIFICATES WAS THE ACCRUED INCOME FROM SALES DURING THE YEAR ON WHICH TDS OF R S.87854016 (RS.87680873 +RS.173143 ) WAS DEDUCTED BY THE DEDU CTEE, VIZ, INDIAN NAVY/ COAST GUARDS. THE ASSESSEE WAS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING AND WHOLE OF THE TDS OF RS.87854016 W AS CLAIMED. CORRESPONDING INCOME OF RS.7188898209 PAID/PAYABLE TO THE ASSESSEE WAS ALSO REQUIRED TO BE TREATED AS INCOME U/S 199 O F THE I.T.ACT,1961 IN THE YEAR 2008-09 RELEVANT TO THE A.Y.2009-10. THIS HAS SEEMINGLY RESULTED IN UNDERASSESSMENT OF INCOME OF RS.46,20,0 2,209/- ( RS.7188898209 RS.676896000). AS PER SCHEDULE 22, A TOTAL RS.9359.36 LAKHS WAS CR EDITED TO P & L A/C WHICH INCLUDED RS.8218.54 LAKHS AS INTEREST INCOME FROM BANKS ETC. IT WAS FURTHER OBSERVED THAT DURING THE YEAR TDS OF RS .24333425 WHICH INCLUDED TDS OF RS.172609586 DEDUCTED BY DIFFERENT BANKS ON PAYMENT/CREDIT OF RS.837810542/- ( AS PER TDS CERTI FICATES) WAS ALLOWED. THE DIFFERENCE AMOUNT OF RS.15956542 ( RS.837810542 RS.821854000) WAS REQUIRED TO BE TREATED AS INCOME DURING THE YEA R. ITA NO.710/14 GARDEN REACH SHIPBUILDERS & ENGG. LTD. 3 HOWEVER, ON PERUSAL OF SCRUTINY ASSESSMENT PROCEEDI NGS, IT IS FOUND THAT THE A.O. HAS NOT EXAMINED THESE TWO ISSUES PROPERLY AND IN THE RIGHT PERSPECTIVE/DETAIL TO EXAMINE AND TO COME TO A CORR ECT CONCLUSION IN REGARD TO THE FACTS ON THESE ASPECTS AND ETC. IN FA CT, THE A.O. DID NOT TAKE COGNIZANCE OF THE INCONSISTENCIES SPELT OUT IN THE NOTICE U/S.263 OF THE I.T.ACT, 1961 AND EVEN THE TAX AUDIT REPORT AND THE AUDITED ACCOUNTS DID NOT REFLECT THESE INCONSISTENCIES CORRECTLY AND SPE CIFICALLY. 6. IN THE SUPREME COURT CASE [243 ITR 83, 88-89 (SC )], THE CIT NOTED THAT THE ITO PASSED THE ORDER OF NIL ASSESSMENT WIT HOUT APPLICATION OF MIND. INDEED, THE HIGH COURT RECORDED THE FINDING T HAT THE ITO FAILED TO APPLY HIS MIND TO THE CASE IN ALL PERSPECTIVE AND T HE ORDER PASSED BY HIM WAS ERRONEOUS. THE ITO ACCEPTED THE ENTRY IN THE ST ATEMENT OF THE ACCOUNT FILED BY THE APPELLANT IN THE ABSENCE OF AN Y SUPPORTING MATERIAL AND WITHOUT MAKING ANY INQUIRY. ON THESE FACTS, THE CONCLUSION THAT THE ORDER OF THE ITO WAS ERRONEOUS IS IRRESISTIBLE. TH EREFORE, THE SUPREME COURT WAS OF THE OPINION THAT THE HIGH COURT HAS RI GHTLY HELD THAT THE EXERCISE OF THE JURISDICTION BY THE COMMISSIONER UN DER SECTION 263(1) WAS JUSTIFIED. ************************************ ********************* 14. THE ASSESSMENT ORDER PASSED BY THE A.O. IS, THE REFORE, FOUND TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT ERESTS OF REVENUE. THE ASSESSMENT ORDER PASSED BY THE A.O. U/S.144 OF THE I.T.ACT, 1961 FOR THE ASSESSMENT YEAR 2009-10 IS, THEREFORE, SET-ASIDE TO BE FRAMED DE-NOVO IN TOTAL. THE BOOKS OF ACCOUNTS AND SUPPORTING EVIDENC ES WOULD NEED TO BE EXAMINED TO SEE FIRSTLY THE TAX AUDIT REPORT AND TH E AUDITED ACCOUNTS SUBMITTED ARE BASED ON PROPER FACTS AND SUPPORTING EVIDENCES. THE ASSESSING OFFICER SHOULD VERIFY THE UNDER LYING FIN ANCIAL TRANSACTIONS AND DO COMPLETE RECONCILIATION VIS-A- VIS THE TDS CERTI FICATES AND THE AMOUNTS MENTIONED THEREIN. 4. NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A) , THE ASSESSEE IS IN APPEAL BEFORE US AND HAS TAKEN THE FOLLOWING GROUND S OF APPEAL :- 1) THAT THE ORDER OF REVISION U/S 263 PASSED BY TH E COMMISSIONER OF INCOME-TAX IS BAD IN LAW AND NOT BA SED ON THE FACTS OF THE CIRCUMSTANCES OF THE CASE. 2) THAT WITHOUT PREJUDICE TO THE CONTENTION RAISED IN GROUND NO.1 ABOVE, THE COMMISSIONER OF INCOME-TAX WAS WRONG IN HOLDING THAT THE ASSESSMENT ORDER PASSED U/S 143(3) BY THE ASSESSING OFFICER, WAS FOUND BY HIM TO BE ALLEGEDLY ERRONEOUS IN SO FAR AS IT WAS ALLEGEDLY PREJUDICIAL TO THE INTEREST OF REV ENUE. 3) THAT WITHOUT PREJUDICE TO THE CONTENTIONS RAISE D IN GROUND NOS. 1 AND 2 ABOVE, THE COMMISSIONER OF INCOME-TAX WAS W RONG IN SETTING ASIDE THE ASSESSMENT ORDER FOR BEING FRAMED DE-NOVO IN TOTAL. 4) THAT WITHOUT PREJUDICE TO THE CONTENTIONS RAISE D IN GROUND NOS. 1,2 AND 3 ABOVE, THE COMMISSIONER OF INCOME-TAX WAS WRONG IN OBSERVING THAT THE ASSESSING OFFICER HAD ALLEGEDLY NOT ITA NO.710/14 GARDEN REACH SHIPBUILDERS & ENGG. LTD. 4 EXAMINED THE ISSUES RELATING TO THE APPELLANT'S INC OME FROM BUSINESS AND INTEREST PROPERLY AND IN THE RIGHT PER SPECTIVE / DETAIL TO EXAMINE AND TO COME TO A CORRECT CONCLUSI ON IN REGARD TO THE FACTS ON THOSE ASPECTS. 5. LD. AR FOR THE ASSESSEE HAS SUBMITTED BEFORE US THAT IT IS NOT POSSIBLE TO SHOW THE INCOME AS PER FORM 26AS-TDS DE TAILS. THE AMOUNT OF TDS RECEIVED BY THE ASSESSEE INCLUDES THE TDS ON AD VANCES THEREFORE NATURALLY THERE WILL BE MISMATCH. THEREFORE THE TDS AMOUNT CLAIMED BY THE ASSESSEE WOULD NOT MATCH WITH THE INCOME DECLARED B Y THE ASSESSEE. THERE IS NO PROVISION IN THE I.T ACT, WHERE THE ASSESSEE CAN CLAIM TDS PERTAINING TO ONE ASSESSMENT YEAR IN ANOTHER ASSESSMENT YEAR. THE ASS ESSING OFFICER ALSO SHOWN THE TDS FIGURE IN THE COMPUTATION SHEET ATTACHED WI TH THE ASSESSMENT ORDER THEREFORE, THE ORDER PASSED BY THE ASSESSING OFFICE R IS NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 6. ON THE OTHER HAND, LD. DR FOR THE REVENUE HAS PR IMARILY RELIED ON THE FINDINGS OF THE COMMISSIONER OF INCOME TAX AND STATED THAT LD CIT HAS RIGHTLY EXERCISED THE JURISDICTION U/S 263 OF T HE ACT. THE LD DR FOR THE REVENUE ALSO SUBMITTED THAT AS PER SECTION 199 READ WITH RULE 37BA (3) (I), THE TDS CLAIMED BY THE ASESSEE SHOULD NOT BE A LLOWED, THAT IS, ONLY THOSE TDS SHOULD BE ALLOWED WHICH PERTAIN TO THE IN COME DECLARED BY THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER CONSIDERATIO N. 7. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMI SSIONS OF LD DR FOR THE REVENUE, AS HIS PROPOSITIONS ARE SUPPORTED BY THE P ROVISIONS OF SECTION 199 OF THE I.T. ACT, READ WITH RULE 37BA (3) OF THE INCOME TAX RULES,1962 WHICH READ AS UNDER: ITA NO.710/14 GARDEN REACH SHIPBUILDERS & ENGG. LTD. 5 RULE 37BA: CREDIT FOR TAX DEDUCTED AT SOURCE FOR THE PURPOSES OF SECTION 199. (1) CREDIT FOR TAX DEDUCTED AT SOURCE AND PAID TO T HE CENTRAL GOVERNMENT IN ACCORDANCE WITH THE PROVISIONS OF CHA PTER XVII, SHALL BE GIVEN TO THE PERSON TO WHOM PAYMENT HAS BEEN MAD E OR CREDIT HAS BEEN GIVEN (HEREINAFTER REFERRED TO AS DEDUCTEE ) ON THE BASIS OF INFORMATION RELATING TO DEDUCTION OF TAX FURNISHED BY THE DEDUCTOR TO THE INCOME-TAX AUTHORITY OR THE PERSON AUTHORISED B Y SUCH AUTHORITY. (2)(I) WHERE UNDER ANY PROVISIONS OF THE ACT, THE W HOLE OR ANY PART OF THE INCOME ON WHICH TAX HAS BEEN DEDUCTED AT SOURCE IS ASSESSABLE IN THE HANDS OF A PERSON OTHER THAN THE DEDUCTEE, CRED IT FOR THE WHOLE OR ANY PART OF THE TAX DEDUCTED AT SOURCE, AS THE CASE MAY BE, SHALL BE GIVEN TO THE OTHER PERSON AND NOT TO THE DEDUCTEE: PROVIDED THAT THE DEDUCTEE FILES A DECLARATION WITH THE DEDUCTOR AND THE DEDUCTOR REPORTS THE TAX DEDUCTION IN THE NAME OF THE OTHER PERSON IN THE INFORMATION RELATING TO DEDUCTION OF TAX REFERRED TO IN SUB-RULE (1).] (II) THE DECLARATION FILED BY THE DEDUCTEE UNDER CL AUSE (I) SHALL CONTAIN THE NAME, ADDRESS, PERMANENT ACCOUNT NUMBER OF THE PERSON TO WHOM CREDIT IS TO BE GIVEN, PAYMENT OR CREDIT IN RE LATION TO WHICH CREDIT IS TO BE GIVEN AND REASONS FOR GIVING CREDIT TO SUCH PERSON. (III) THE DEDUCTOR SHALL ISSUE THE CERTIFICATE FOR DECUCTION OF TAX AT SOURCE IN THE NAME OF THE PERSON IN WHOSE NAME CRED IT IS SHOWN IN THE INFORMATION RELATING TO DEDUCTION OF TAX REFERR ED TO IN SUB-RULE (1) AND SHALL KEEP THE DECLARATION IN HIS SAFE CUSTODY. (3) (I) CREDIT FOR TAX DEDUCTED AT SOURCE AND PAID TO THE CENTRAL GOVERNMENT, SHALL BE GIVEN FOR THE ASSESSME NT YEAR FOR WHICH SUCH INCOME IS ASSESSABLE. THE TDS OF RS.8,78,54,016/- WAS DEDUCTED FROM THE A MOUNT OF RS.718,88,98,209/- PAID/PAYABLE TO THE ASSESSEE. ON LY RS.672,68,96,000/- WAS SHOWN BY THE ASSESSEE IN THE COMPUTATION OF INCOME. THEREFORE, RULE 37BA(3) (I) APPLIES TO IT. ASSESEE WAS ALLOWED TDS OF RS.17,26,09,586/- DEDUCT ED BY DIFFERENT BANK ON PAYMENT/CREDIT OF RS.83,78,10,542/-, BUT TH E ASSESSEE ONLY SHOWED RS.82,18,54000/- IN RESPECT OF INTEREST ON LOANS, ADVANCES, ITA NO.710/14 GARDEN REACH SHIPBUILDERS & ENGG. LTD. 6 INVESTMENT AND DEPOSIT IN THE OTHER REVENUE AS P ER SCHEDULE-22. THEREFORE, RULE 37BA(3) (I) APPLIES TO IT. THEREFORE, AS PER RULE 37BA(3) (I) THE CREDIT FOR TAX DEDUCTED AT SOURCE(TDS) AND PAID TO THE CENTRAL GOVERNMENT, SHA LL BE GIVEN FOR THE ASSESSMENT YEAR FOR WHICH SUCH INCOME IS ASSESS ABLE. THE TDS PERTAINS TO ADVANCES SHOULD NOT BE CLAIMED BY THE A SSESSEE OR MAY BE CLAIMED BY THE ASSESSEE IN THE ASSESSMENT YEAR I N WHICH SAID ADVANCES GET CONVERTED INTO INCOME. CONSIDERING THE FACTUAL POSITION EXPLAINED ABOVE, W E ARE OF THE VIEW THAT ORDER PASSED BY THE LD CIT U/S 263 DOES NOT CO NTAIN ANY INFIRMITY AND ACCORDINGLY, WE CONFIRM THE ORDER PASSED BY THE LD CIT U/S 263 OF THE ACT. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE ON ALL THE GROUNDS, IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22/03/ 2017. S D/ - (S.S.VISWANETHRA RAVI) SD/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; ! DATED 22/03/2017 ' $%& /PRAKASH MISHRA , 0 . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) % & , / ITAT, 1. / THE APPELLANT- GARDEN REACH SHIPBUILDERS & ENGG. LTD. . 2. / THE RESPONDENT.- CIT, KOLKATA-I, KOLKATA 3. 1 ( ) / THE CIT(A), KOLKATA. 4. 1 / CIT 5. 23 4 0056 , 56 , / DR, ITAT, KOLKATA 6. 4 78 / GUARD FILE. 2 0 //TRUE COPY//