ITO 15 (1)(3), MUMBAI V. CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD., MUMBAI

ITA 7201/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7156 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 22-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS

Judgement Text

INTHEINCOMETAX APPELLATETRIBUNAL MUMBAI BENCHCMUMBAI BEFORE SHRI S. RIFAURRAHMAN(ACCOUNTANT MEMBER)AND SHRI RAVISHSOOD (JUDICIAL MEMBER) ITANO.7201/MUM/2019 ASSESSMENT YEAR:2016-17 INCOMETAX OFFICER-15(1)(3), ROOMNO. 15B, GROUND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020. VS. M/SCITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRALTD., CIDCO BHAVAN, CBD BELAPUR, NAVI MUMBAI- 400 614. NIRMAL, 2 ND FLOOR, NARIMAN POINT, MUMBAI-400021. PANNO.AACCC 3303 K APPELLANT RESPONDENT REVENUEBY : MR. SHREEKALAPARDESHI, DR ASSESSEEBY : MR. MADHURAGRAWAL, AR DATE OF HEARING : 26/08/2021 DATE OF PRONOUNCEMENT : 03/09/2021 ORDER PER S. RIFAURRAHMAN,A.M. THE PRESENT APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-24, MUMBAI [IN SHORT CIT(A)] FOR THE ASSESSMENT YEAR 2016-17 DATED 26.08.2019 AND ARISES OUT OF ASSESSMENT COMPLETEDU/S143(3)OF THE INCOMETAXACT, 1961(IN SHORTTHE ACT). 2. BRIEF FACTS OF THE CASE ARE, THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2016-17 DECLARING TOTAL INCOME OF RS.5,00,000/- ON M/S CITY ANDINDUSTRIAL DEVELOPMENT ITA NO. 7201/M/2019 2 20.03.2018.THE RETURN WASPROCESSEDU/S143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS. ACCORDINGLY, THE NOTICESU/S143(2) AND142(1) WERE ISSUEDAND SERVEDON THEASSESSEE. THE ASSESSEE IS APPOINTED AS A NEW TOWN DEVELOPMENT AUTHORITY FOR DEVELOPING THE NAVI MUMBAI AREA U/S 113(3A) OF THE MAHARASHTRA REGIONAL AND TOWN PLANNING ACT, 1966 (MRTP) AND A SPECIAL PLANNING AUTHORITY FOR OTHERNOTIFIEDAREAU/S40(1)(B)R.W.S.113(3A)OFTHEMRTPACTFORCARRYINGOUT ITS ACTIVITIES AS NEW TOWN DEVELOPMENT AUTHORITY. AS PER THE PROVISIONS OF SECTION 113(3A) AND 41B R.W.S. 113(3A) OF THE MRTP ACT AND VARIOUS GOVERNMENT RESOLUTION ON NOTIFICATION ISSUED BY THE GOVERNMENT OF MAHARASHTRA. 3. AT THE TIME OF ASSESSMENT, THE ASSESSING OFFICER (AO) OBSERVED THAT ITS STATEMENTGENERATEDBYTHESYSTEMANDNOTICEDTHATTHECOMPANYHADRECEIVED RENT, PROFESSIONAL FEES, CONTRACTUAL RECEIPT AND INTEREST FREE INCOME, IN ALL AGGREGATING TO RS.509,32,42,297/- FOR TDS DEDUCTED OF RS15,38,15,311/-. THE ASSESSEE HAD CLAIMED CREDIT FOR TDS AMOUNTING TO RS.509,32,42,297/- WAS NOT INCLUDEDINTHETOTALINCOME.WHENTHEASSESSEEWASASKEDTOEXPLAINABOVESAID INCOMESHOULDNOTBEADDEDBACKTOTHETOTALINCOME.INRESPONSE,THEASSESSEE VIDE LETTER DATED 21.12.2018 SUBMITTED THAT AS THE TAX WAS DEDUCTED USING THE PANNO.OFTHEASSESSEEANDTHESAMEWASREFLECTEDASPAIDAGAINSTTHEASSESSEE AND THE CORRESPONDING INCOME NOT BEING CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE.THEREFUNDOFTHESAMEWASCLAIMEDBYTHEASSESSEE.ACCORDINGLY,THE ASSESSEE FURTHER SUBMITTED THAT MERELY BECAUSE THE TDS CREDIT WAS CLAIMED AS REFUND BY THE ASSESSEE, IT CANNOT BE SAID THAT THE INCOME PURSUANCE TO THE ASSESSEE. M/S CITY ANDINDUSTRIAL DEVELOPMENT ITA NO. 7201/M/2019 3 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE ASSESSING OFFICER OBSERVED THAT AS PER THE PROVISIONS OF SECTION 199 OF THE ACT, ANY DEDUCTION MADE IN ACCORDANCE WITH OR MAKING PROVISIONS OF THIS CHAPTER AND PAID TO THE CENTRAL GOVERNMENT SHALL BE TREATED AS PAYMENT OF TAX ON BEHALF OF THE PERSON FROM WHOSE INCOME, THE DEDUCTION WAS MADE OR THE OWNER OF THE PROPERTY OR OF THE DEPOSITOR OR OF THE OWNER OF THE PROPERTY OR THE UNIT-HOLDER OR OF SHAREHOLDER AS THE CASE MAY BE. AS PER RULE 37BA(3)(I) OF THE INCOME TAX ACT, 1962, CREDIT FOR TAX DEDUCTED AT SOURCE AND PAID TO THE CENTRAL GOVERNMENT SHALL BE GIVEN OVER THE ASSESSMENT YEAR FOR WHICH SUCH INCOME IS ASSESSABLE. ACCORDINGLY, THE ASSESSING OFFICER REJECTED THE CLAIM FOR CREDIT OF TDS CLAIMED BY THE ASSESSEE. 5. AGGRIEVED WITH THE ABOVEORDER,THEASSESSEE PREFERREDANAPPEAL BEFORE THE LD.CIT(A). 6. THE LD. CIT(A) AFTER CONSIDERING THE FACTS ON RECORD ALLOWED THE APPEAL OF THEASSESSEE WITH THE FOLLOWINGOBSERVATIONS: 2.5.4. THEAO DENIED THECREDIT OF THE SAIDTDSCLAIMED ON PREMISESTHAT THE APPELLANT HAD NOT OFFERED THE INCOME TO TAX AND CONSEQUENTLY, THE TDS CREDIT CANNOT BE ALLOWED U/S. 199 R.W.R 37BA(3)(I). THE APPELLANT HAS CONTENDED THAT THE TDS CREDIT SHOULD BE ALLOWED AS THE PAYMENTS WERE RECEIVED BY IT AS AN AGENT OF THE GOVERNMENT OF MAHARASHTRAANDTHEAPPELLANT WAS NOT LIABLE TO PAY ANY TAXES ONTHE SAME. 2.5.5 IHAVEPERUSEDTHEFACTSOFTHECASEANDTHEIMPUGNEDASSESSMENT ORDER.THEREIS NO DISPUTE AS REGARDS THE FACT THAT THE APPELLANT HAS NOT OFFERED THE INCOME TO TAX AS IT WASMERELYACTINGASTHECOLLECTINGAGENTFORTHEGOVERNMENTOFMAHARASHTRA.HOWEVER, THEAPPELLANTHASOFFEREDTHECOMMISSIONINCOMETOTAX.ASTHETAXESHAVEBEENDEDUCTED ON THE PAYMENTS MADE TO THE APPELLANT, THOUGH THE SAME ARE NOT TAXABLE IN THE HANDS OFTHEAPPELLANT,THEAPPELLANTHASTOBEGRANTEDTDSCREDITOFTHESAMEASTDSHASBEEN M/S CITY ANDINDUSTRIAL DEVELOPMENT ITA NO. 7201/M/2019 4 DEDUCTED USING THE PAN OF THE APPELLANT. MOREOVER, IF THE TDS CREDIT IS NOT GRANTED TO THE APPELLANT, THE COLLECTION OF THE TAX BY THE EXCHEQUER WOULD BE UNCONSTITUTIONAL. IN LIGHT OF THESE FACTS, I HEREBY DIRECT THE AO TO ALLOW THE CREDIT OF TDS AS CLAIMED BY THE APPELLANT AFTER DUE VERIFICATION AND IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. THIS GROUND OF APPEAL IS ALLOWED. 7. AGGRIEVEDWITHTHEABOVEORDERTHEREVENUEISINAPPEALBEFOREUSRAISING FOLLOWINGGROUNDOFAPPEAL : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ACCEPTINGTHE CLAIM OF CREDIT OFTAXOFRS.15,38,15,311/-. 8. CONSIDEREDTHERIVALSUBMISSIONSANDMATERIALONRECORD.WENOTICEDTHAT THEASSESSEEISWHOLLYOWNEDCOMPANYOF GOVERNMENTOFMAHARASHTRAANDITIS ACTINGASANAGENTOFTHEGOVERNMENTFORCARRYINGOUTALLACTIVITIESANDSTATUTORY DUTIESFORTHEDEVELOPMENTOFNEWTOWN.ITISFACTON RECORDTHATTHETAXESWERE DEDUCTED ON VARIOUS PAYMENT MADE TO THE ASSESSEE TO THE EXTENT OF RS.1,53,81,15,311/-. THE ASSESSEE CLAIMED THE ABOVE SAID TDS CREDIT IN THE RETURNOFINCOMEANDEVENAOHAVEOBSERVEDTHATTHEABOVESAIDAMOUNTISNOT INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEE HAD RECEIVED THE PAYMENTS AS AN AGENT FOR REPRESENTING AS DEVELOPMENT AUTHORITY OR SPECIAL PLANNINGAUTHORITYONBEHALFOFTHEGOVERNMENTOFMAHARASHTRA.THEREFORE,THE PAYMENTS RECEIVED BY THE ASSESSEE IS NOT BELONGS TO THE ASSESSEE. THEREFORE, THE TDS DEDUCTED ON AMOUNT WHICH IS NOT THE INCOME OF THE ASSESSEE THEN WHATEVER TAX DEDUCTED AS TO BE REFUNDED TO THE ASSESSEE AND WHICH IS BELONGS TO THEGOVERNMENTOFMAHARASHTRA.THELD.DRRAISEDTHEISSUE THAT THISREFUND WILL BE INCOME OF THE ASSESSEE OR HOW THIS AMOUNT WILL BE HANDLED BY THE ASSESSEE IS NOT KNOWN. THIS APPREHENSION MAY NOT BE PROPER AS THE ASSESSEE RECEIVEDONLYCOMMISSIONINCOMEASTHEIRSERVICECHARGESANDALLOTHERINCOME M/S CITY ANDINDUSTRIAL DEVELOPMENT ITA NO. 7201/M/2019 5 OR MONEY BELONG TO THE GOVERNMENT OF MAHARASHTRA AND THE PAYMENTS NEVER INTENDED FOR THE ASSESSEE. THEREFORE, WE ARE INCLINED TO ACCEPT THE FINDINGS OF LD.CIT(A)ANDNOREASONTOINTERFEREWITHTHECONCLUSIONARRIVEDBYLD.CIT(A). ACCORDINGLY,GROUNDSRAISEDBYTHE REVENUE ISDISMISSED. 9. IN THE RESULT,THE APPEALFILEDBYTHE REVENUEISDISMISSED. ORDER PRONOUNCEDINTHEOPENCOURTON 03/09/2021. SD/- SD/- ( RAVISHSOOD ) ( S. RIFAURRAHMAN ) JUDICIALMEMBER ACCOUNTANTMEMBER MUMBAI; DATED:03/09/2021 RAHUL SHARMA,SR. P.S. COPYOFTHEORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT,MUMBAI 6. GUARDFILE. BY ORDER, //TRUE COPY// (DY./ASSISTANTREGISTRAR) ITAT,MUMBAI