M/s. Birla Steel Corner, Pune V. Income-tax Officer, Pune

ITA 758/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6061 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 31-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Retrospective amendment; Additional evidence; TDS
• Section: 143(3); 40(a)(ia); 201(1)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.758/PUN/2017 / ASSESSMENT YEAR : 2012-13 M/S. BIRLA STEEL CORNER, S.NO.17/B, NDA ROAD, WARJE, PUNE 411 029. PAN : AABFB4559J. . / APPELLANT. V/S THE INCOME TAX OFFICER, WARD 3(3), PUNE. . / RESPONDENT ASSESSEE BY : SHRI KISHORE PHADKE. REVENUE BY : SHRI M.K. VERMA. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) 2, PUNE DATED 09.12.2016 FOR THE ASSESSMENT YEAR 2012-13. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN T HE BUSINESS OF SUPPLY OF CEMENT, STEEL ETC. ASSESSEE ELECTRO NICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2012-13 ON 29.09.2012 DECLARING TOTAL INCOME / DATE OF HEARING : 09.07.2019 / DATE OF PRONOUNCEMENT: 01.08.2019 2 AT RS.26,79,057/-. THE CASE WAS SELECTED FOR SCRUTINY AN D THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER D T.25.03.2015 AND THE TOTAL INCOME WAS DETERMINED AT RS.26,79,057/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.C IT(A), WHO VIDE ORDER DT.09.12.2016 (IN APPEAL NO.PN/CIT(A)-2/ITO WD-3(3)/ PN/580/ 2015-16) GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS R AISED THE FOLLOWING GROUNDS : 1. THE LEARNED CIT (A) & AO , PUNE ERRED IN LAW AN D ON FACTS IN CONFIRMING DISALLOWANCE OF RS. 19,24,469/- U/S 40(A )(IA) OF ITA, 1961 ON ACCOUNT OF INTEREST PAID TO VARIOUS PARTIES WITH OUT DEDUCTION OF TAX. ASSESSEE SUBMITS THAT THE RECIPIENTS OF THE IN TEREST HAVE SHOWN THIS INCOME IN THEIR RESPECTIVE RETURN OF INCOME. A SSESSEE SUBMITS THAT THERE IS NO LOSS TO THE REVENUE AS THE PAYEE HAS ALREADY PAID THE TAXES ON THE SAID INCOME. 2. ASSESSEE CONTENDS THAT THE SECOND PROVISO TO SEC TION 40(A)(IA) READ WITH PROVISO TO SECTION 201 OF ITA, 1961 INSERTED I N FINANCE ACT 2012 ARE APPLICABLE WITH RETROSPECTIVE EFFECT. CONSIDERI NG THE FACT THAT THE PAYEES HAVE PAID TAXES ON THE SAID INCOME RECEIVED, DISALLOWANCE U/S 40(A)(IA) OF ITA, 1961 IS UNCALLED FOR. 3. THE LEARNED CIT (A) & AO, PUNE ERRED IN LAW AND ON FACTS IN ADDING RS.2,30,746 TO THE INCOME OF THE ASSESSEE, B EING AMOUNT REFLECTED IN FORM 26AS WITHOUT CONSIDERING FACT THA T THE SAID AMOUNT IS ALREADY OFFERED TO TAX IN RETURN OF INCOME. 3. GROUND NOS.1 AND 2 BEING INTER-CONNECTED ARE CONSIDER ED TOGETHER. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTIC ED THAT ASSESSEE HAD DEBITED RS.25,40,270/- ON ACCOUNT OF INTERE ST PAID TO SEVERAL PERSONS INCLUDING NBFCS BUT ASSESSEE HAD NOT DE DUCTED TDS ON SUCH INTEREST PAYMENTS. AO WAS OF THE VIEW THAT ON ACC OUNT OF NON- DEDUCTION OF TDS, PROVISIONS OF SEC.40(A)(IA) OF THE ACT ARE AT TRACTED AND ACCORDINGLY HE DISALLOWED THE AMOUNT OF RS.21,65,791/- ON ACCOUNT OF NON-DEDUCTION OF TDS. AGGRIEVED BY THE ORDER OF AO, ASS ESSEE CARRIED 3 THE MATTER BEFORE LD.CIT(A), WHO GRANTED PARTIAL RELIEF TO TH E ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW BEFORE US. 5. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFOR E LOWER AUTHORITIES AND FURTHER SUBMITTED THAT PAYEES TO WHOM A SSESSEE HAS PAID THE INTEREST HAVE ALREADY ACCOUNTED FOR THE INTE REST INCOME RECEIVED FROM THE ASSESSEE AND THEREFORE NO DISALLOWANCE U/S 40(A)(IA) OF THE ACT IS CALLED FOR IN THE HANDS OF THE ASSESSEE AND FO R THE AFORESAID PROPOSITION HE RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP PVT. LTD., REPORT ED IN (2015) 377 ITR 635, WHEREIN IT WAS HELD THAT SECOND PROVISO T O SECTION 40(A)(IA) OF THE ACT IS CLARIFICATORY IN NATURE AND IS APPLICABLE RETROSPECTIVELY. HE ALSO PLACED ON RECORD ADDITIONAL EV IDENCE IN THE FORM OF CERTIFICATE IN FORM 26AS, COPY OF LEDGER EXTRACT AND CERTIFICATE ISSUED BY THE C.A. U/S 201(1) OF THE ACT AND INTEREST CE RTIFICATES OF VARIOUS PARTIES. HE PLEADED THAT THE AFORESAID DOCUME NTS WERE RECEIVED AFTER COMPLETION OF PROCEEDINGS BEFORE LD.CIT(A) AN D THEREFORE COULD NOT BE SUBMITTED BEFORE I.T. AUTHORITIES AND THERE FORE SUBMITTED THAT THE ADDITIONAL EVIDENCE BE TAKEN ON RECORD AND TH E SAME BE CONSIDERED WHILE DECIDING THE ISSUE. LD. D.R. ON THE OTHER H AND SUPPORTED THE ORDER OF LOWER AUTHORITIES AND OBJECTED TO THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPEC T TO DISALLOWANCE U/S 40(A)(IA) OF THE ACT ON ACCOUNT OF NON-DEDUCTION OF TDS . BEFORE US, ASSESSEE AS AN ADDITIONAL EVIDENCE HAS FILED THE CERTIFICATES RECEIVED FROM VARIOUS PAYEES CERTIFYING THAT THE AMOUNTS RECEIVED FROM THE 4 ASSESSEE HAVE BEEN OFFERED TO TAX BY THEM WHILE COMPUTIN G THE TAXABLE INCOME. IT IS ALSO A FACT THAT THE AFORESAID DETAILS WERE N OT FURNISHED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES. IN VIEW OF TH E SETTLED LAW THAT NO DISALLOWANCE IS CALLED FOR IF THE PAYEE HAS DECLARED THE AMOUNT RECEIVED FROM THE ASSESSEE AS ITS INCOME, WE ARE OF THE VIEW THAT THE ISSUE NEEDS VERIFICATION AT THE END OF THE AO. WE THEREFOR E RESTORE THE ISSUE BACK TO THE FILE OF AO TO VERIFY THE CONTENTIONS OF THE ASSESSEE ABOUT THE PAYMENTS MADE BY THE ASSESSEE OFFERED TO TA X BY THE RESPECTIVE PAYEES. IN CASE, THE CONTENTION OF THE ASSESS EE IS FOUND CORRECT, THEN HE IS DIRECTED TO DECIDE THE ISSUE IN ACCOR DANCE WITH THE LAW AND IN THE LIGHT OF THE DECISION OF HONBLE DELHI HIGH COU RT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD. (SUPRA). NEEDLESS TO STATE THAT AO SHALL GRANT ADEQUATE OPPORTUNITY OF HEAR ING TO THE ASSESSEE. ASSESSEE IS ALSO DIRECTED TO COOPERATE WITH A O BY PROMPTLY FURNISHING ALL THE REQUIRED DOCUMENTS AS CALLED FOR BY THE A O. IN CASE ASSESSEE FAILS TO FURNISH THE REQUIRED DOCUMENTS, AO SHALL BE FREE TO PROCEED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THUS, THE GROUNDS 1 AND 2 OF THE ASSESSEE ARE ALLOWED FOR STA TISTICAL PURPOSES. 7. GROUND NO.3 IS WITH RESPECT TO ADDITION OF RS.2,30,746/-. 7.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESS EE FIRM WAS ASKED TO RECONCILE THE RECEIPTS WHICH WERE ACCOUNTED BY IT WITH RECEIPTS AS PER 26AS CERTIFICATE. ON THE BASIS OF RECONCILIATION STA TEMENT FURNISHED BY THE ASSESSEE, IT WAS NOTICED THAT THERE WA S A DIFFERENCE OF RS.2,30,746/- WHICH WAS NOT CREDITED TO THE INCOME BY T HE ASSESSEE. THE SUBMISSIONS MADE BY THE ASSESSEE WITH RESPECT TO T HE DIFFERENCE BETWEEN INCOME DECLARED AND THE AMOUNT THAT WAS REFLEC TED IN FORM 5 26AS WAS NOT FOUND ACCEPTABLE TO THE AO. HE ACCORDING LY MADE ITS ADDITION OF THE DIFFERENCE OF INCOME REFLECTED IN PROFIT AND LOS S ACCOUNT AND THAT WAS SHOWN IN FORM 26AS. AGGRIEVED BY THE OR DER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO UPHELD T HE ORDER OF AO. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW BEFORE US. 8. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT IF ASSESSEE FIRM WAS GIVEN AN OPPORTUNITY, IT WOULD BE IN A POSITION TO EXPLAIN THE DIFFEREN CE. HE THEREFORE PRAYED THAT THE MATTER BE REMITTED BACK TO THE FILE OF AO. LD. D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF LOWER AUTHORITIES. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPEC T TO ADDITION OF RS.2,30,746/- ON ACCOUNT OF DIFFERENCE BETWEEN INCOME DECLAR ED IN THE PROFIT AND LOSS ACCOUNT AND THE AMOUNT REFLECTED IN FOR M 26AS. BEFORE US, IT IS LD.A.R.S PRAYER THAT ONE MORE OPPORTUNITY BE GIVEN TO RECONCILE THE DIFFERENCE. WE ARE OF THE VIEW THAT SINCE THE ISSUE WITH RESPECT TO THE DISALLOWANCE OF RS.19,24,469/- U/S 40(A)(IA) O F THE ACT IS BEING REMITTED TO THE FILE OF AO BY US, HEREINABOVE, THIS IS SUE MAY ALSO AS WELL BE SENT BACK TO THE FILE OF AO FOR VERIFICATION. WE T HEREFORE RESTORE THIS ISSUE TO AO WITH A DIRECTION TO HIM TO DELETE THE ADDITION MADE IF THE ASSESSEE IS IN A POSITION TO RECONCILE THE DIFFERE NCE OF AMOUNT BETWEEN INCOME DECLARED IN THE PROFIT AND LOSS A CCOUNT AND THE AMOUNT REFLECTED IN FROM 26AS. THUS, GROUND NO.3 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6 10. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED ON 1 ST DAY OF AUGUST, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 1 ST AUGUST, 2019. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-2, PUNE. PR. CIT-2, PUNE. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.