M/s NCC Maytas JV, Secunderabad V. ACIT, Circle-6(1), Hyderabad

ITA 812/HYD/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69768 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 21-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E SUNIL BABU

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.812/HYD/2013 ASSESSMENT YEAR 2006-07. M/S. NCC MAYTAS JV,BEGUMPET, -V- ASS TT. CIT, CIRCLE-6(1), HYDERABAD. HYDERABAD. PAN:AADFN 4027D (APPELLANT) (RESPONDENT) APPELLANT BY SHRI KC DEVDAS RESPONDENT BY SHRI K.E. SUNIL BABU DATE OF HEARING 26-8-2013 DATE OF PRONOUNCEMENT 13-09-2013 ORDER PER SAKTIJIT DEY, J.M: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 13-3-2013 OF CIT (A)-9, MUMBAI CAMP AT HYDERA BAD PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE ONLY ISSUE IN THE PRESENT APPEAL IS WITH R EGARD TO THE DISALLOWANCE OF TDS CLAIM TO THE TUNE OF RS.2,86,13 4/- ON THE GROUND THAT THE TDS SHOULD BE CORRESPONDING TO GROS S RECEIPTS DISCLOSED BY THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER DISPUTE. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS A JOINT V ENTURE. FOR THE IMPUGNED ASSESSMENT YEAR THE ASSESSEE FILED ITS RETURN OF INCOME DISCLOSING TOTAL INCOME OF RS.1,38,91,595/-. INITIALLY, THE 2 ITA NO.812 OF 2013 M/S NCC MAYTAS JV HYDERABAD. RETURN WAS PROCESSED U/S 143(1) OF THE ACT ON 27-4 -2007 ACCEPTING THE INCOME RETURNED. SUBSEQUENTLY HOWEVE R THE ASSESSEES RETURN WAS SELECTED FOR SCRUTINY ASSESSM ENT AND IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER WHILE EXAMINING THE DETAILS NOTICED THAT THE ASSESSEE HAD CLAIMED TDS OF AN AMOUNT OF RS.58,22,932/- AS PER TDS CERTIFICA TE FILED FOR THE IMPUGNED ASSESSMENT YEAR. HOWEVER, HE FURTHER NOTICED THAT THE ENTIRE GROSS RECEIPTS OF RS.25,23,31,091/- AS MENTIONED IN THE TDS CERTIFICATE HAS NOT BEEN SHOWN BY THE ASSE SSEE IN THE P & L ACCOUNT. WHEN THE ASSESSING OFFICER ASKED TO EXPLAIN THE SAME, THE ASSESSEE SUBMITTED THAT HE HAD DECLARED T URNOVER OF RS.23,99,32,700/- IN THE YEAR UNDER DISPUTE AS THE BALANCE PORTION OF THE TURNOVER WAS OFFERED TO TAX IN THE P RECEDING ASSESSMENT YEARS. THE ASSESSING OFFICER HOWEVER RE JECTED SUCH CONTENTION OF THE ASSESSEE BY OBSERVING THAT AS PER THE PROVISIONS CONTAINED U/S 199 OF THE ACT TDS HAS TO BE RESTRICT ED TO THE RECEIPTS SHOWN BY THE ASSESSEE. HE ACCORDINGLY DISA LLOWED PROPORTIONATE AMOUNT OF TDS AND ALLOWED AN AMOUNT O F RS.55,36,798/- AS CREDIT GIVEN TO TDS. THE ASSESSE E BEING AGGRIEVED OF SUCH DISALLOWANCE OF PORTION OF TDS PR EFERRED AN APPEAL BEFORE THE CIT (A). 4. ON APPEAL, THE CIT (A) SUSTAINED THE DISALLOWANC E BY OBSERVING THAT RULE 37BA OF INCOME-TAX RULES, 1962 PROVIDED FOR SUCH APPORTIONMENT OF TDS TO DIFFERENT ASSESSMENT Y EARS IN WHICH THE INCOME IS ASSESSABLE ON PROPORTIONATE BASIS. 5. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE AS SESSEE REITERATING THE STAND TAKEN BEFORE THE CIT (A) SUBM ITTED BEFORE US OUT OF THE GROSS RECEIPTS OF RS.25,23,31,091/- MENTIONED IN TDS CERTIFICATE ISSUED FOR THE IMPUGNED ASSESSMENT YEAR, AN AMOUNT OF RS.23,99,32,700/- WAS SHOWN IN THE ASSES SMENT YEAR 3 ITA NO.812 OF 2013 M/S NCC MAYTAS JV HYDERABAD. UNDER DISPUTE AS THE REST OF THE AMOUNT HAS ALREADY BEEN OFFERED FOR TAXATION IN THE PRECEDING ASSESSMENT YEARS BY T HE ASSESSED. HOWEVER, THE ASSESSEE HAD NOT TAKEN CREDIT OF THE T DS RELATING TO TURNOVER DISCLOSED IN THE EARLIER ASSESSMENT YEAR. HENCE, IT WAS ARGUED THAT THE TDS AMOUNT AS MENTIONED IN THE TDS CERTIFICATE FOR THE IMPUGNED ASSESSMENT YEAR SHOULD BE GIVEN C REDIT IN ITS ENTIRETY WITHOUT DISALLOWING A PORTION OF IT. T HE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE FURTHER CONTENDED THAT SECTION 199 OF THE ACT IS AN ENABLING PROVISION FO R GRANTING TDS PROVISION AND NOT A COMPUTATION PROVISION. IN SUPPO RT OF SUCH CONTENTION, THE LEARNED AUTHORISED REPRESENTATIVE F OR THE ASSESSEE RELIED UPON THE FOLLOWING DECISIONS:- I) COURT ON ITS OWN MOTION VS. CIT 352 ITR 273 (DE L) II) CIT VS. NAGRI MILLS CO. LTD. (33 ITR 681 (BOM) III) BERGER PAINTS INDIA LTD. VS. CIT (266 ITR 99) (SC) 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUPPORTED THE ORDER OF THE CIT (A). 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS OF THE PART IES AND PERUSED THE MATERIAL ON RECORD. THE SOLE GRIEVANCE OF THE ASSESSEE IN THE PRESENT APPEAL IS WITH REGARD TO TH E DISALLOWANCE OF A PORTION OF TDS CLAIMED FOR THE IMPUGNED ASSESS MENT YEAR ON THE GROUND THAT TURNOVER CORRESPONDING TO SUCH TDS WAS NOT DISCLOSED BY THE ASSESSEE IN THE RETURN FILED FOR T HE IMPUGNED ASSESSMENT YEAR. ON PERUSAL OF FACTS AND MATERIALS AVAILABLE ON RECORD AS WELL AS THE ORDER PASSED BY THE REVENUE A UTHORITIES, WE FIND THAT THERE IS NO DISPUTE TO THE FACT THAT OUT OF THE TOTAL TURNOVER OF RS.25,23,31,091 THE ASSESSEE HAD DISCLO SED TURNOVER OF RS.23,99,32,700/- FOR THE IMPUGNED ASSESSMENT YE AR. FURTHER, THE REVENUE AUTHORITIES HAVE NOT DISPUTED THE CLAIM OF THE 4 ITA NO.812 OF 2013 M/S NCC MAYTAS JV HYDERABAD. ASSESSEE THAT THE BALANCE PORTION OF THE TURNOVER W AS OFFERED TO TAX IN THE EARLIER ASSESSMENT YEAR. WE FURTHER FIN D FROM FACTS ON RECORD THAT THERE IS NO MATERIAL BROUGHT ON RECORD TO SHOW THAT THE ASSESSEE HAD CLAIMED CORRESPONDING TDS RELATING TO THE BALANCE PORTION OF THE TURNOVER IN THE CONCERNED AS SESSMENT YEARS. IT IS AN ADMITTED FACT THAT THE ENTIRE TDS R ELATING TO RS.25,23,31,091/- WAS CLAIMED FOR THE IMPUGNED ASS ESSMENT YEAR AS THE TDS CERTIFICATE RELATES TO THE ASSESSME NT YEAR UNDER DISPUTE. THE ASSESSEE HAVING NOT CLAIMED ANY PORTI ON OF TDS IN THE PRECEDING ASSESSMENT YEARS WHEREIN A PART OF TH E TURNOVER WAS OFFERED TO TAX, THE ASSESSEES CLAIM OF TDS IN THE IMPUGNED ASSESSMENT YEAR CANNOT BE REJECTED ON THE GROUND TH AT IT RELATES TO THE TURNOVER WHICH HAS NOT BEEN SHOWN BY THE AS SESSEE FOR THE IMPUGNED ASSESSMENT YEAR. THE HONBLE DELHI HI GH COURT IN CASE OF COURT ON ITS OWN MOTION VS. CIT (SUPRA) W HILE DEALING WITH IDENTICAL ISSUE HAS OBSERVED IN THE FOLLOWING MANNER:- THERE CAN BE MISMATCH BECAUSE OF THE DEDUCTOR AND THE ASSESSEE MAY BE FOLLOWING DIFFERENT METHODS OF ACCO UNTING. FURTHER, HE ASSESSEE MAY TREAT THE INCOME ON WHICH TAX HAS BEEN DEDUCTED AS INCOME FOR TWO OR MORE DIFFERE NT YEARS. THE RESPONDENTS MUST TAKE REMEDIAL STEPS AN D ENSURE THAT IN SUCH CASES TDS IS NOT REJECTED ON TH E GROUND THAT THE AMOUNTS DO NOT TALLY. OF COURSE, WHILE IS SUING CORRECTIVE STEPS, THE RESPONDENTS CAN ENSURE THAT FRAUDULENT OR DOUBLE CLAIMS FOR TDS ARE NOT MADE. WE ARE NOT ISSUING ANY SPECIFIC DIRECTIONS AS IT IS A TECH NICAL MATTER BUT THE RESPONDENTS SHOULD TAKE REMEDIAL STE PS IN THIS REGARD. 8. THE HONBLE SUPREME COURT IN CASE OF BERGER PAI NTS INDIA LTD. VS. CIT (SUPRA) REFERRED TO A DECISION OF INCO ME-TAX APPELLATE TRIBUNAL, SPECIAL BENCH IN CASE OF INDIAN 5 ITA NO.812 OF 2013 M/S NCC MAYTAS JV HYDERABAD. COMMUNICATION NETWORK PVT. LTD. VS. IAC (206 ITR (A T) 96 HELD AS UNDER:- BEFORE WE PART WITH THIS GROUND, WE CANNOT HELP FEE LING THAT THE LITIGATION BETWEEN THE PARTIES COULD HAVE BEEN AVOIDED SINCE IT WAS QUITE IMMATERIAL, WHETHER FULL DEDUCTION WAS ALLOWED IN ONE YEAR OR PARTLY IN ONE YEAR AND PARTLY IN THE NE XT, SINCE THE ASSESSEE IS A COMPANY AND RATE OF TAX IS UNIFORM. THE GAIN TO OPEN AND THE LOSS TO THE OTHER IS ILLUSORY SINCE WH AT IS DEFERRED IN ONE YEAR, WOULD HAVE TO BE DISCHARGED IN THE NEX T. IN THAT SENSE, NOBODY HAS WON AND NOBODY HAS LOST. 9. THE HONBLE BOMBAY HIGH COURT IN CASE OF CIT VS. NAGRI MILLS CO. LTD (33 ITR 681 (BOM) HELD AS UNDER :- WE HAVE OFTEN WONDERED WHY THE INCOME-TAX AUTHORITI ES, IN A MATTER SUCH AS THIS WHERE THE DEDUCTION IS OBVIOUSL Y A PERMISSIBLE DEDUCTION UNDER THE INCOME-TAX ACT, RAI SE DISPUTE AS TO THE YEAR IN WHICH THE DEDUCTION IS ALLOWABLE MAY BE MATERIAL WHEN THE RATE OF TAX CHARGEABLE ON THE ASS ESSEE IN TWO DIFFERENT YEARS IS DIFFERENT; BUT IN THE CASE OF I NCOME OF A COMPANY, TAX IS ATTRACTED AT A UNIFORM RATE, AND WH ETHER THE DEDUCTION IN RESPECT OF BONUS WAS GRANTED IN THE AS SESSMENT YEAR 1952-53 OR IN THE ASSESSMENT YEAR CORRESPONDIN G TO THE ACCOUNTING YEAR 1952, THAT IS IN THE ASSESSMENT YEA R 1953-54, SHOULD BE A MATTER OF NO CONSEQUENCE TO THE DEPARTM ENT, AND ONE SHOULD HAVE THOUGHT THAT THE DEPARTMENT WOUL D NOT FRITTER AWAY ITS ENERGIES IN FIGHTING MATTERS OF THIS KIND. BUT, OBVIOUSLY, JUDGING FROM THE REFERENCES THAT COME UP TO US EVERY NOW AND THEN, THE DEPARTMENT APPEARS TO DELIGHT IN RAISING POINTS OF THIS CHARACTER WHICH DO NOT AFFECT THE TA XABILITY OF THE ASSESSEE OR THE TAX THAT THE DEPARTMENT IS LIKELY T O COLLECT FROM HIM WHETHER IN ONE YEAR OR THE OTHER. THEREFORE CONSIDERING THE CONTENTION OF THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE IN THE CONTEXT OF T HE RATIO LAID DOWN AS AFORESAID, WE ARE OF THE VIEW THAT THE REVENUE AUTH ORITIES WERE NOT JUSTIFIED IN DISALLOWING A PART OF TDS ON THE GROUN D THAT IT DOES NOT 6 ITA NO.812 OF 2013 M/S NCC MAYTAS JV HYDERABAD. RELATE TO THE TURNOVER DISCLOSED FOR THE IMPUGNED A SSESSMENT YEAR. WE HOLD THAT INCOME RELATING TO SUCH TDS HAVING ALR EADY BEEN OFFERED TO TAX IN THE EARLIER ASSESSMENT YEARS AND SINCE TH E ASSESSEE HAS NOT CLAIMED CORRESPONDING TDS IN THOSE ASSESSMENT YEARS , NO DISALLOWANCE OF THE TDS CLAIMED CAN BE DONE. SO FAR AS THE CIT (A) RELYING ON RULE 37BA OF IT RULES IS CONCERNED, WE ARE OF THE VIEW T HAT IN THE FIRST PLACE THE SAID RULE IS NOT APPLICABLE TO THE ASSESSMENT Y EAR UNDER DISPUTE AS IT HAS BEEN INSERTED INTO THE STATUTE BY IT (SIXTH AMENDMENT) RULES 2009 WITH EFFECT FROM 1-4-2009. EVEN IF WE GO BY THE AFORESAID RULE, THE ASSESSING OFFICER WAS REQUIRED TO GIVE CREDIT T O THE TDS IN THE CORRESPONDING ASSESSMENT YEARS WHEREIN THE INCOME W AS SO OFFERED WHICH ALSO WOULD HAVE RESULTED IN REFUND TO THE ASS ESSEE. IN AFORESAID VIEW OF THE MATTER, WE HOLD THAT NO DISALLOWANCE OF TDS CAN BE MADE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AN D THE ASSESSEE IS ENTITLED TO CLAIM CREDIT FOR THE ENTIRE TDS AMOUNT OF RS.55,22,932/- IN THE IMPUGNED ASSESSMENT YEAR. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE CIT (A) BY ALLOWING THE GROUND RAISED BY THE ASSESSEE. 10. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 13-9-2013. SD/- ( CHANDRA POOJARI) ACCOUNTANT MEMBER SD/- (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 13 TH SEPT. 2013 JMR* 7 ITA NO.812 OF 2013 M/S NCC MAYTAS JV HYDERABAD. COPY TO:- 1) M/S. NCC MAYTAS JV, 6-3-1186/5/A, 3 RD FLOOR, AMOGH PLAZA, BEGUMPET, HYDERABAD. 2) ACIT, CIR-6(1), HYDERABAD. 3) CIT (A)-9, MUMBAI, CAMP AT HYDERABAD. 4) CCIT-III, HYDERABAD. 5.THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERA BAD. JMR* * 8 ITA NO.812 OF 2013 M/S NCC MAYTAS JV HYDERABAD.