DCIT, CHENNAI V. International Seaport Dreading Limited, CHENNAI

ITA 894/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68839 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 28-10-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI
• Assessee Lawyers: V P MANIKANDAN
• Keywords: Transfer pricing; International transaction
• Section: 244A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 894/MDS/2013 ASSESSMENT YEAR : 2007-08 THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-II(3), 121, M.G. ROAD, CHENNAI 34. (APPELLANT) VS M/S. INTERNATIONAL SEAPORT DREADING LIMITED, 5 TH FLOOR, CHALLAM TOWERS, OLD NO.62, NEW NO.113, DR. RADHAKRISHNAN SALAI, MYLAPORE, CHENNAI 600 004. [PAN: AABCI 2286 E] (RESPONDENT) REVENUE BY : SHRI T.N. BETGERI, JCIT ASSESSEE BY : SHRI V.P. MANIKANDAN, C.A., DATE OF HEARING : 28-10-2013 DATE OF PRONOUNCEMENT : 20-11-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-I, COIMB ATORE DATED 25-02-2013 RELEVANT TO THE ASSESSMENT YEAR (AY) 200 7-08. I.T.A. NO. 894/MDS/2013 2 2. THE ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF DREDGING, MARINE ENGINEERING, MAINTAINING PORTS AND HARBORS AND OTHER RELATED SERVICES. FOR THE ASSESSMENT YEAR UN DER REFERENCE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 31-10-20 07 DECLARING LOSS OF ` 2,15,68,890/- AND CLAIMING REFUND OF ` 9,87,26,094/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER RE FERRED TO AS THE ACT) WAS ISSUED TO THE ASSESSEE ON 19-09-2008. SI NCE THERE WERE CERTAIN INTERNATIONAL TRANSACTIONS ENTERED INTO BY THE ASSESSEE, REFERENCE WAS MADE TO THE TRANSFER PRICING OFFICER [TPO] TO DETERMINE THE ARMS LENGTH PRICE [ALP] IN RESPECT O F INTERNATIONAL TRANSACTIONS. THE ASSESSING OFFICER VIDE ASSESSMENT ORDER 30-12-2 010, ASSESSED THE INCOME OF THE ASSESSEE (BOOK PROFITS) U/S.115JB AS ` 1,43,05,610/- AND RAISED DEMAND OF ` 23,50,197/- INCLUDING INTEREST U/S.234B. THE ASSESSEE HAD RECEIVED CERTA IN PAYMENTS AFTER DEDUCTION OF TAX AT SOURCE. THE ASSESSEE FIL ED APPLICATION FOR RECTIFICATION U/S.154 WITH A CONTENTION THAT THE DE MAND HAS BEEN RAISED BY THE ASSESSING OFFICER WITHOUT GRANTING TD S CREDIT TO THE TUNE OF ` 8,48,08,944/-. THE DCIT, CHENNAI VIDE ORDER DATED 17- 03-2011, ALLOWED TDS CREDIT OF ` 4,28,39,643/- AND GRANTED INTEREST U/S.244A THEREON FROM 1 ST APRIL 2007. THE DCIT DID NOT ALLOW I.T.A. NO. 894/MDS/2013 3 TDS CREDIT WITH RESPECT TO TDS CERTIFICATE AMOUNT T O ` 4,19,69,299/- ON THE GROUND THAT CONFIRMATION WAS R EQUIRED FROM THE ISSUER M/S. DREDGING CORPORATION OF INDIA LIMIT ED. THE ASSESSEE OBTAINED A WRITTEN CONFIRMATION FROM M/S. DREDGING CORPORATION OF INDIA LIMITED AND FURNISHED THE SAME TO THE ASSESSING OFFICER ON 27 TH APRIL 2011. THE ASSESSING OFFICER VIDE ORDER DATED 07 TH SEPTEMBER, 2011 PASSED U/S.154, ALLOWED TDS CREDIT FOR THE REMAINING AMOUNTS OF ` 4,19,69,299/- BUT DID NOT GRANT INTEREST U/S.244A FROM 1 ST APRIL 2007 ON THE GROUND THAT THE DELAY IN FURNISHING THE DETAILS WAS ON THE PART OF THE AS SESSEE. 3. AGGRIEVED AGAINST THE ORDER DATED 07-09-2011 PAS SED U/S.154 GRANTING SHORT INTEREST U/S.244A, THE ASSES SEE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS). THE CIT(APPEALS) H ELD THAT THE DELAY IN FURNISHING THE ORIGINAL TDS CERTIFICATES C ANNOT BE TREATED AS DELAY IN RESPECT OF THE PROCEEDINGS RESULTING IN THE REFUND AND DIRECTED THE ASSESSING OFFICER TO GRANT INTEREST U/ S.244A OF ` 4,12,18,817/- FROM MARCH, 2011 TO SEPTEMBER, 2011. AS REGARDS TWO TDS CERTIFICATES AMOUNTING TO ` 4,19,69,299/- WHEREIN THE PAN NUMBER OF THE ASSESSEE WAS NOT QUOTED AND THE ASSES SEE HAD TO OBTAIN CONFIRMATION FROM THE ISSUER, THE CIT(APPEAL S) HELD THAT SINCE PAN NUMBER ALONG WITH TIN NUMBER OF THE DEDUC TOR WAS I.T.A. NO. 894/MDS/2013 4 MENTIONED ON THE CERTIFICATE AND THE ASSESSEES NAM E WAS ALSO MENTIONED IN THE TDS CERTIFICATE, IT WAS EVIDENT TH AT THE CERTIFICATES WERE ISSUED IN FAVOUR OF THE ASSESSEE. THE DELAY C ANNOT BE ATTRIBUTED TO THE ASSESSEE. THE CIT(APPEALS) DIREC TED THE ASSESSING OFFICER TO GRANT INTEREST U/S.244A ON THE SAID AMOUNT FROM APRIL 2007 TO SEPTEMBER 2011. THE CIT(APPEALS ) THUS ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED AGAINST THE ORDER OF THE CIT(APPEALS), T HE REVENUE HAS COME IN APPEAL BEFORE THE TRIBUNAL. TH E ONLY ISSUE RAISED BY THE REVENUE BEFORE THE TRIBUNAL IS GRANT OF EXCESSIVE INTEREST U/S.244A BY THE CIT(APPEALS). 4. SHRI T.N. BETGERI, APPEARING ON BEHALF OF THE RE VENUE SUBMITTED THAT THERE HAS BEEN DELAY ON THE PART OF THE ASSESSEE TO FURNISH TDS DETAILS. THE ASSESSEE HAD NOT FILED OR IGINAL TDS CERTIFICATES AT THE TIME OF FILING OF THE RETURN. THE TDS CERTIFICATES WERE FURNISHED BY THE ASSESSEE IN FEBRUARY/MARCH 20 11. THE DELAY IN PROCESSING OF REFUND HAS OCCURRED DUE TO T HE FAILURE OF THE ASSESSEE IN NOT PRODUCING THE ORIGINAL TDS CERTIFIC ATES. THE LD.DR VEHEMENTLY SUPPORTED THE ORDER OF ASSESSING OFFICER AND PRAYED FOR SETTING ASIDE THE IMPUGNED ORDER. I.T.A. NO. 894/MDS/2013 5 5. ON THE OTHER HAND, SHRI V.P. MANIKANDAN APPEARIN G ON BEHALF OF THE ASSESSEE SUPPORTING THE ORDER OF THE CIT(APPEALS) SUBMITTED THAT NO DELAY CAN BE ATTRIBUTED TO THE AS SESSEE. THE ASSESSEE HAD FURNISHED PHOTO COPIES OF TDS CERTIFIC ATES ALONG WITH RETURN OF INCOME. IN TWO TDS CERTIFICATES AMO UNTING TO ` 4,19,69,299/-, THE PAN OF THE ASSESSEE WAS NOT MENT IONED, FOR WHICH, THE ASSESSEE CANNOT BE HELD RESPONSIBLE. SU BSEQUENTLY, THE ASSESSEE HAD SUBMITTED CONFIRMATION LETTER FROM THE DEDUCTOR OF TDS IN RESPECT OF THE SAID TWO CERTIFICATES. TH E LD.AR FURTHER CONTENDED THAT THE ASSESSEE IS ENTITLED TO INTEREST U/S.244A ON THE ENTIRE AMOUNT FROM APRIL 2007 TO SEPTEMBER 2011. T HE AR OF THE ASSESSEE IN ORDER TO SUPPORT HIS CONTENTIONS RELIED ON THE FOLLOWING DECISIONS: I. PUNJAB STATE CO-OP. MILK PRODUCERS FEDERATION LTD. VS. CIT REPORTED AS 90 TTJ (CHD) 657; II. CIT VS. ETERNIT EVEREST LTD., REPORTED AS 12 SOT 40 (MUM) & III. CIT VS. LARSEN AND TOUBRO LTD., REPORTED AS 330 ITR 340 (BOM) 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES. WE HAVE ALSO PE RUSED THE I.T.A. NO. 894/MDS/2013 6 IMPUGNED ORDERS AS WELL AS THE JUDGMENTS/ORDERS REL IED ON BY THE AR FOR THE ASSESSEE. IT IS AN UN-DISPUTED FACT THA T THE ASSESSEE HAD FILED PHOTO COPIES OF THE TDS CERTIFICATES ALON G WITH RETURN OF INCOME. THE AMOUNTS OF TAX DEDUCTED AT SOURCE WERE CREDITED TO THE GOVERNMENT EXCHEQUER ON BEHALF OF THE ASSESSEE WITHIN THE SPECIFIED TIME. THE TDS CERTIFICATES FOR ` 8,48,08,944/- WERE ISSUED TO THE ASSESSEE IN RESPECT OF TAX DEDUCTED A T SOURCE. TDS CREDIT WAS ALLOWED TO THE ASSESSEE FOR ` 4,28,39,643/- AND INTEREST U/S.244A WAS GRANTED FROM 1 ST APRIL 2007 TO SEPTEMBER, 2011. IN RESPECT OF TWO TDS CERTIFICATES WHICH WERE HELD TO BE DEFECTIVE AS PAN OF THE ASSESSEE WAS NOT MENTIONED, THE ASSESSEE CANNOT BE FAULTED. IT WAS THE DUTY OF DEDUCTOR TO MENTION TH E COMPLETE DETAILS OF THE DEDUCTEE. HOWEVER, OTHER DETAILS VI Z., PAN AND TIN NUMBER OF THE DEDUCTOR AND THE NAME OF THE ASSESSEE WAS MENTIONED ON THOSE TDS CERTIFICATES. THE ASSESSEE HAD SUBSEQUENTLY FURNISHED CONFIRMATION LETTER FROM TH E DEDUCTOR I.E., M/S. DREDGING CORPORATION OF INDIA LIMITED IN RESPE CT OF THE DEFECTIVE TDS CERTIFICATES. 7. IT CANNOT BE SAID THAT THE ASSESSEE HAD NOT FURN ISHED THE DETAILS OF THE TDS FOR CLAIMING TDS BENEFIT. BY FI LING THE COPIES OF TDS CERTIFICATE ALONG WITH THE RETURN OF INCOME, TH E ASSESSEE HAD I.T.A. NO. 894/MDS/2013 7 DISCHARGED ITS ONUS. OUR VIEW IS FORTIFIED BY THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF CIT VS. ETERNIT EVEREST LTD., (SUPRA), WHEREIN IT HAS BEEN HELD THAT INTEREST ON REFUND CANNOT BE DENIED TO THE ASSESSEE MERELY BECA USE THE ASSESSEE FILED XEROX COPIES OF TDS CERTIFICATES AND NOT THE ORIGINAL CERTIFICATES WITH THE RETURN OF INCOME. DELAY IN FURNISHING ORIGINAL TDS CERTIFICATES CANNOT BE TREATED AS DELAY IN RESP ECT OF PROCEEDINGS RESULTING IN REFUND AND THE ASSESSEE IS ENTITLED TO INTEREST FROM FIRST DAY OF ASSESSMENT YEAR TO THE D ATE OF SIGNING OF THE REFUND VOUCHER. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. LARSEN AND TOUBRO LTD. (SUPRA). THE HONBLE HIGH COURT HAS HELD THAT WHER E BENEFIT OF TDS HAS BEEN ALLOWED TO THE ASSESSEE, INTEREST U/S. 244A CANNOT BE DENIED ONLY ON THE GROUND THAT TDS CERTIFICATES WERE NOT FURNISHED WITH THE RETURN OF INCOME. THE TAX WAS D EDUCTED AND DEPOSITED IN THE EXCHEQUER IN TIME. THE ASSESSEE I S ENTITLED TO THE BENEFIT OF INTEREST UNDER THE PROVISIONS OF SECTION 244A. 8. WE ARE OF THE CONSIDERED OPINION THAT IN THE INS TANT CASE, THE ASSESSEE HAD FURNISHED PHOTO COPIES OF THE TDS CERT IFICATES AT THE TIME OF FILING OF RETURN OF INCOME AND SUBSEQUENTLY , THE ORIGINAL TDS CERTIFICATES WERE ALSO FURNISHED. THE DELAY IN ISSUE OF REFUND I.T.A. NO. 894/MDS/2013 8 CANNOT BE ATTRIBUTED TO THE ASSESSEE. THE ASSESSEE IS ENTITLED TO CLAIM INTEREST U/S.244A W.E.F. 1 ST APRIL 2007 TO SEPTEMBER 2011. WE DO NOT FIND ANY INFIRMITY IN THE IMPUGNED ORDER. THE APPEAL OF THE REVENUE IS DISMISSED BEING DEVOID OF MERITS. ORDER PRONOUNCED ON WEDNESDAY, THE 20 TH NOVEMBER, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIK AS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 20 TH NOVEMBER, 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR