M/s Arihant Foam (P) Ltd., Chandigarh V. ITO, Chandigarh

ITA 895/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6755 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 31-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 201(1); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO 895/CHD/2017 ASSESSMENT YEAR : 2013-14 M/S ARIHANT FOAM (P) LTD., VS. THE ITO, #1422, SECTOR 34-C, WARD 4(3), CHANDIGARH. CHANDIGARH. PAN NO. AACCA9036F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI MANJIT SINGH, SR.DR DATE OF HEARING : 03.08.2017 DATE OF PRONOUNCEMENT : 06.10.2017 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 15.03.2017 OF LD. CIT (APPEALS)-2 CHANDIGARH PERTAINING TO 2013-14 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS )-2, CHANDIGARH HAS ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER WITH REGARD TO ADDITION OF RS. 29,19,602/- ON ACCOUNT OF NON-DEDUC TION OF TDS ON INTEREST PAID TO NON-BANKING FINANCIAL COMPANY I.E. M/S BAJAJ FINANCE LTD. 2. THAT THE CIT(A) HAS FAILED TO APPRECIATE THE FACT T HAT LOAN AGAINST WHICH, INTEREST HAS BEEN PAID TO M/S BAJAJ FINANCE LTD. IS AS PER BOOKS OF ACCOUNTS OF THE COMPANY AND ON WHICH, INTEREST HAS BEEN PAID AND MERELY ON SOME TECHNICAL GROUND, THE CIT (A) HAS CONFIRMED THE ADDITION, WHICH IS AGAINST THE FACTUAL FACTS AND CI RCUMSTANCES OF THE CASE. 3. THAT THE WORTHY CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT AGAINST SUCH LOAN, WHICH HAS BEEN REFLECTED IN THE BOOKS OF THE COMPANY, THE PRINCIPLE AND INTEREST PAYMENTS HAVE BEEN CLAIMED I N THE BOOKS OF ACCOUNTS OF THE COMPANY AND CREDIT OF TDS HAS BEEN ALLOWED TO THE COMPANY AND WHICH FACT HAS TOTALLY BEEN IGNORED BY THE ASSESSING OFFICER. 2. THE LD. AR INVITING ATTENTION TO THE IMPUGNED OR DERS SUBMITTED THAT IN REGARD TO THE ISSUE BEFORE THE CIT(A) NAMELY; DISALLOWANCE U/S 40 A(IA) MADE BY THE AO ON ACCOUNT OF NON- DEDUCTION OF TAX U/S 194A WHEREIN THE AO HAD DISALL OWED INTEREST PAYMENT MADE BY THE ASSESSEE TO M/S BAJAJ AUTO FINANCE LTD. AND M/S BAJ AJ CAPITAL FINANCE LTD., THE ASSESSEE HAD PLACED RELIANCE UPON THE DECISION OF THE APEX COURT IN THE CASE OF HINDUSTAN COCO COLA BEVERAGES PVT. LTD. AND DECISION OF DELHI HIGH COUR T IN THE CASE OF CIT VS ANSALS LANDMARK TOWNSHIP (P) LTD. AND HAD SOUGHT TO PLACE ADDITIONA L EVIDENCE IN SUPPORT OF ITS CLAIM BEFORE THE CIT(A). THE EVIDENCE WAS ADMITTED, HOWEVER, TH E CLAIM WAS REJECTED HOLDING AS UNDER : 5.3.3 THE CERTIFICATE FILED BY THE APPELLANT U/S 2 01(1) AS ADDITIONAL EVIDENCE IS ADMITTED IN THE INTEREST OF NATURAL JUSTICE AND IS ADJUDICAT ED. FROM PERUSAL OF THE AFORESAID CERTIFICATE U/S 201(1) IT IS CLEAR THAT THE APPELLA NT BEING PAYER AND M/S BAJAJ CAPITAL ITA 895/CHD/2017 A.Y. 2013-14 PAGE 2 OF 2 FINANCE LTD. AND M/S BAJAJ AUTO FINANCE LTD. AS PAY EE ARE NOT MENTIONED IN THE CERTIFICATE. HENCE APPELLANT HAS FAILED TO ESTABLIS H THAT THE INTEREST PAID BY THE APPELLANT HAVE BEEN INCLUDED IN THE INCOME BY THE PAYEE COMPA NIES FOR THE RELEVANT PERIOD AND TAX DUE HAVE BEEN PAID ON SUCH INCOME BY THE PAYEE. THE REFORE, THE RATIO OF THE JUDGEMENT OF HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE (P) LTD. (SUPRA) IS NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES IN TH E CASE OF THE APPELLANT. APPELLANT HAS FAILED TO DEDUCT TAX ON INTEREST PAYMENT TO M/S BAJ AJ AUTO FINANCE LTD. AND M/S BAJAJ CAPITAL FINANCE LTD. AS PER THE PROVISIONS OF SECTI ON 194A AND THEREFORE AO IS JUSTIFIED IN MAKING DISALLOWANCE U/S 40(A)(IA) OF THE ACT. TH E DISALLOWANCE MADE BY THE AO O F RS. 29,19,602/- IS CONFIRMED. GROUND OF APPEAL NO 2 IS DISMISSED. 2.1. IN THE SAID BACKGROUND, IT WAS SUBMITTED BY TH E LD. AR THAT THE NAME OF PAYEE HAD UNDERGONE A CHANGE AND HAD BEEN NAMED AS BAJAJ FINA NCE LTD., EVIDENCE IN SUPPORT OF THE SAME WAS PLACED ON RECORD. IT WAS SUBMITTED THAT IN VIE W OF THIS FACT, A CERTIFICATE MADE AVAILABLE BY THE ASSESSEE IN SUPPORT OF ITS CLAIM DID NOT MENTIO N M/S BAJAJ AUTO FINANCE OR M/S BAJAJ CAPITAL FINANCE LTD. (PAPER BOOK PAGE NO. 7) AND IN STEAD MENTIONED ONLY BAJAJ FINANCE LTD. AND CERTIFICATE OF THE CHARTERED ACCOUNTANT, COPY P LACED AT PAGES 8-9 CLEARLY MENTIONS THE NAME OF THE ASSESSEE AS M/S BAJAJ FINANCE LTD . IT WAS HIS SUBMISSION THAT HAD THE CIT(A) CONFRONTED THIS FACT TO THE ASSESSEE, IT WOULD HAVE BEEN PROPERLY EXPLAINED. IN THE CIRCUMSTANCES, IT WAS HIS LIMITED PRAYER THAT LET T HE FULL FACTS BE TAKEN INTO CONSIDERATION AND THE ISSUE BE REMANDED TO THE AO. FOR VERIFICATION. THE LD. SR.DR CONSIDERING THE RECORD, HAD NO OBJECTION TO THE PRAYER OF THE LD. AR. 4. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MAT ERIAL AVAILABLE ON RECORD. IN THE LIGHT OF THE SUBMISSIONS OF THE PARTIES BEFORE THE BENCH, THE CLAIM THAT THE NAME OF THE COMPANY M/S BAJAJ CAPITAL FINANCE CHANGED TO M/S BAJAJ FINANCE, SUPPORTED BY COPY OF CERTIFICATE FILED ON RECORD IT WOULD BE APPROPRIATE TO RESTORE THE ISSUE TO THE FILE OF THE AO WITH DIRECTION TO DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING THE AS SESSEE REASONABLE OPPORTUNITY OF BEING HEARD. THE ASSESSEE IN ITS OWN INTEREST IS DIRECTE D TO PLACE FULL AND COMPLETE FACTS IN SUPPORT OF ITS CLAIM AND UTILIZE THE OPPORTUNITY FAIRLY AND CO MPLETELY AND IN THE EVENTUALITY OF ABUSE OF THE SAME, AO WOULD BE AT LIBERTY TO PASS THE ORDER ON T HE BASIS OF MATERIAL AVAILABLE ON RECORD. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH OCTOBER, 2017. SD/- (DIVA SINGH) JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.