Hella India Lighting Ltd., New Delhi V. DCIT, Circle- 11(1), New Delhi

ITA 897/DEL/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4183 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 05-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MUSTAQ AHMAD
• Keywords: Set aside
• Section: 143(3); 40(a)(ia); 201(1); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SHRI G.S. PANNU, HONBLE VICE PRESIDENT & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.-897/DEL/2018 (ASSESSMENT YEAR: 2013-14) HALLA INDIA LIGHTING LTD K-61B, LGF, KALKAJI NEW DELHI. VS. DCIT CIRCLE-11 (1), NEW DELHI. PAN NO. AAACJ 01013G APPELLANT RESPONDENT ASSESSEE BY SH. MUSTAQ AHMAD, CA REVENUE BY MS RAKHI VIMAL , SR. DR DATE OF HEARING: 10/2/2021 PRONOUNCEMENT ON 10/2/2021 ORDER PER K. NARASIMHA CHARY, JM AGGRIEVED BY THE ORDER DATED 6/11/2017 IN APPEAL N O. 644/16- 17 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-35, NEW DELHI (LD. CIT(A)) IN THE CASE OF HALLA INDIA LIGHTING LTD (THE ASSESSEE), FOR THE ASSESSMENT YEAR 2013-14, ASSESS EE PREFERRED THIS APPEAL ON THE SOLE GROUND OF MAKING ADDITION OF RS. 34, 40, 233/-ON ACCOUNT OF LEGAL AND PROFESSIONAL CHARGES BY THE LE ARNED ASSESSING OFFICER. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A COMPANY 2 ENGAGED IN THE BUSINESS OF MANUFACTURING OF AUTOMOB ILE COMPONENTS INCLUDING HEADLAMPS, TAILLAMPS, HORNS, SWITCHES, BU LBS, SUNDRY LAMPS, WIPER ARMS AND WIPER BLADES. FOR THE ASSESSMENT YEA R 2013-14 HAVE FILED THEIR RETURN OF INCOME ON 29/11/2013 DECLARIN G A LOSS OF RS. 2, 94, 12, 186/-. ASSESSMENT UNDER SECTION 143(3) OF THE I NCOME TAX ACT, 1961 (FOR SHORT THE ACT) WAS COMPLETE BY ORDER DA TED 23/3/2016 BY MAKING ADDITION OF RS. 34, 40, 233/-ON ACCOUNT OF D ISALLOWANCE OF THE LEGAL AND PROFESSIONAL FEE ON THE GROUND THAT THE A SSESSEE HAD NOT FOLLOWED THE PROVISIONS OF RULE 31 ACB AND THEREFOR E SUCH AMOUNT WAS DISALLOWABLE UNDER SECTION 40(A)(IA) OF THE ACT SIN CE THE ASSESSEE FAILED TO DEDUCT THE TAX ON THE PROVISIONAL FEE PAID BY IT . ON THE VERY SAME GROUNDS LD. CIT(A) DISMISSED THE APPEAL PREFERRED B Y THE ASSESSEE. HENCE THIS APPEAL. 3. IT IS THE SUBMISSION OF THE LD. AR THAT THE PAYM ENT OF LEGAL AND PROFESSIONAL FEE MADE BY THE ASSESSEE WAS TO M/S HA LLA INDIA AUTOMOTIVE PVT. LTD WHICH IS A SISTER CONCERN OF TH E ASSESSEE; THAT HALLA INDIA AUTOMATIVE PVT. LTD DULY DECLARED THE RECEIPT S IN THEIR FINANCIAL STATEMENT WHILE FILING THE RETURN OF INCOME; AND TH AT SUCH AN AMOUNT WAS WELL SHORT IN THE PROFIT AND LOSS ACCOUNT UNDER MISCELLANEOUS INCOME. HE FURTHER SUBMITTED THAT HALLA INDIA AUTOM ATIVE PVT. LTD WHICH IS A SISTER CONCERN OF THE ASSESSEE IS ALSO B EING ASSESSED BY THE SAME LEARNED ASSESSING OFFICER AND THEREFORE, MEREL Y BY INSISTING THE TECHNICAL COMPLIANCE WITH THE FILING OF THE CERTIFI CATE BY AN ACCOUNTANT, THE AUTHORITIES COULD HAVE AS WELL LOOK INTO THE RE TURN OF INCOME FILED BY THE SISTER CONCERN. HE PLACED RELIANCE ON THE DE CISION OF THE HONBLE APEX COURT IN THE CASE OF HINDUSTAN COCA-COLA BEVER AGES PVT. LTD 293 3 ITR 226 (SC) TO ARGUE THAT RECOVERY ONCE AGAIN CANN OT BE MADE FROM THE DIRECTOR WHERE THEDEDUCTEEINCLUDED THE INCOME O N WHICH TAX WAS ALLEGED TO HAVE BEEN SHORTED DEDUCTED IN ITS TAXABL E INCOME AND PAID TAXES THEREON. 4. PER CONTRA, LD. DR SUBMITTED THAT SECTION 201(1) OF THE ACT GIVES EXEMPTION FROM DEDUCTION OF TAX AT SOURCE TO THE PERSON WHO FURNISHES A CERTIFICATE TO THIS EFFECT FROM AN ACCO UNTANT IN SUCH FORM AS MAY BE PRESCRIBED AND THIS PRESCRIPTION IS GIVEN BY RULE 31 ACB READ WITH FORM NO. 26A AND SINCE THE ASSESSEE FAILED TO COMPLY WITH THE SAME, THE AUTHORITIES BELOW ARE JUSTIFIED IN MAKING AND SUSTAINING THE DISALLOWANCE. 5. IN REPLY, LD. AR SUBMITTED THAT IN VIEW OF THE D ECISION IN HINDUSTAN COCA-COLA BEVERAGES (SUPRA) RECOVERY ONCE AGAIN CANNOT BE MADE FROM THE DEDUCTOR AND THE ASSESSEE IS READY TO FILE THE CERTIFICATE IN PRESCRIBED FORM IF AN OPPORTUNITY IS GIVEN. 6. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. IT COULD BE SEEN F ROM THE PAPERBOOK, THE ASSESSEE IS FURNISHING THE STATEMENT OF ACCOUNT OF THE DEDUCTEE WITH ITS ITR AND BALANCE SHEET TO ESTABLISH THEIR C LAIM THAT THE SISTER CONCERN HAD ALREADY DECLARED THIS AMOUNT IN THEIR R ETURN OF INCOME AND OFFERED THE SAME TO TAX. FURTHER THE ASSESSEE IS RE ADY TO FILE THE REQUISITE CERTIFICATE IN PRESCRIBED FORM BEFORE THE LEARNED ASSESSING OFFICER. IN VIEW OF THE DECISION OF THE HONBLE APE X COURT IN THE CASE OF HINDUSTAN COCA-COLA (SUPRA), WHERE THE DEDUCTEE ALR EADY INCLUDED THE INCOME RELEVANT TO THE PRESENT DISALLOWANCE IN THEI R RETURN OF INCOME 4 AND OFFERED THE SAME TO THE TAX, RECOVERY AGAIN IS IMPERMISSIBLE. WE HAVE TO LOOK AT NOT ONLY THE FORM OF LAW BUT ALSO T HE SPIRIT OF LAW. 7. IN THE CIRCUMSTANCES, WHERE OF THE CONSIDERED OP INION THAT THIS IS A FIT CASE TO SET ASIDE THE IMPUGNED ORDER AND REMAND ISSUE TO THE FILE OF THE LEARNED ASSESSING OFFICER TO CONSID ER THE SAME IN THE LIGHT OF THE SUBMISSIONS MADE BY THE ASSESSEE AND A LSO THE CERTIFICATE UNDER SECTION 31 ACB TO BE FILED BY THE ASSESSEE AN D TAKE A FRESH VIEW. WE ACCORDINGLY ALLOW THE GROUND FOR STATISTICAL PUR POSE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT IMMEDIATELY ON THE CONCLUSION OF THE HEARING IN VIRTUAL MODE ON THIS T HE 10 TH DAY OF FEBRUARY, 2021. SD/- SD/- (G.S. PANNU) (K. NARSIMHA CHARY) VICE PRESIDENT JUDICIAL MEMBE R DATED: 10/2/2021