Shri. Ramaswamy Srinivasulu Naidu, Bangalore V. ITO, Bangalore

ITA 967/BANG/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5657 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 05-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZIMIK VASAHI ADD L
• Section: 143(3); 244A; 142(1)

Judgement Text

PAGE 1 OF 7 ITA NO.967/BANG/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE SHRI GEORGE GEORGE K, J.M. AND SHRI A MOHAN ALANKAMONY, A.M ITA NO.967/BANG/2010 (ASSESSMENT YEAR 2007-08) SHRI RAMASWAMY SRINIVASULU NAIDU, #2, 1 ST MAIN ROAD, GANDHI NAGAR, BANGALORE-9. - APPELLANT VS THE INCOME TAX OFFICER, WARD-3(4), BANGALORE. - RESPONDENT APPELLANT BY : SHRI NARENDRA SHARMA, ADVOC ATE RESPONDENT BY : SMT. JACINTA ZIMIK VASAHI, ADD L. CIT ORD ER PER GEORGE GEORGE K : THIS APPEAL INSTITUTED BY THE ASSESSEE ARISE OUT OF THE ORDER OF LEARNED CIT(A)-II, BANGALORE DATED 5/3/201 0. THE ASST. YEAR CONCERNED IS 2007-08. 2. GROUND NOS.1 AND 4 ARE GENERAL IN NATURE AND NO SPECIFIC ADJUDICATION IS CALLED FOR, HENCE, THE SAM E ARE DISMISSED. 3. GROUND NO.3 RELATES TO LEVY OF INTEREST U/S 234D OF THE I T ACT. PAGE 2 OF 7 ITA NO.967/BANG/2010 2 3.1 LEVY OF INTEREST U/S 234D IS MANDATORY AND CONSEQUENTIAL IN NATURE. THEREFORE, GROUND NO.3 IS DISMISSED. 4. THE REMAINING GROUND, NAMELY GROUND NO.2, RELATE S TO THE ISSUE OF REFUSING TO ALLOW CREDIT FOR A SUM OF RS.32,615/- BEING THE TAX COLLECTED AT SOURCE. 5. BRIEFLY STATED THE FACTS ARE AS FOLLOWS:- THE ASSESSEE IS AN INDIVIDUAL. HE DERIVED INCOM E FROM SALARY. IT IS ALSO CLAIMED THAT HE WAS RUNNING THE BUSINESS OF A WINE STORE. FOR THE RELEVANT ASST. YEAR, RETURN OF INCOM E WAS FILED ON 16/2/2008 DECLARING AN INCOME OF RS.1,12,900/-. IN THE RETURN OF INCOME FILED, THE ASSESSEE HAD CLAIMED A REFUND OF TAX COLLECTED AT SOURCE (TCS) AMOUNTING TO RS.32,615/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT AND REFUND CLAIM WAS GRANTED. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY BY ISSUANCE OF NOT ICES U/S 143(2) AND 142(1) OF THE ACT. ASSESSMENT WAS COMPL ETED VIDE ORDER DATED 30.11.2009 U/S 143(3) ACCEPTING THE INC OME RETURNED. HOWEVER, THE AO WITHDREW THE CREDIT OF TCS CLAIMED BY THE ASSESSEE AND REFUND GRANTED BY THE AO IN THE INTIMAT ION U/S 143(1) OF THE ACT, ON THE GROUND THAT THE ASSESSEE HAS NOT OFFERED ANY INCOME IN RESPECT OF TCS (WRONGLY MENTIONED AS TDS) IN THE RETURN OF INCOME AND HENCE, WAS NOT ENTITLED TO THE CREDIT OF TAX COLLECTED. PAGE 3 OF 7 ITA NO.967/BANG/2010 3 6. AGGRIEVED BY THE ORDER OF ASSESSMENT IN NOT GRAN TING THE CREDIT OF TCS, THE ASSESSEE PREFERRED APPEAL B EFORE THE CIT(A). 7. IT WAS CONTENDED THAT THE ASSESSEE WAS ENTITLED TO THE CLAIM OF TCS, AS THE SAME IS NOT IN THE NATURE OF TDS AND THAT THE ASSESSEE HAD OFFERED THE INCOME FROM WINE STORE IN THE RETURN OF INCOME. IT WAS SUBMITTED THAT THE ASSESS EE WAS ENTITLED TO THE CREDIT OF TCS, AS THE LESSEE OF THE ASSESSEE CANNOT CLAIM THE SAME, AS THE NAME OF THE ASSESSEE WAS ENTERED I N THE CERTIFICATE ISSUED BY M/S MSIL FOR COLLECTION OF TA X AT SOURCE. FURTHER IT WAS CONTENDED THAT THERE WAS NO REQUIREM ENT THAT THE ASSESSEE MUST OFFER TCS COLLECTED AS INCOME TO ALLO W CREDIT FOR THE SAME AND THE AO ERRONEOUSLY PRESUMED THAT THE AS SESSEE MUST OFFER THE SAME AS INCOME TO CLAIM CREDIT AND REFUND . 8. THE CIT(A), HOWEVER, REJECTED THE CONTENTIONS R AISED BY THE ASSESSEE AND DISMISSED THE APPEAL FILED BY HIM . THE RELEVANT FINDING OF THE CIT(A) READS AS FOLLOWS:- 5. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE APPELLANTS SUBMISSION AND ALSO PERUSED THE ASSESSMENT ORDER. THE FACTS AVAILABLE ON RECORD REVEALED THAT THE APPELLANT HAS GIVEN HIS SHOP TO RUN BUSINESS OF M/S SUDHA WINE STORES TO SRI ANIL FOR FINANCIAL YEAR 2006-07 FOR RS.200/- PER DAY IRRESPECTIVE OF THE PROFIT AND LOSS FROM THE PURCHASE AND SALES OF LIQUOR. IT IS ALSO OBSERVED THAT THE APPELLANT PURCHASED LIQUOR WORTH RS.29,38,150/- FROM M/S KARNATAKA STATE PAGE 4 OF 7 ITA NO.967/BANG/2010 4 BEVERAGE CORPORATION LTD., BANGALORE AND THE SELLER HAS COLLECTED AT SOURCE OF RS.32,615/- ACCORDINGLY ISSUED CERTIFICATE IN THE NAME OF THE APPELLANT AND THE SAME IS CLAIMED AS REFUNDABLE IN THE RETURN OF INCOME FILED BY THE APPELLANT. THE RETURN OF INCOME WAS PROCESSED U/S 143(2) OF THE ACT AND REFUND OF RS.34,250/- INCLUDING INTEREST U/S 244A WAS GRANTED WHILE ISSUING INTIMATION. FROM PERUSAL OF COMPUTATION OF INCOME, INCOME ARISING ON PURCHASE AND SALE OF LIQUOR WAS NOT OFFERED IN THE APPELLANTS HANDS. IT IS RELEVANT T O MENTION THE PROVISIONS SUB-SECTION (4) OF SECTION 206C OF THE ACT. (4) ANY AMOUNT COLLECTED IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION AND PAID UNDER SUB-SECTION (3) SHALL BE DEEMED AS PAYMENT OF TAX ON BEHALF OF THE PERSON FROM WHOM THE AMOUNT HAS BEEN COLLECTED AND CREDITED SHALL BE GIVEN TO HIM FOR THE AMOUNT SO COLLECTED ON THE PRODUCTION OF THE CERTIFICATE FURNISHED UNDER SUB-SECTION (5) IN THE ASSESSMENT MADE UNDER THIS ACT FOR THE ASSESSMENT YEAR FOR WHICH SUCH INCOME IS ASSESSABLE. 5.1 A PLAIN READING THE FOREGOING SECTION, IT IS CLEAR THAT CREDIT FOR TCS WOULD BE ALLOWABLE FOR THE ASSESSMENT YEAR FOR WHICH SUCH INCOME IS ASSESSABLE. 6. IT IS WELL SETTLED THAT A TAX CREDIT CAN BE GIVEN ONLY IN CASE WHERE THE TAX IS PAID ON THE INCOME IN RESPECT OF WHICH DEDUCTION HAS BEEN MADE AT SOURCE AND WHICH IS OFFERED FOR ASSESSMENT. CIT V TANJORE PARMANT BANK LTD. PAGE 5 OF 7 ITA NO.967/BANG/2010 5 (1984) 149 ITR 788 (MAD.). THUS, AN ASSESSEE IN WHOSE HANDS A PARTICULAR INCOME IS NOT TAKEN IS NOT ENTITLED TO GET THE CREDIT IN RESPECT OF TAX DEDUCTED AT SOURCES IN RESPECT OF SUCH INCOME. MADRAS COATS LTD. V CIT (1986) 158 ITR 697 (MAD.). IN VIEW OF THE RATIO OF DECISION OF THE HONBLE HIGH COURT OF MADRAS, THE APPELLANT HAS NOT OFFERED ANY INCOME IN RESPECT OF WHICH TCS HAS BEEN MADE, IS NOT ENTITLED FOR CREDIT FOR THE SAME. THEREFORE, I DO NOT FIND ANY INFORMITIES IN AOS ACTION. HENCE WITHDRAWALS OF REFUND OF RS.34,250/- IS UPHELD. 9. THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LEA RNED CIT(A), PREFERRED APPEAL BEFORE US. 10. THE LEARNED AR REITERATED THE SUBMISSION MADE BEFORE THE INCOME TAX AUTHORITIES. HE ALSO RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF SUPREME RENEWABLE EN ERGY LTD. V ITO 3 ITR (TRIBUNAL) 339 (CHENNAI) AND CONTENDED TH AT CREDIT FOR TCS IS TO BE GRANTED EVEN WHEN INCOME FROM WHICH DE DUCTION MADE IS NOT OFFERED TO TAX. IT WAS SUBMITTED THAT, HOW EVER, IN THIS CASE, INCOME FROM RUNNING A WINE SHOP WAS DISCLOSED IN THE RETURN OF INCOME AND THEREFORE, THE CONCLUSION OF THE INCO ME TAX AUTHORITIES IN STATING THAT NO INCOME HAS BEEN OFFE RED TO TAX FOR WHICH TCS HAS BEEN MADE, IS WITHOUT ANY MERITS. 11. THE LEARNED DR ON THE OTHER HAND, RELIED ON TH E PROVISIONS OF SECTION 206C(4) OF THE ACT AND STATED THAT UNLESS THE INCOME FOR WHICH TAX COLLECTION HAS BEEN OFFERED FO R TAX, TCS IS NOT ENTITLED FOR CREDIT. PAGE 6 OF 7 ITA NO.967/BANG/2010 6 12. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT FORM NO.27-D IS ISSUED IN THE NAME OF THE ASSESSEE AND NOT IN THE N AME OF SHRI ANIL. IT IS ALSO A FACT THAT THE CREDIT FOR TCS HAS NOT B EEN CLAIMED BY SHRI ANIL. IN THE INSTANT CASE, THE ASSESSEE IS DE RIVING DAILY INCOME OF RS.200/- AND THE SAME HAS BEEN OFFERED AS BUSINE SS INCOME FROM SHRI ANIL AND FURTHER THE TRANSACTIONS OF PURC HASE ARE ALL BEING MADE IN THE NAME OF THE ASSESSEE AND THUS, ON THIS COUNT ITSELF, THE ASSESSEE SHOULD BE GIVEN CREDIT FOR TCS IN HIS RETURN. RELIANCE IS PLACED ON THE DECISION OF THE HONBLE C HENNAI TRIBUNAL IN THE CASE OF SUPREME RENEWABLE ENERGY LTD. VS ITO 3 I TR (TRIB.) 339 SQUARELY COVERS THE INSTANT CASE, WHEREIN THE HO NBLE TRIBUNAL HAS HELD AS UNDER:- '9. FROM THE ABOVE, IT IS CLEAR THAT WHEN A PARTICULAR INCOME IS RECEIVED BY THE ASSESSEE AFTER DEDUCTION OF TAX AT SOURCE AND THE SAID TDS HAS BEEN DULY DEPOSITED WITH THE GOVERNMENT AND THE ASSESSEE HAS RECEIVED THE REQUISITE CERTIFICATE TO THIS EFFECT, THEN ON PRODUCTION OF THE SAID CERTIFICATE THE ASSESSEE BECOMES ENTITLED FOR THE CREDIT OF TDS EVEN IF THE ASSESSEE HAS NOT DIRECTLY OFFERED THE SAID INCOME FOR TAX AS THE ASSESSEE CONSIDERED THE SAME WAS NOT LIABLE TO TAX. 12.1 THE DECISION OF THE HONBLE MADRAS HIGH COUR T IN THE CASE OF CIT V TANJORE PARMANT BANK LTD. 149 ITR 788 & MADRAS COATS LTD. V CIT 158 ITR 697 RELIED UPON BY THE LEAR NED CIT(A) IN FACT SUPPORT THE CONTENTION OF THE ASSESSEE. THE R ATIO OF THE SAID PAGE 7 OF 7 ITA NO.967/BANG/2010 7 TWO DECISIONS OF THE MADRAS HIGH COURT IS FOR THE P ROPOSITION THAT CREDIT FOR TDS CAN BE GIVEN ONLY IF INCOME IS OFFERE D TO TAX. THERE CAN BE NO DISPUTE THAT THE ASSESSEE HAS OFFERED THE INCOME OF RS.200/- RECEIVED DAILY BY THE ASSESSEE AS BUSINESS I NCOME IN THE RETURN OF THE ASSESSEE AND THE SAME IS TO BE TREATE D AS INCOME FROM CARRYING OUT THE SALE OF LIQUOR. AS PER THE SA ID AGREEMENT, THE ASSESSEE HAS EARNED RS.200/-. THE DECISION OF THE HONBLE CHENNAI TRIBUNAL IS SQUARELY APPLICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE SINCE THE CLAIMS OF TCS HAS NOT BEEN C LAIMED BY THE OTHER PERSON IN HIS RETURN AND FURTHER ALL THE PURC HASES ARE MADE IN THE NAME OF THE ASSESSEE, AS THE ASSESSEE IS THE LI CENSE HOLDER. 12.2 IN THE LIGHT OF THE ABOVE, WE ALLOW THE APPEA L OF THE ASSESSEE BY GIVING CREDIT FOR THE TCS MADE. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS ALLOWED. THE ORDER PRONOUNCED ON FRIDAY, THE 8 TH DAY OF APRIL, 2011 AT BANGALORE. SD/- SD/- (A MOHAN ALANKAMONY) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER COPY TO : 1. THE REVENUE 2. THE ASSESSEE 3. THE C IT CONCERNED. 4. THE CIT(A) CONCERNED. 5. DR 6. GF MSP/14/3. BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.