DCIT, CEN CIR-XX, KOLKATA, Kolkata V. M/s Chemical & Metallurgical Design Co. Ltd., New Delhi

ITSSA 89/KOL/2014

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3421 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 19-07-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 28-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOULEAN HANGSHING

Judgement Text

1 IT(SS)A.NO.89/KOL/2014-M/S. CHEMICAL & METALLURGICA L DESIGN CO.LTD. A.Y.2007-08 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI WAS EEM AHMED, AM ] IT(SS)A.NO.89/KOL/2014 ASSESSMENT YEAR : 2007-08 D.C.I.T., CENTRAL CIRCLE-XX, -VERSUS- M/S. CHE MICAL & METALLURGICAL KOLKATA. DESIGN CO.LTD., KOLKATA (PAN:AACCP 4492 L) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI GOULEAN HANGSHING, CIT( DR) FOR THE RESPONDENT: NONE DATE OF HEARING : 30.08.2017. DATE OF PRONOUNCEMENT : 30.08.2017. ORDER PER N.V.VASUDEVAN, JM: THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 18.03.2014 OF CIT(A)-CENTRAL-III, KOLKATA RELATING TO A.Y.2007-0 8. 2. GROUNDS OF APPEAL RAISED BY THE REVENUE REA D AS FOLLOWS :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT (A) ERRED IN ALLOWING THE FULL CREDIT OF TDS ,IGNORING THE FACT THAT THER E WAS SHORT DISCLOSURE OF RECEIPT RELATED TO TDS. 2. THE APPELLANT CRAVES THE LEAVE TO MAKE ANY ADD ITION, ALTERATION, MODIFICATION AND REMODELING OR WITHDRAWING OF THE GROUNDS . 3. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUS INESS OF RUNNING A BUSINESS CENTRE AND PROVIDING SERVICES OF HOUSE KEEPING AND OTHER C ONSULTANCY SERVICES. IN THE ASSESSMENT PROCEEDINGS THE AO DID NOT ALLOW CREDIT FOR TAX DEDUCTED AT SOURCE ON THE GROUND THAT THE RECEIPTS FOR WHICH TAX WAS DEDUCTED AT SOURCE BY THE PAYEE HAD NOT BEEN DECLARED BY THE ASSESSEE IN THE RETURN OF INCO ME FILED FOR THE RELEVANT ASSESSMENT YEAR. UNDER SECTION 199(1) OF THE INCOME TAX ACT, 1 961 (ACT) CREDIT FOR TAX DEDUCTED 2 IT(SS)A.NO.89/KOL/2014-M/S. CHEMICAL & METALLURGICA L DESIGN CO.LTD. A.Y.2007-08 AT SOURCE SHALL BE GIVEN TO THE PERSON FROM WHOSE I NCOME DEDUCTION WAS MADE IN THE ASSESSMENT YEAR FOR WHICH SUCH INCOME IS ASSESSABLE . SINCE THE INCOME FOR WHICH TAX WAS DEDUCTED AT SOURCE HAD NOT BEEN DECLARED IN THE RETURN OF INCOME THE AO DID NOT CREDIT FOR THE TAX DEDUCTED AT SOURCE TO THE EXTENT OF RS.17,02,462/- 4. ON APPEAL BY THE ASSESSEE CIT(A) FOUND THAT THE INCOME IN RESPECT OF WHICH TAX WAS DEDUCTED AT SOURCE BY THE PAYEE HAD BEEN OFFERE D TO TAX BY THE ASSESSEE. THE CIT(A) FOUND THAT THE ASSESSEE HAD FURNISHED BEFORE THE AO ENTIRE 472 + 5 INSTANCES OF TDS, GIVING THE DETAILED BREAK-UP OF 'RECEIPT AS PER ACCOUNTS', 'RECEIPT AS PER TDS' 'DIFFERENCE' 'TDS' AND REMARKS' . THE DIFFERENCES WERE IN 68 INSTANCES, AND THE ASSESSEE HAD DULY EXPLAINED IN THE REMARKS' COLUMN THE RESPECTIVE REASON FOR THE DIFFERENCE - MOSTLY BEING INSTANCES OF SERVICE HAVI NG BEEN INCLUDED, AND IN SOME INSTANCES ALSO VAT. THE CIT(A) ALSO FOUND THAT TH E AO HAD NOT MADE THE IMPUGNED ADDITION BY LINKING INSTANCES OF RECEIPTS ON WHICH TAX WAS DEDUCTED AT SOURCE FOR WHICH THE ASSESSEE CLAIMED CREDIT BUT THE DISALLOWA NCE WAS MADE FOLLOWING ARITHMETICAL PRO-RATA WORKING TO ARRIVE AT THE TDS ALLOWABLE: [TOTAL TDS CLAIM X TOTAL RECEIPT AS PER ACCOUNTS] /TOTAL RECEIPT AS PE R TDS CERTIFICATE. WHICH IS [2,01,09,464 X 10,48,10, 159J/9,59.36.958 = 1,84,07 ,002. AMOUNT DISALLOWED = [TDS CLAIMED (-) TDS ALLOWABLE AS PER PRO-RATA WORKING], WHICH WORKS OUT TO [2,01,09,464 (-) 1,84,07,002] = 17,02,462. THE CIT(A) THEREFORE HELD THAT WITHOUT POINTING ANY SPECIFIC INSTANCE, OVERLOOKING THE EXPLANATION IN T HE 'REMARKS' COLUMN, THE AO HAS SIMPLY RESORTED TO A GENERAL PRO-RATA ESTIMATION. H E ALSO HELD THAT THE ISSUE OF CREDIT FOR TDS COULD NOT BE SUBJECT MATTER OF PRESENT ASSE SSMENT PROCEEDINGS BECAUSE THE SAID ASSESSMENT WAS ONE U/S.153A READ WITH SEC.143( 3) OF THE ACT AND FOR THE RELEVANT AY THERE WAS ALREADY AN ASSESSMENT COMPLETED U/S.14 3(3) OF THE ACT PRIOR TO THE DATE OF SEARCH AND THERE WAS NO INCRIMINATING MATERIAL F OUND IN THE COURSE OF SEARCH WHICH COULD JUSTIFY DENYING CREDIT FOR TAX DEDUCTED AT SO URCE TO THE ASSESSEE. THE ADDITION MADE BY THE AO WAS ACCORDINGLY DELETED BY THE CIT(A ). 3 IT(SS)A.NO.89/KOL/2014-M/S. CHEMICAL & METALLURGICA L DESIGN CO.LTD. A.Y.2007-08 5. AGGRIEVED BY THE ORDER OF CIT(A) THE REVENUE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 6. THE LD. DR RELIED ON THE ORDER OF AO AND REI TERATED THE STAND OF THE REVENUE AS REFLECTED IN THE GROUNDS OF APPEAL. NONE APPEARED O N BEHALF OF THE ASSESSEE. 7. WE HAVE PERUSED THE ORDER OF CIT(A) AND WE F IND THAT CIT(A) ON CONSIDERATION OF THE INDIVIDUAL TDS CERTIFICATES COME TO THE CONC LUSION THAT RECEIPTS FOR WHICH TAX WAS DEDUCTED AT SOURCE HAVE BEEN DULY DECLARED BY T HE ASSESSEE AS INCOME FOR THE RELEVANT ASSESSMENT YEAR I.E. 2007-08. THE CIT(A) H AS ALSO FOUND THAT THE MARGINAL DIFFERENCE WAS OWING TO THE PORTION OF THE AMOUNT B EING ATTRIBUTABLE TOWARDS SERVICE TAX AND VAT. THIS FINDING OF CIT(A) HAS NOT BEEN FO UND TO BE INCORRECT BEFORE US. THAT APART, IT IS ALSO SEEN THAT THE ISSUE OF CREDI T FOR TDS COULD NOT BE SUBJECT MATTER OF PRESENT ASSESSMENT PROCEEDINGS BECAUSE THE IMPUG NED ASSESSMENT WAS ONE U/S.153A READ WITH SEC.143(3) OF THE ACT AND FOR TH E RELEVANT AY THERE WAS ALREADY AN ASSESSMENT COMPLETED U/S.143(3) OF THE ACT PRIOR TO THE DATE OF SEARCH AND THERE WAS NO INCRIMINATING MATERIAL FOUND IN THE COURSE OF SE ARCH WHICH COULD JUSTIFY DENYING CREDIT FOR TAX DEDUCTED AT SOURCE TO THE ASSESSEE. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT ORDER OF CIT(A) ON THIS ISSUE HAS TO BE C ONFIRMED. WE ACCORDINGLY CONFIRM THE ORDER OF CIT(A) AND DISMISS THE APPEAL OF THE R EVENUE. 8. IN THE RESULT THE APPEAL BY THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON 30.08.2017. SD/- SD/- [WASEEM AHMED] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30.08.2017. [RG PS] 4 IT(SS)A.NO.89/KOL/2014-M/S. CHEMICAL & METALLURGICA L DESIGN CO.LTD. A.Y.2007-08 COPY OF THE ORDER FORWARDED TO: 1.M/S. CHEMICAL & METALLURGICAL DESIGN CO. LTD., 25 , COMMUNITY CENTRE, EAST OF KAILASH, NEW DELHI 110065. 2.D.C.I.T., CENTRAL CIRCLE-XX, KOLKATA. 3. CIT(A)-CENTRAL-III, KOLKATA. 4. CIT-CENTRAL-III, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEA D OF OFFICE/DDO, ITAT KOLKATA BENCHES