NIPPON AUDIOTRONIX PRIVATE LIMITED,NEW DELHI V. ACIT CIRCLE 16(1), NEW DELHI

ITA 2137/DEL/2024

AI Insights

The case involves M/s Nippon Audiotronix Private Limited appealing against the order of the Ld. Commissioner of Income Tax (Appeals)-2, Coimbatore, which confirmed a short allowance of TDS credit by the CPC amounting to Rs.31,33,777. The dispute centered on the computation of TDS credit in relation to the turnover figures reported in the Profit & Loss account and Form 26AS. The assessee argued that the TDS credit was unjustly reduced based on an incorrect comparison of turnover figures, which included GST in the 26AS turnover but not in the P&L turnover. The Tribunal found that the matter required further verification to determine the correct application of TDS as per the provisions of section 194Q of the Income Tax Act, 1961, and the guidelines provided in the CBDT Circular.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 31718 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 18-11-2024
• Assessment Year: 2023-2024
• Appeal Filed On: 02-05-2024
• Other Referred Cases: Chowringhee Sales Bureau Pvt. Ltd. (1973) 87 ITR 542 (SC), Jamnalla Narashimharao (1993) 200 ITR 588 (SC), CIT vs T. Naggi Reddy (1993) 202 ITR 253
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KRISHNA K. RAMAWAT
• Assessee Lawyers: A.K.SRIVASTAVA; SURESH GUPTA
• Keywords: Business income; Opportunity of being heard; TDS; FORM 26AS
• Section: 143(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘E’: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No.2137/Del/2024 [Assessment Year: 2023-24] M/s Nippon Audiotronix Private Limited, N-191, Greater Kailash-I, New Delhi-110048 Vs ACIT, Circle-16(1), New Delhi PAN-AAACN2163L Assessee Revenue Assessee by Sh. A.K. Srivastava, CA & Sh. Suresh Gupta, CA Revenue by Sh. Krishna K. Ramawat, Sr. DR Date of Hearing 18.11.2024 Date of Pronouncement 18.11.2024 ORDER PER BRAJESH KUMAR SINGH, AM, This appeal filed by the assessee is directed against the order dated 19.03.2024 of the Ld. Commissioner of Income Tax (Appeals)-2, Coimbatore, relating to Assessment Year 2023-24. 2. The grounds of appeal raised by the assessee are as under:- “1. That Ld. ADDL/JCIT (A) grossly erred in confirming the short allowance of TDS credit by CPC in the computation u/s 143(1) of the Act, wherein CPC restricted the TDS credit by computing TDS credit in ratios of \"Turnover as per P & L\" and \"Turnover as per 26AS\" resulting into short allowance in the amount of Rs.31,33,777/- of TDS credit -, which is bad in law and on facts of the case. 2. That the said disallowance is further bad in law and on case facts having been confirmed in non-consideration of the submitted case facts, vide a non-speaking order, simply by placing reliance on the judgements, the ratios of which are not at all applicable on facts of the case.” 2 ITA No.2137/Del/2024 3. Brief facts of the case:- The only dispute in this case is with respect to allowance of TDS credit by the CPC in the intimation issued u/s 143(1) of the Act, wherein, the CPC reduced the TDS credit claim of the assessee by an amount of Rs.31,33,777/-. The assessee had claimed total TDS credit as per ITR of Rs.6,51,02,050/-, whereas, TDS credit allowed by the CPC was Rs.6,19,68,273/-. The turnover of the assessee as per the profit & loss account was Rs.21,85,42,34,910/- and the turnover as per 26AS of the assessee was Rs.22,95,94,14,329/- and CPC restricted the TDS credit by computing TDS credit in ratios of “Turnover as per P & L” and “Turnover as per 26AS” resulting in short allowance of the TDS credit by Rs.31,33,777/-. As per the case synopsis filed by the assessee, the turnover in 26AS was shown on higher side by Rs.110 crores as compared to the turnover shown in P & L Account for the reason that mainly two parties M/s Suzuki Motors Gujarat Pvt. Ltd. and M/s Maruti Suzuki India Ltd. had deducted TDS u/s 194Q of the Act on the assessee’s sales to them on total bill amounts inclusive of GST, wherein, GST amount was approximately Rs.131 crores resulting into reflection of higher turnover in 26AS by the said corresponding amount. The said action of the CPC in restricting the TDS was also confirmed by the Ld. Addl./JCIT(A)-2, Coimbatore, which held that the action of the CPC in restricting the TDS claim as per Rule-37BA(4) r.w.s. 143(1)(a)(ii) was justified and also relied upon certain case laws including the decision of the Hon’ble Apex Court in the case of Chowringhee Sales Bureau Pvt. Ltd. (1973) 87 ITR 542 (SC), wherein, the Hon’ble Court has held that the indirect tax component should be included while calculating the gross turnover or sales receipts. 3 ITA No.2137/Del/2024 3.1. Against the above order, the assessee is in appeal before us. 4. The ld. AR filed a written synopsis, which is reproduced as under:- That the provisions of section 194Q of the Act, obligates a buyer of goods to deduct TDS of the seller @ 0.1% of their sales exclusive of taxes i.e. if sales value, say is Rs. 100/- + GST Rs. 18/-, TDS is deductible @ 0.1% on Rs.100/-. 2. That the CPC allowed TDS credit in the Intimation issued u/s 143 (1), as computed in the ratios of \"Turnover as per Profit & Loss Statement and that shown in 26AS\", resulting into short allowance of TDS credit in the amount of Rs.31,33,777/- as below: i.Total TDS credit claim as per ITR Rs.6.51 crores ii.Total turnover as per P & L Statement : Rs.2185 crores (copy of P & L Statement annexed) iii.Total turnover as per 26AS Rs.2295 crores (copy annexed) iv.TDS credit allowed (i x ii)/(iii) Rs.6.19 crores v.TDS credit short allowed (i-iv) RS.31.33 lakhs (Rs.31,33,777/-) That the turnover in 26AS is shown on the higher side by Rs.110 crores as compared to turnover shown in P & L A/c ,for the reason, mainly two parties as in para below, having deducted TDS u/s 194Q, on the assessee's sales to them on total bill amounts inclusive of GST, wherein GST amount was approx. Rs.131/- cores, resulting into reflection of higher turnover in 26AS by the said corresponding amount. That the confirmation of the said two parties, as in para below, filed before Ld. JCIT Appeal, confirming that they have deducted TDS on purchase values inclusive of GST, annexed at pages 27-30. That the figures of sales by assessee to these two parties as contained in Form 26AS, annexed at pages 32-34 (internal pages 1, 2 & 71 of Form 26AS) are as below: Name of purchaser of goods Total purchases (Rs.) TDS u/s 194Q (Rs.) Suzuki Motors Gujarat P. Ltd. 324,37,98,067/- 32,43,826/- Maruti Suzuki India Ltd. 537,47,65,861/- 53,82,445/- The above sale is inclusive of GST @18% hence the correct figure of sales net of GST, are as below. 4 ITA No.2137/Del/2024 Sr. No. Name of purchaser of Goods Net purchase Value excluding GST (Rs.) GST @ 18% Total Purchases including GST as per 26AS (Rs.) (A) Suzuki Motors Gujarat P. Ltd. 274,89,81,412/- 49,48,16,655/- 324,37,98,067/- (B) Maruti Suzuki India Ltd. 455,48,86,322/- 81,98,79,539/- 537,47,65,861 Total 730,38,67,734/- 131,46,96,194 861,85,63,928/- Hence the correct figure of total sales ofRs.2295,94,14,329/-, as per 26AS as in para 2(iii) above, should be reduced by the amount of Rs.131,46,96,194/- being GST included therein, Net Rs.2164,47,18,135/-. Therefore, the TDS credit is allowable as below:- i) Total receipts in P & L A/c (copy anexted at page 31) Rs.2185,42,34,910/- ii) Total corrected receipts as per 26AS Rs.2164,47,18,135/- iii) TDS Credit claimed in the return Rs.6,51,02,050/- The total receipts in P & L account being more than the corrected amount in 26AS as above, therefore, the TDS credit is allowable in full. 6. That the CPC issued notice dt.24.11.2023 of defective return u/s 139 (9) of the Act based on the difference in turnover as shown in profit & loss statement and that shown in 26 AS, copy of notice and reply thereto annexed page 42-43, disallowance made in non-consideration of the same. 7. That the Ld. JCIT (A) disallowed the claim in complete non- consideration of the case facts, vide a non-speaking order, simply by placing reliance on following judgements, the ratios of which are not at all relevant to the present case facts.  Chowranghee Sales Bureau Pvt. Ltd. (1973) 87 ITR 542 (SC)  Jamnalla Narashimharao (1993) 200 ITR 588 (SC)  CIT vs T. Naggi Reddy (1993) 202 ITR 253” 4.1. The Ld. AR also referred to the CBDT Circular No.13 of 2021 dated 30th June, 2021, in which in para no.4.3.2, the modalities of deduction of TDS u/s 194Q vis-a-vis the component of the GST has been spelt out. 5 ITA No.2137/Del/2024 According to the ld. AR since the GST was included in the respective bills and as confirmed by the two deductors namely M/s Suzuki Motors Gujarat Pvt. Ltd. and M/s Maruti Suzuki India Ltd. (as per documents placed on page no.27-30 of the paper book), that they had deducted TDS on purchase values inclusive of GST and since total receipts in P & L Account i.e. Rs.21,85,42,34,910/- being more than corrected amount in Form 26AS i.e. Rs.2164,47,18,135/- (as per the details mentioned by the assessee in its written submissions as above) pleaded that the short credit of TDS amounting to Rs.31,33,777/- was not justified and the same should be allowed in full i.e. Rs.6,5102,050/- as against Rs.6,19,68,273/- allowed by the CPC. 5. The ld. DR supported the orders of the authorities below. 6. We have considered the rivals submissions and perused the material available on record. In this regard, para no.4.3.2. of the CBDT Circular No.13 of 2021 dated 30th June, 2021 on the subject ‘Guidelines under section 194Q of the Income Tax Act, 1961’, is reproduced as below:- “4.3.2. Accordingly with respect to TDS under section 194Q of the Act, it is clarified that when tax is deducted at the time of credit of amount in the account of seller and in terms of the agreement or contract between the buyer and the seller. the component of GST comprised in the amount payable to the seller is indicated separately, tax shall be deducted under section 194Q of the Act on the amount credited without including such GST. However, if the tax is deducted on payment basis because the payment is earlier than the credit, the tax would be deducted on the whole amount as it is not possible to identify that payment with GST component of the amount to be invoiced in future.” 6.1. In view of the above para, the deduction of TDS and the extent of allowance of the TDS credit is a subject matter of verification as to under which category the two buyers i.e. Suzuki Motors Gujarat P. Ltd. and Maruti 6 ITA No.2137/Del/2024 Suzuki India Ltd. have made the payment to the assessee respectively, i.e. whether the GST was indicated separately in the respective bills as claimed by the assessee or whether the payment was made to the assessee by the purchaser was earlier than the credit. This has not been done either the CPC or by the Ld. Addl./JCIT(A)-2, Coimbatore, in this case. Further, the claim of the assessee that the two deductors i.e. M/s Suzuki Motors Gujarat Pvt. Ltd. and M/s Maruti Suzuki India Ltd. have deducted TDS on purchase values inclusive of GST also needs verification by the AO. 7. In view of the above facts and discussion, we, therefore, set-aside the order of the Ld. Addl./JCIT(A)-2, Coimbatore and restore the matter to the file of the AO for verification and to allow the TDS credit after due verification as mandated in para no.4.3.2. of the CBDT Circular (supra) and as per law after affording due opportunity of being heard to the assessee. Ground no.1 of the appeals is allowed for statistical purpose. 8. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 18th November, 2024. Sd/- Sd/- [MAHAVIR SINGH] [BRAJESH KUMAR SINGH] VICE PRESIDENT ACCOUNTANT MEMBER Dated 18.11.2024. f{x~{tÜ f{x~{tÜ f{x~{tÜ f{x~{tÜ Copy forwarded to: 1. Assessee 2. Respondent 3. PCIT 7 ITA No.2137/Del/2024 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi, "