Smt. Shiromi Banerjee, Bangalore v. ITO, Bangalore

ITA 1314/BANG/2010 | 2008-2009
Pronouncement Date: 26-09-2011 | Result: Allowed

Appeal Details

RSA Number 131421114 RSA 2010
Assessee PAN AKKPB8532G
Bench Bangalore
Appeal Number ITA 1314/BANG/2010
Duration Of Justice 10 month(s) 1 day(s)
Appellant Smt. Shiromi Banerjee, Bangalore
Respondent ITO, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 26-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 26-09-2011
Date Of Final Hearing 14-09-2011
Next Hearing Date 14-09-2011
Assessment Year 2008-2009
Appeal Filed On 25-11-2010
Judgment Text
ITA.1314/BANG/2010 PAG E - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'B' BANGALORE BEFORE SHRI. N. BARATHVAJA SANKAR VICE PRESIDENT AND SHRI. GEORGE GEORGE K. JUDICIAL MEMBER I.T.A NO.1314/BANG/2010 (ASSESSMENT YEAR : 2008-09) SMT. SHIROMI BANERJEE NO.624 RANKA COURT NO.18 CAMBRIGE ROAD ULSOOR BANGALORE 560 009 .. APPELLANT PAN : AKKPB8532G V. INCOME-TAX OFFICER INTERNATIONAL TAXATION WARD -2(1) BANGALORE .. RE SPONDENT DATE OF HEARING : 14.09.2011 DATE OF PRONOUNCEMENT : 26.09.2011 APPLICANT BY : SHRI. DEVRAJ CA RESPONDENT BY : SHRI. ETWA MUNDA COMMISSIONER OF INCOME-TAX-III O R D E R PER GEORGE GEORGE K JUDICIAL MEMBER : THIS APPEAL INSTITUTED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) DATED.15.09.2010. THE RELEVAN T ASSESSMENT YEAR IS 2008-09. THE ASSESSEE IN THIS APPEAL HAS RAISED FIVE GROUNDS. IN THE COURSE OF ARGUMENT IT WAS SUBMITTED BY THE AUTHORI ZED REPRESENTATIVE THAT GROUND NOS.1 TO 4 ARE NOT PRESSED. HENCE THE SE GROUNDS ARE DISMISSED. THE FIFTH GROUND READS AS FOLLOWS : ITA.1314/BANG/2010 PAG E - 2 'THE LAO ERRED IN LEVYING INTEREST U/S.201(1A) AND LAA ERRED IN CONFIRMING THIS ACTION OF THE LAO.' 2. BRIEFLY STATED THE FACTS OF THE CASE ARE AS FOLL OWS. THE ASSESSEE IS AN INDIVIDUAL. SHE PURCHASED A RESIDENTIAL APAR TMENT ON 03.08.2007 FROM SHRI. SYED ASLAM HASHMI A NON-RESIDENT. THE ITO (INTERNATIONAL TAXATION) WARD -2(1) ISSUED NOTICE TO THE ASSESSEE DRAWING ATTENTION TO THE PROVISIONS OF SECT5ION 195 OF THE ACT AND TO SHOW CAUSE WHY SHE HAD NOT DEDUCTED TAX AT SOURCE I N RESPECT OF THE PAYMENT MADE TO THE SELLER OF THE ABOVE SAID PROPER TY. THE ASSESSEE SUBMITTED SHE WAS NOT AWARE OF THE FACT THAT THE SE LLER WAS A NON- RESIDENT AND THERE WAS NO INDICATION IN THE DOCUMEN T TO THE TRANSACTION THAT THE SELLER WAS A NON-RESIDENT. IT WAS FURTHER SUBMITTED THAT THE SELLER OF THE PROPERTY HAD ALREADY DECLARED THE SAL E OF THE PROPERTY IN HIS RETURN OF INCOME AND CONSEQUENT TO THE SAME SH E IS NOT LIABLE TO RECOVERY OF TDS. THE ITO VIDE HIS ORDER DATED.08.0 2.2010 ABSOLVED THE ASSESSEE FROM HER LIABILITY U/S.201(1) SINCE TH E NON-RESIDENT SELLER HAD FILED HIS RETURN OF INCOME DISCLOSING CAPITAL G AINS ON THE SALE OF THE PROPERTY. THE ITO HOWEVER QUANTIFIED THE LIABI LITY U/S.201(1A) OF THE ACT FOR THE PERIOD FROM JULY 2007 TO JANUARY 2010. THE INTEREST LEVIED U/S.201(1A) AMOUNTED TO ` .2 52 886/-. ITA.1314/BANG/2010 PAG E - 3 3. AGAINST THE LEVY OF INTEREST U/S.201(1A) OF THE ACT THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY. THE SUBMISSIONS MADE BEFORE THE ITO WERE REITERATED BEF ORE THE FIRST APPELLATE AUTHORITY. THE CONTENTIONS RAISED WERE D ISMISSED AND THE COMMISSIONER OF INCOME-TAX(A) CONFIRMED THE VIEW TA KEN BY THE ITO. HOWEVER THE COMMISSIONER OF INCOME-TAX(A) MO DIFIED TO A CERTAIN EXTENT THE QUANTUM OF INTEREST THAT WAS LEV IED U/S.201(1A). THE INTEREST COMPUTATION WAS LIMITED FOR A PERIOD O F THIRTEEN MONTHS FROM JULY 2007 TO JULY 2008 ON A SUM OF `. 8 15 760/- SINCE THE TAX WAS PAID BY THE SELLER SHRI. SYED ASLAM HASHMI BY FILING HIS RETURN OF INCOME DISCLOSING THE SALE OF THE PROPERTY. THE AS SESSEE BEING AGGRIEVED BY LEVY OF INTEREST U/S.201(1A) FOR A PER IOD OF THIRTEEN MONTHS FROM JULY 2007 TO JULY 2008 IS UNDER APPEAL BEFORE US. 04. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE A SSESSEE SUBMITTED THAT THE SELLER OF THE PROPERTY NAMELY SHRI. SYED ASLAM HASHMI HAD FILED HIS RETURN OF INCOME WITHIN THE DUE DATE SPEC IFIED AND HAS DISCLOSED THE LONG-TERM CAPITAL GAINS AND HAD CLAIM ED EXEMPTIONS FROM THE SAME U/S.54 OF THE ACT. A COPY OF THE RET URN FILED BY THE SELLER OF THE PROPERTY (NON-RESIDENT) IS PRODUCED B EFORE US FOR PERUSAL. IT WAS CONTENDED THAT WHEN NO TAX WAS PAYABLE WITH RESPECT TO THE SALE OF PROPERTY BY THE PAYEE THERE IS NO QUESTION OF L EVY OF INTEREST ITA.1314/BANG/2010 PAG E - 4 U/S.201(1A). IT WAS FURTHER CONTENDED THAT THOUGH THE INTEREST WAS MANDATORY LEVY IS ONLY COMPENSATORY AND THAT WHEN TAX ITSELF WAS NOT PAYABLE QUESTION OF COMPENSATION DOES NOT ARISE AN D IT WILL BE UNDUE ADVANTAGE BY GETTING INTEREST ON AN AMOUNT OF TAX W HICH IS NOT PAYABLE. FOR THE ABOVE PROPOSITION THE LEARNED RE PRESENTATIVE FOR THE ASSESSEE RELIED ON TWO ORDERS OF THE TRIBUNAL IN UL TRA ENTERTAINMENT SOLUTIONS LTD V. ITO (2007) 17 SOT 249 (MUM) AND IT O V. EMRALD CONSTRUCTION CO (P) LTD. (116 TTJ 904) (JODH). 05. THE LEARNED DR ON THE OTHER HAND SUPPORTED THE ORDERS OF THE INCOME-TAX AUTHORITIES. 06. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. IN THE INSTANT CASE THE ASSESSEE HAS BEEN ABSOLVED OF HER LIABILITY U/S.201(1) IN VIEW OF THE FACT THAT THE N ON-RESIDENT SELLER OF THE PROPERTY HAD FILED HIS RETURN OF INCOME DISCLOS ING LONG-TERM CAPITAL GAINS. THE COPY OF THE RETURN OF INCOME FILED BY T HE SELLER OF THE PROPERTY IS PRODUCED BEFORE US WHEREIN WE FIND HE HAD DISCLOSED LONG-TERM CAPITAL GAINS BUT HAD CLAIMED EXEMPTION FROM PAYMENT OF TAX BY VIRTUE OF PROVISIONS OF SECTION 54 OF THE AC T. IT IS NOT CLEAR WHETHER THE ASSESSMENT IN THE CASE OF SELLER HAS AT TAINED FINALITY AND WHETHER ANY TAX IS DEMANDED FROM THE SELLER. THE I NTEREST THAT IS ITA.1314/BANG/2010 PAG E - 5 LEVIED U/S.201(1A) THOUGH MANDATORY IS COMPENSATORY IN NATURE. WHEN NO TAX IS PAYABLE BY THE PAYEE THE ISSUE OF L EVY OF INTEREST IS IN DOUBT. THE ORDERS OF THE TRIBUNAL CITED SUPRA SUPP ORT THE STAND OF THE ASSESSEE ON THIS POINT. HOWEVER THESE DECISIONS W ERE NOT PUT TO THE CONCERNED COMMISSIONER OF INCOME-TAX(A) IN THE COUR SE OF ARGUMENT BEFORE HIM. AS STATED ABOVE THERE IS NO CLARITY W ITH REGARD TO THE FINALITY OF THE ASSESSMENT THAT IS MADE IN THE CASE OF THE SELLER. THEREFORE WE ARE OF THE VIEW THAT THE MATTER NEEDS TO BE RESTORED TO THE FILES OF THE ASSESSING OFFICER FOR EXAMINATION OF THE ISSUE WHETHER THERE IS ANY ACTUAL ASCERTAINMENT OF TAX LIABILITY IN THE CASE OF THE SELLER THE NON-RESIDENT. THE ASSESSING OFFICER SH ALL FOLLOW THE RATIO OF THE ORDER OF THE TRIBUNAL CITED SUPRA AND CONCLU DE ACCORDINGLY WHETHER THE INTEREST LIABILITY U/S.201(1A) OF THE A CT IS NECESSARY ON FACTS OF THE INSTANT CASE. THEREFORE THE APPEAL F ILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 07. ORDER PRONOUNCED ON 26TH DAY OF SEPTEMBER 2011 AT BANGALORE. SD/- SD/- (N. BARATHVAJA SANKAR) (GEORGE GEORGE K) VICE PRESIDENT JUDICIAL MEMBER ITA.1314/BANG/2010 PAG E - 6