DCIT, Circle - 1, Kolkata, Kolkata v. M/s. Indian Roadways Corporation, Kolkata

ITA 54/KOL/2011 | 2004-2005
Pronouncement Date: 13-07-2011 | Result: Dismissed

Appeal Details

RSA Number 5423514 RSA 2011
Assessee PAN AAACI7333K
Bench Kolkata
Appeal Number ITA 54/KOL/2011
Duration Of Justice 6 month(s) 1 day(s)
Appellant DCIT, Circle - 1, Kolkata, Kolkata
Respondent M/s. Indian Roadways Corporation, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 13-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 13-07-2011
Assessment Year 2004-2005
Appeal Filed On 11-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE /AND . . !' ) [BEFORE HONBLE SRI MAHAVIR SINGH JM & HONBLE SHR I C. D. RAO AM] # # # # / I.T.A NO. 54KOL/2011 $% &' $% &' $% &' $% &'/ // / ASSESSMENT YEAR: 2004-05 DEPUTY COMMISSIONER OF INCOME-TAX VS. M/S. INDIA N ROADWAYS CORPORATION LTD. CIRCLE-1 KOLKATA. (PAN AAACI 7333 K) ()* /APPELLANT ) (+ )*/ RESPONDENT ) FOR THE APPELLANT: SHRI R. K. SAHA FOR THE RESPONDENT: SHRI RAVI TULSIYAN !- / ORDER PER MAHAVIR SINGH JM ( ) THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-1 KOLKATA IN APPEAL NO.540/CIT(A)-1/CIR-1/09-10 VIDE DATED 20.09.2010. ASSESSMENT WAS FRAMED BY DCIT CIRCLE-1 KOLKATA U/S. 143(3)/147 OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2004-05 VIDE HIS ORDER DA TED 31.12.2009. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) IN DELETING ADDITION MADE BY ASSESSING OFFICER ON ACCOUNT OF IN COME WHICH WAS NOT DECLARED IN THE RETURN CORRESPONDING TO THE CREDIT OF TDS. FOR THIS REVEN UE HAS RAISED THE FOLLOWING GROUND: 1) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.74 74 582/- WI THOUT APPRECIATING THE FACT THAT THE INCOME WAS NOT DECLARED IN THE RETURN WHEREAS C REDIT OF CORRESPONDING TDS WAS CLAIMED IN THE RETURN. 3. BRIEF FACTS ARE THAT ORIGINAL ASSESSMENT WAS CO MPLETED U/S. 143(3) ON 28.9.2006 WHEREBY TDS CREDIT WAS ALLOWED TO ASSESSEE AT RS.26 10 322/-. THE ASSESSING OFFICER SUBSEQUENTLY NOTED FROM TDS CERTIFICATE THAT TDS AM OUNTING TO RS.32 86 213/- WAS DEDUCTED BY VARIOUS PARTIES FROM WHOM TOTAL PAYMENT OF RS.79 93 90 129/- WAS MADE WHEREAS THE ASSESSEE HAS DECLARED RECEIPT TO THE EXTENT OF RS.7 9 14 48 109/- AS FREIGHT AND RS.3 90 492/- AS INTEREST TOTALING TO RS.79 18 38 601/-. ACCORDINGL Y ASSESSING OFFICER COMPUTED THAT INCOME AMOUNTING TO RS.74 74 528/- AS ESCAPED INCOME AND H ENCE HE REOPENED THE ASSESSMENT BY 2 ITA 54/K/2011 INDIAN ROADWAYS CORPN. LTD. A.Y.04- 05 ISSUING NOTICE U/S. 148 R.W.S. 147 OF THE ACT. ASS ESSEE EXPLAINED THAT ENTIRE INCOME HAS BEEN OFFERED TO TAX IN EARLIER YEAR PERTAINING TO TDS DE DUCTED THEREFORE THERE IS NO ESCAPEMENT OF INCOME BUT ASSESSING OFFICER DID NOT ACCEPT THE EXP LANATION AND ADDED THIS AMOUNT OF RS.74 74 528/- AS UNDISCLOSED INCOME OF THE ASSESS EE. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE CIT(A) WHO AFTER TAKING REMAND REPORT FROM ASSESSING OFFICER DELETED ADDITION BY GIVING FOLLOWING FINDING: I HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPORT FILED BY THE A.O. I HAVE ALSO GONE THROUGH THE RECONCILIATI ON STATEMENTS FILED BY THE APPELLANT IN THE DUE COURSE OF APPEAL. THE A.R. AL SO PRODUCED THE LEDGER ACCOUNTS OF THE ASSESSEES PARTIES IN ITS BOOKS OF ACCOUNTS AS DIRECTED BY ME FOR THE F.Y. 2002-03 AND F.Y. 2003-04 WHICH WERE EXAMINED WITH R EFERENCE TO THE RECONCILIATION STATEMENTS FILED BY THE ASSESSEE TO EXAMINE THE CORRECTNESS OF THE DATA COMPILED BY THE ASSESSEE IN ITS RECONCILIATION STATEMENT. THE RECONCILIATION STATEMENT SUBMITTED BY THE ASSESSEE APPEARED TO BE IN ORDER AND WAS ACCEPTED AS CORRECT. AFTER EXAMINING THE RECONCILIATION STATEME NTS FILED BY THE ASSESSEE AND MORE PARTICULARLY THE PARTY-WISE RECONCILIATION FIL ED IT WAS FOUND THAT THE SUBMISSION MADE BY THE ASSESSEE IS CORRECT. IT WAS FOUND THAT THE TDS CERTIFICATES CONSIDERED TO BE EXCESSIVE BY THE A.O. WERE IN RELA TION TO INCOME WHICH HAD ALREADY BEEN OFFERED TO TAX BY THE APPELLANT IN THE AY. 2003-04. THE TDS WERE CLAIMED BY THE ASSESSEE ONLY IN THE SUBSEQUENT YEAR SINCE THE PAYERS HAD ISSUED THEM IN THE SUBSEQUENT YEAR AT THE TIME OF MAKING P AYMENT TO THE ASSESSEE. NO PART OF THE INCOME AS APPEARING IN THE TDS CERTIFICATES HAD ESCAPED ASSESSMENT SINCE THEY HAD ALREADY BEEN TAXED ON ACCRUAL BASIS IN THE AY. 2003-04. THE ASSESSEE FOLLOWS MERCANTILE SYSTEM OF ACCOUNTING AS PER WHIC H IT IS REQUIRED TO OFFER ITS INCOME IN THE YEAR OF ACCRUAL I.E. THE YEAR IN WHIC H THE TRANSPORTATION BILLS ARE RAISED BY THE ASSESSEE. SINCE THE ASSESSEE FOLLOWS MERCANTILE SYSTEM OF ACCOUNTING IT HAS RIGHTLY OFFERED THE INCOME OF RS .74 74 582/- IN THAT YEAR AND NOT THE A.Y. 2004-05 AS HAS BEEN SOUGHT TO BE DONE BY T HE A.Q. IF THE A.O.S ACTION BE TREATED AS CORRECT THEN HE WOULD HAVE CHANGED THE S YSTEM OF ACCOUNTING REGULARLY AND CORRECTLY FOLLOWED BY THE ASSESSEE WITHOUT ANY BASIS. IN FACT EVEN IF HE WAS TO ADD THIS INCOME IN THE A.Y. 2004-05 THEN HE WOULD H AVE TO CORRESPONDINGLY REDUCE THE INCOME FROM THE A.Y. 2003-04 IN ORDER TO AVOID DOUBLE TAXATION OF THE SAME INCOME. AS FOR SECTION 199 I FIND THE CONTENTION O F THE ASSESSEE TO BE CORRECT. SECTION 199 DEALS WITH THE YEAR IN WHICH THE CREDIT FOR TDS IS TO BE GIVEN AND DOES NOT DEAL WITH THE YEAR IN WHICH INCOME IS TO BE TAX ED ON THE BASIS OF CLAIM OF CREDIT OF TDS BY THE ASSESSEE. THESE ARE TWO COMPLETELY DI FFERENT ISSUES AND ONE CANNOT LEAD TO THE OTHER. THEREFORE SECTION 199 CANNOT CO ME TO THE RESCUE OF THE A.O. IN MAKING THE ADDITION OF INCOME IN THE AY. 2004-05. I N VIEW OF THIS I HOLD THAT THE ADDITION MADE BY THE AO. IS NOT CORRECT IN THE FACT S OF THE CASE AND NOT AS PER LAW. THE A.O. IS DIRECTED TO DELETE THE ADDITION OF RS.7 4 74 582/- MADE BY HIM. AGGRIEVED NOW REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT FACTUALLY THE ASSESSEE HAS DISCLOSED I NCOME IN FY 2002-03 AND 2003-04 RELEVANT TO AYS 2003-04 AND 2004-05 AND SUBMITTED COMPLETE R ECONCILIATION STATEMENT BEFORE AO AS 3 ITA 54/K/2011 INDIAN ROADWAYS CORPN. LTD. A.Y.04- 05 WELL AS BEFORE CIT(A). WE FIND THAT CIT(A) AFTER G OING THROUGH RECONCILIATION STATEMENT AND CONSIDERING THE PROVISIONS OF SECTION 199 OF THE AC T DELETED THE ADDITION. WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) AND THE SAME IS CONFORMED. A PPEAL OF THE REVENUE IS DISMISSED. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. 6. ORDER PRONOUNCED IN OPEN COURT. SD/- SD/- . . !' (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( ' ' ' ') )) ) DATED 13TH JULY 2011 ./ $01 2 JD.(SR.P.S.) !- 3 +4 5!4&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT DCIT CIRCLE-1 KOLKATA. 2 + )* / RESPONDENT M/S. INDIAN ROADWAYS CORPORATION LTD. 1 SUNYAT SEN STREET KOLKATA-12. 3 . -$ ( )/ THE CIT(A) KOLKATA 4. -$ / CIT KOLKATA 5 . => +$ / DR KOLKATA BENCHES KOLKATA 4 +/ TRUE COPY !-$?/ BY ORDER 1 /ASSTT. REGISTRAR .