The Tax Recovery Officer,TDS,, Ahmedabad v. Sankira Resorts Pvt. Ltd.,, Ahmedabad

ITA 2113/AHD/2004 | 1996-1997
Pronouncement Date: 26-02-2010 | Result: Dismissed

Appeal Details

RSA Number 211320514 RSA 2004
Bench Ahmedabad
Appeal Number ITA 2113/AHD/2004
Duration Of Justice 5 year(s) 8 month(s) 8 day(s)
Appellant The Tax Recovery Officer,TDS,, Ahmedabad
Respondent Sankira Resorts Pvt. Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 26-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 26-02-2010
Date Of Final Hearing 17-02-2010
Next Hearing Date 17-02-2010
Assessment Year 1996-1997
Appeal Filed On 18-06-2004
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND N. S. SAINI AM) ITA NO.2113/AHD/2004 A. Y.: 1996-97 THE TAX RECOVERY OFFICER TDS RANGE AJANTA COMMERCIAL CENTRE A WING ASHRAM ROAD AHMEDABAD VS SANKIRA RESORTS PVT. LTD. 1318 PARABDI NR.MITHAKALI RAILWAY CROSSING ELLISBRIDGE AHMEDABAD PA NO. 31-128-CN-7640 (APPELLANT) (RESPONDENT) APPELLANT BY SHRI GOVIND SINGHAL DR RESPONDENT BY NONE O R D E R PER BHAVNESH SAINI: THIS DEPARTMENTAL APPEAL IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-X AHMEDABAD DATED 31-03-2004 FOR ASSESSMENT YEAR 1996-97 CHALLENGING THE DIRECTION U /S 201 (1) AND 201(1A) OF THE IT ACT. 2. THE GROUNDS OF APPEAL ARE REVISED AND THE ORDER OF THE LEARNED CIT(A) IS CHALLENGED IN REDUCING THE TDS LIABILITY FROM RS.4 39 237/- TO RS.3 00 814/- AS WELL AS DIRECTING WITHDRAWING THE INTEREST U/S 201 (1A) OF RS.4 37 273/-. 3. WE HAVE HEARD THE LEARNED DR AND PERUSED THE FIN DINGS OF THE AUTHORITIES BELOW. NONE APPEARED ON BEHALF OF THE A SSESSEE. ADJOURNMENT IS SOUGHT BY THE LEARNED COUNSEL FOR THE ASSESSEE W HICH IS REJECTED. ITA NO.2113/AHD/2004 SANKIRA RESORTS PVT. LTD. 2 4. BRIEFLY THE FACTS OF THE CASE ARE THAT ACCORDIN G TO THE ASSESSEE TDS LIABILITY WORKED OUT TO RS.3 00 814/- ONLY BUT THE AO NOTED THAT THE ASSESSEE COMPANY DISCLOSED TDS LIABILITY OF RS.4 81 396 ON INTEREST PAID TO INTERNATIONAL HOUSING FINANCE CORPORATION LTD. ( IHFC LTD.) IN THE AUDIT REPORT FILED WITH THE RETURN. THE AO THEREFO RE HELD THAT THE ASSESSEE IS LIABLE FOR TDS OF RS.4 81 396/- U/S 201 OF THE IT ACT. IT WAS EXPLAINED THAT THE ASSESSEE WAS PAYING INTEREST @16 % TO IHFC LTD. UP TO ASSESSMENT YEAR 1995-96 BUT SUBSEQUENTLY IHFC LTD. AGREED TO REDUCE THE INTEREST FROM 16% TO 10% DUE TO AVAILABILITY OF CHEAPER FUNDS. THE STATEMENT OF ACCOUNT RECEIVED FROM IHFC LTD. OUGHT TO HAVE CARRY INTEREST @10% INSTEAD OF 16% BEING CHARGED EARLIER. THE MISTAKE WAS BROUGHT TO THEIR NOTICE AND RECTIFICATION WAS SOUGH T. THIS MISTAKE WAS ACCORDINGLY CORRECTED LATER ON AND CORRECT INTEREST WAS NOTED ACCORDINGLY. IT WAS THEREFORE SUBMITTED THAT IN THE BOOKS OF T HE ASSESSEE COMPANY PROVISION WAS MADE FOR TDS AT RS.4 81 396/- FOR THE ASSESSMENT YEAR UNDER APPEAL WHICH INCLUDES HYPOTHETICAL AMOUNT OF RS.1 80 582/- WHICH CANNOT BE ENFORCED BY IHFC LTD. IT WAS THERE FORE SUBMITTED THAT ASSESSEE IS ONLY LIABLE TO PAY RS.3 00 814/-. THE L EARNED CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE BECAUSE IT WAS BONA FIDE MISTAKE IN MAKING THE PROVISION OF HIGHER AMOUNT BUT TDS HAS T O BE CHARGED ON THE AGREED AMOUNT OF INTEREST. THE AO WAS ACCORDINGLY D IRECTED. THE LEARNED CIT(A) HELD THAT THE ASSESSEE WAS LIABLE TO PAY TDS OF RS.3 00 814/- ONLY FOR THE ASSESSMENT YEAR IN QUESTION. AS REGARDS LEV Y OF INTEREST U/S 201(1A) OF THE IT ACT AMOUNTING TO RS.4 39 396/- IT WAS SUBMITTED THAT THE AO WAS NOT JUSTIFIED IN CHARGING THE INTEREST. IT WAS THEREFORE REQUESTED THAT INTEREST MAY BE WITHDRAWN. IT WAS AL SO SUBMITTED THAT CHARGING OF INTEREST MAY BE RESTRICTED TO THE ACTUA L AMOUNT OF RS.3 00 814/-. THE LEARNED CIT(A) NOTED THAT CHARGI NG OF INTEREST IS MANDATORY ACCORDING TO SECTION 201(1A) OF THE IT AC T AND IN ACCORDANCE WITH THE PROVISIONS OF IT ACT UP TO THE DATE OF ACT UAL PAYMENT. THE AO ITA NO.2113/AHD/2004 SANKIRA RESORTS PVT. LTD. 3 WAS ACCORDINGLY DIRECTED TO CHARGE INTEREST UP TO T HE DATE OF PAYMENT OF TDS OF RS.3 00 814/-. 5. THE LEARNED DR RELIED UPON THE ORDER OF THE AO A ND ALSO RELIED UPON THE ORDER OF ITAT DELHI BENCHES IN THE CASE O F SRIRAM BEVERAGES & DRINKS LTD. 71 TTJ 233 IN WHICH THE COMPANY IS GIVE N TDS CERTIFICATE TO CERTAIN EMPLOYEES SHOWING PARTICULAR AMOUNT DEDUCTE D AT SOURCES WHEREAS PART OF THE SAME HAS NOT GONE TO THE GOVERN MENT ACCOUNT BUT REFUNDED TO THEIR EMPLOYEES. IT WAS HELD THAT THE C OMPANY SHOULD NOT ASSUME THE ROLE OF THE ITO AND GRANT REFUND TO THE EMPLOYEES IN WHOSE CASES THERE WAS EXCESS TDS. THE COMPANY IS LIABLE T O DEPOSIT AS PER TAX DEDUCTED. 6. WE HAVE CONSIDERED THE SUBMISSION OF THE LEARNED DR AND PERUSED THE MATERIAL ON RECORD. THE RECORDS REVEALS THAT IN ASSESSMENT YEAR 1997-98 IN THE CASE OF THE SAME ASSESSEE THE TRIBUN AL DECIDED THE IDENTICAL ISSUE IN ITA NO.2114/AHD/2004 DATED 16-1- 2009 AND DEPARTMENTAL APPEAL ON THE IDENTICAL ISSUE HAS BEEN DISMISSED. COPY OF THE ORDER IS AVAILABLE IN THE FILE. IT THEREFORE APPEARS THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF T HE TRIBUNAL IN THE CASE OF THE SAME ASSESSEE ON IDENTICAL FACTS. WE MAY ALS O NOTE THAT SINCE THE LIABILITY OF THE ASSESSEE WAS TO THE EXTENT OF THE AGREED INTEREST AS AGREED BETWEEN THE PARTIES THEREFORE THE ASSESSEE WOULD BE LIABLE TO THE TDS TO THE AMOUNT OF RS.3 00 814/- ONLY. THE LEARNED CIT(A ) CORRECTLY DIRECTED THE AO TO CHARGE INTEREST ON THE SAME UP TO THE DAT E OF ACTUAL PAYMENT. THE DECISION RELIED UPON BY THE LEARNED DR IS CLEAR LY DISTINGUISHABLE. ACCORDINGLY WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LEARNED CIT(A). WE CONFIRM THE SAME AND DISMISS THE APPEAL OF THE D EPARTMENT. ITA NO.2113/AHD/2004 SANKIRA RESORTS PVT. LTD. 4 7. AS A RESULT THE DEPARTMENTAL APPEAL IS DISMISSE D. ORDER PRONOUNCED ON 26-02-2010 SD/- SD/- (N. S. SAINI) ACOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 26-02-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD