Punjab Recorders Ltd.,, Mohali v. ACIT,, Chandigarh

ITA 751/CHANDI/2009 | 2003-2004
Pronouncement Date: 26-02-2010 | Result: Dismissed

Appeal Details

RSA Number 75121514 RSA 2009
Assessee PAN AACCP1920D
Bench Chandigarh
Appeal Number ITA 751/CHANDI/2009
Duration Of Justice 7 month(s) 16 day(s)
Appellant Punjab Recorders Ltd.,, Mohali
Respondent ACIT,, Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 26-02-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 26-02-2010
Assessment Year 2003-2004
Appeal Filed On 10-07-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI G. S.PANNU ACCOUNTANT MEMBER AND MS.SUSHMA CHOWLA JUDICIAL MEMBER ITA NO.751/CHANDI/2009 ( A.Y. 2003-04 ) PUNJAB RECORDERS LTD. VS. A.C.I.T. B-99 PHASE VII CIRCLE 5(1) MOHALI. CHANDIGARH. PAN: AACCP 1920 D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PANKAJ JAIN RESPONDENT BY : SHRI S.P.KHUTAN O R D E R PER G. S. PANNU AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (A) DATED 20.04.2 009 PERTAINING TO ASSESSMENT YEAR 2003-04 WHEREIN FOLLO WING FOUR GROUNDS OF APPEAL HAVE BEEN PREFERRED :- 1. BECAUSE THE ACTION OF THE CIT(A) IS UNDER CHALLENGE ON FACTS AND LAW FOR UPHOLDING THE ADDITION OF RS.6 94 187/- THE PROVISION FOR INTEREST DEBITED TO PROFIT & LOSS A/C AND IS NOT IN ACCORDANCE WITH LAW. 2. BECAUSE THE ACTION OF THE CIT(A) IS UNDER CHALLENGE ON FACTS AND LAW FOR 2 UPHOLDING THE ADDITION FOR PROVIDENT FUND (RS.7 15 321/-) & ESI (RS.1 37 858/-) BEING THE TOTAL OF RS.8 53 179/- WHICH IS BEING CLAIMED AS A BUSINESS LOSS BUSINESS EXPENDITURE CAPITAL LOSS RELATABLE TO CLOSURE OF THE UNDERTAKING AND IS NOT IN ACCORDANCE WITH LAW. 3. BECAUSE THE ACTION OF THE CIT(A) IS UNDER CHALLENGE ON FACTS AND LAW FOR DECLINING THE CLAIM OF TDS REFUND OF RS.97 460/- WHICH IS NOT IN ACCORDANCE WITH LAW. 4. BECAUSE THE ACTION OF THE CIT(A) IS UNDER CHALLENGE ON FACTS AND LAW REGARDING DISALLOWANCE OF INTEREST AMOUNTING TO RS.10 19 686/- WHEREAS THE SAID AMOUNTS TO MULTIPLE JEOPARDY AND THE FINDINGS ARE CONTRARY TO RECORDS AND EVEN OTHERWISE IN OPPOSITE TO THE MATERIAL ON RECORD. 2. BY WAY OF GROUND NO.1 THE CHALLENGE RAISED BY TH E ASSESSEE IS WITH REGARD TO AN ADDITION OF RS.6 94 1 87/- MADE BY THE ASSESSING OFFICER OUT OF INTEREST EXPENDITUR E CLAIMED BY THE ASSESSEE. THE ASSESSING OFFICER NOTICED TH AT THE ASSESSEE HAD DEBITED INTEREST EXPENDITURE OF RS.11 16 187/- IN ITS PROFIT & LOSS ACCOUNT OUT OF WHICH A SUM OF RS.6 94 187/- WAS NOT ACTUALLY PAID AND THEREFORE THE SAME WAS NOT ALLOWABLE IN TERMS OF SECTION 43B OF T HE INCOME- TAX ACT 1961 (IN SHORT THE ACT). THE COMMISSIO NER OF INCOME-TAX (A) HAS ALSO SUSTAINED THE DISALLOWANCE AS PER 3 PROVISIONS OF SECTION 43B OF THE ACT IN THE ABSENC E OF ACTUAL PAYMENT BY THE ASSESSEE. 3. BEFORE US ALSO THERE IS NO CHANGE IN THE FACT P OSITION IN AS MUCH AS THE LEARNED COUNSEL FOR THE ASSESSEE DOE S NOT DISPUTE THAT THE PROVISIONS OF SECTION 43B OF THE A CT ARE ATTRACTED. THE ONLY PLEA RAISED BY THE ASSESSEE IS THAT THE ASSESSING OFFICER BE DIRECTED TO ALLOW THE CLAIM OF THE ASSESSEE IN THE YEAR OF ACTUAL PAYMENT. ON THIS PO INT THE LEARNED D.R. HAS NOT SERIOUSLY DISPUTED THE PRAYER OF THE APPELLANT. 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS WE FIND THAT IN THIS CASE INVOKING OF SECTION 43B OF THE ACT BY TH E LOWER AUTHORITIES IS FAIR AND PROPER AND AS THERE IS NO M ATERIAL TO CONTEND TO THE CONTRARY. SECTION 43B OF THE ACT P ERMITS DEDUCTION OF PRESCRIBED EXPENDITURES ONLY ON ACTUA L PAYMENT IRRESPECTIVE OF THE PREVIOUS YEAR IN WHICH THE LIAB ILITY TO PAY THE SAME WAS INCURRED BY THE ASSESSEE ACCORDING TO THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY HIM. TH E PLEA OF THE ASSESSEE TO ALLOW DEDUCTION IN THE YEAR OF ACTU AL PAYMENT IN OUR VIEW REQUIRES TO BE CONSIDERED IN ACCORDANC E WITH LAW BY THE ASSESSING OFFICER AS AND WHEN SUCH CLAIM IS MADE BY THE ASSESSEE BEFORE HIM. ACCORDINGLY GROUND NO.1 RAISED BY THE ASSESSEE IS DISMISSED. 5. IN GROUND NO.2 ISSUE RELATES TO UNPAID PROVIDEN T FUND AND ESI DUES AMOUNTING TO RS.7 15 321/- AND RS.1 37 858/- 4 RESPECTIVELY WHICH HAVE BEEN DISALLOWED IN TERMS OF PROVISIONS OF SECTION 43B OF THE ACT. HEREIN ALSO WE FIND NO REASON TO INTERFERE WITH THE DISALLOWANCE MADE BY T HE LOWER AUTHORITIES WHICH IS IN LINE WITH THE PROVISIONS O F SECTION 43B OF THE ACT HAVING REGARD TO THE FACTS AND CIRCUMST ANCES OF THE CASE. ACCORDINGLY GROUND NO.2 RAISED BY THE ASSES SEE IS DISMISSED. 6. GROUND NO.3 RAISED BY THE ASSESSEE RELATES TO TH E CREDIT OF TAX DEDUCTED AT SOURCE ON RENTAL INCOME. THE AS SESSING OFFICER NOTED THAT AS PER FORM NO.16A ASSESSEE REC EIVED RENT INCOME OF RS.7 51 000/- ON WHICH TAX OF RS.1 65 248 /- WAS DEDUCTED AT SOURCE. IN THE COMPUTATION OF INCOME F OR THE YEAR UNDER CONSIDERATION ASSESSEE HAD SHOWN RENTAL INCO ME OF RS.3 08 100/- WHILE CREDIT FOR THE ENTIRE TDS OF RS .1 65 248/- WAS CLAIMED. ON BEING ASKED TO EXPLAIN THE REASON FOR THE SAME ASSESSEE SUBMITTED THAT THE BALANCE RENTAL IN COME OF RS.4 43 000/- PERTAINED TO THE PRECEDING YEAR AND T HE SAME WAS SHOWN IN THE RESPECTIVE RETURN OF INCOME. HOWE VER THE CREDIT FOR ENTIRE TDS OF RS.1 65 248/- WAS CLAIMED DURING THE YEAR UNDER CONSIDERATION SINCE RELEVANT TDS CERTIFI CATE WAS ISSUED DURING THE YEAR UNDER CONSIDERATION. THE AS SESSING OFFICER HOWEVER DENIED THE CLAIM OF THE ASSESSEE. AS PER THE ASSESSING OFFICER THE ASSESSEE CAN CLAIM CREDIT FO R TDS ONLY IN RESPECT OF INCOME CLAIMED IN THE RETURN OF INCOM E. SINCE THE ASSESSEE HAD NOT SHOWN INCOME OF RS.4 43 000/- IN THE RETURN OF INCOME CREDIT FOR PROPORTIONATE TDS OF R S.97 460/- 5 WAS NOT ALLOWED TO THE ASSESSEE. THE ASSESSING OFF ICER REFERRED TO THE PROVISIONS OF SECTION 199 OF THE AC T IN THIS REGARD. THE COMMISSIONER OF INCOME-TAX (A) HAS ALS O UPHELD THE CONCLUSION OF THE ASSESSING OFFICER BY RELYING ON THE PROVISIONS OF SECTION 199 OF THE ACT. 7. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE LOWER AUTHORITIES WERE NOT JUSTI FIED IN DENYING THE CREDIT FOR THE TAX DEDUCTED AT SOURCE O F RS.97 460/- IN THE FACTS AND CIRCUMSTANCES OF THE C ASE. IT IS SUBMITTED THAT THE CREDIT HAS BEEN CLAIMED BY THE A SSESSEE ON THE BASIS OF FORM NO.16A WHICH WAS ISSUED BY THE P AYER OF INCOME DURING THE YEAR UNDER CONSIDERATION. IT WAS ALSO POINTED OUT THAT THE ENTIRE INCOME HAS BEEN OFFERED FOR TAX IN THE PERIOD TO WHICH IT PERTAINED PARTLY IN THE YEA R UNDER CONSIDERATION AND PARTLY IN THE EARLIER YEAR. THE LEARNED COUNSEL ALSO POINTED OUT THAT THE CREDIT FOR THE IM PUGNED TDS HAS NOT BEEN ALLOWED DURING THE YEAR OR IN THE PREC EDING YEAR WHEN THE BALANCE OF THE INCOME HAS BEEN DECLARED. THEREFORE IN SUCH SITUATION THE CREDIT FOR THE TAX HAS BEEN ALTOGETHER DENIED TO THE ASSESSEE WHICH IS UNJUST. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE DELHI BENCH OF THE TR IBUNAL IN THE CASE OF ASHOKA HOLDINGS LTD. VS. ITO 6 ITD 83( DELHI) TO CONTEND THAT THE CREDIT FOR THE TAX DEDUCTED AT SOU RCE IS NOT LINKED TO THE INCOME THAT IS RETURNED BUT IS BASED ON THE PRODUCTION OF NECESSARY TDS CERTIFICATE WHICH IN THE PRESENT CASE HAS BEEN FILED BEFORE THE ASSESSING OFFICER BY WAY OF 6 FORM NO.16A ISSUED BY THE TENANT DURING THE YEAR UN DER CONSIDERATION. 8. ON THE OTHER HAND THE LEARNED D.R. HAS RELIED U PON THE PROVISIONS OF SECTION 199 OF THE ACT IN SUPPORT OF THE CASE OF THE REVENUE. AS PER THE LEARNED D.R. IN TERMS OF SECTION 199 OF THE ACT THE ASSESSEE CAN BE ALLOWED CREDIT FOR TAX DEDUCTED AT SOURCE ONLY IN RESPECT OF INCOME SHOWN IN THE RE TURN OF INCOME. HENCE THE PARTIAL DENIAL OF CREDIT IS SOU GHT TO BE JUSTIFIED. 9. WE HAVE EXAMINED THE RIVAL STANDS CAREFULLY. TH E CREDIT FOR THE TAX DEDUCTED AT SOURCE OF RS.97 460/- HAS B EEN DENIED FOR THE REASON THAT THE CORRESPONDING INCOME HAS NO T BEEN DECLARED IN THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION AND THE SAID INCOME HAS BEEN SHOWN IN THE RETURN OF INCOME OF THE PRECEDING YEAR. THE ASSESS ING OFFICER HAS RELIED UPON SECTION 199 OF THE ACT TO DENY THE CLAIM BY OBSERVING THAT SAID SECTION PERMITS CREDIT OF TDS O NLY IN RESPECT OF INCOME SHOWN IN THE RETURN OF INCOME. I N THIS CONNECTION WE REPRODUCE SECTION 199 OF THE ACT AS IT STOOD FOR THE RELEVANT YEAR WHICH IS AS UNDER :- 199 ANY DEDUCTION MADE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 192 TO 194 SECTION 194A ( SECTION 194B( ( SECTION 194BB) ( SECTION 194C) ( SECTION 194D) ( SECTION 194E) ( SECTION 194EE SECTION 194F SECTION 194G SECTION 194H (SECTION 194-I ) (SECTION 194J SECTION 194K ) SECTION 195 SECTION 196A ( SECTION 196B) ( SECTION 196C AND SECTION 196D)))) AND PAID TO THE CENTRAL GOVERNMENT SHALL BE TREATED AS PAYMENT OF (TAX) ON BEHALF OF THE PERSON FROM WHOSE 7 INCOME THE DEDUCTION WAS MADE OR OF THE OWNER OF THE SECURITY OR DEPOSITOR OR OWNER OF PROPERTY OR OF UNIT-HOLDER OR OF THE SHAREHOLDER AS THE CASE MAY AND CREDIT SHALL BE GIVEN TO HIM FOR THE AMOUNT SO DEDUCTION ON THE PRODUCTION OF THE CERTIFICATE FURNISHED UNDER SECTION 203 IN THE ASSESSMENT MADE UNDER THIS ACT FOR THE ASSESSMENT YEAR FOR WHICH SUCH INCOME IS ASSESSABLE. 10. A PERUSAL OF AFORESAID SHOWS THAT AS PER SUB-S ECTION (1) OF SECTION 199 TAX DEDUCTED AT SOURCE IS TREATED A S PAYMENT OF TAX ON BEHALF OF THE PERSON FROM WHOSE INCOME TH E DEDUCTION IS MADE. NOTABLY IT PROVIDES THAT THE C REDIT SHALL BE GIVEN FOR THE AMOUNT SO DEDUCTED ON THE PRODUCTI ON OF CERTIFICATE FURNISHED U/S 203 IN THE ASSESSMENT MAD E UNDER THIS ACT FOR THE ASSESSMENT YEAR FOR WHICH SUCH INC OME IS ASSESSABLE. IN THE CASE OF BEFORE US THE ASSESSEE PRODUCED THE CERTIFICATE ISSUED U/S 203 OF THE ACT I.E. FORM NO.16-A IN THE COURSE OF THE ASSESSMENT MADE FOR THE INSTANT A SSESSMENT YEAR. SO HOWEVER THE SECOND LIMB OF THE CONDITION NAMELY THAT THE CREDIT IS TO BE GIVEN IN THE ASSESSMENT YE AR FOR WHICH SUCH INCOME IS ASSESSABLE WAS NOT FULFILLED IN RELA TION TO THE IMPUGNED AMOUNT OF RS.97 460/- BECAUSE THE INCOME CORRESPONDING TO THE SAID AMOUNT OF TDS IS ASSESSAB LE IN THE PRECEDING ASSESSMENT YEAR AND NOT IN THE INSTANT AS SESSMENT YEAR. THEREFORE IN TERMS OF SECTION 199 OF THE AC T THE CREDIT FOR THE TAX DEDUCTED AT SOURCE OF RS.97 460/- COULD NOT BE ALLOWED TO THE ASSESSEE IN THE INSTANT YEAR. HOWEV ER THERE IS NO DENIAL TO THE PLEA SET-UP BY THE ASSESSEE THAT C OMPLETE INCOME HAS BEEN DECLARED IN THE RESPECTIVE RETURNS OF INCOME 8 AND THEREFORE THE ASSESSEE DESERVES TO BE ALLOWED THE CREDIT FOR THE IMPUGNED TAX DEDUCTED AT SOURCE EITHER IN THE YEAR UNDER CONSIDERATION OR IN THE PRECEDING YEAR. IN CONCLUSION WE HOLD THAT THOUGH THERE IS AMPLE JUSTIFICATION FO R THE ASSESSING OFFICER TO DENY THE CLAIM OF CREDIT FOR T HE TAX DEDUCTED AT SOURCE AMOUNTING TO RS.97 460/- IN THE IMPUGNED ASSESSMENT BUT AT THE SAME TIME IT WOULD BE IN TH E FITNESS OF THINGS THAT THE CLAIM OF THE ASSESSEE FOR THE CREDI T IS CONSIDERED BY THE ASSESSING OFFICER IN THE RELEVANT ASSESSMENT YEAR. SUBJECT TO THE AFORESAID OBSERVA TION THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. 11. GROUND NO.4 RAISED BY THE ASSESSEE IS WITH REGA RD TO AN ADDITION OF RS.10 19 686/- MADE BY THE ASSESSING OF FICER ON THE GROUND THAT THE SAID EXPENDITURE DOES NOT PERTA IN TO THE YEAR UNDER CONSIDERATION. BRIEFLY STATED THE FACT S ARE THAT THE SAID SUM REPRESENTED INTEREST ON ARREARS OF REN T BOOKED AS INCOME IN THE PRECEDING YEAR BUT NOW REVERSED BY TH E ASSESSEE DURING THE YEAR UNDER CONSIDERATION. ON BEING ASKE D TO JUSTIFY THE EXPENDITURE CLAIMED IN THIS YEAR THE A SSESSEE SUBMITTED THAT AS PER THE AGREEMENT WITH THE TENANT RS.10 19 686/- ON ACCOUNT OF INTEREST ON ARREARS OF RENT WHICH WAS SHOWN AS INCOME IN EARLIER YEARS WAS NOT RECOVERABLE. ACCORDINGLY AS PER THE SETTLEMENT WI TH M/S MIT (I.E. THE TENANT) THE SAID INTEREST WAS REVERSED D URING THE YEAR UNDER CONSIDERATION AND TREATED AS EXPENDITURE . THE ASSESSING OFFICER DISALLOWED THE CLAIM ON THE GROUN D THAT NO 9 DOCUMENTARY EVIDENCE HAS BEEN FURNISHED IN SUPPORT OF THE CLAIM. EVEN BEFORE THE COMMISSIONER OF INCOME-TAX (A) THE ASSESSEE CANVASSED THAT AS PER THE SETTLEMENT MADE DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION THE INTEREST INCOME IN QUESTION WAS AGREED TO BE WAIVED. THE COMMISSIONER OF INCOME-TAX (A) ALSO NOTED THAT IN THE ABSENCE OF ANY EVIDENCE BROUGHT ON RECO RD BY THE ASSESSEE THE DISALLOWANCE MADE BY THE ASSESSING OF FICER COULD NOT BE SET ASIDE. THE ADDITION WAS THUS SUST AINED. 12. BEFORE US THE POSITION WITH REGARD TO THE EVID ENCE CONTINUES. THERE IS NO EVIDENCE BROUGHT ON RECORD BY THE ASSESSEE TO ESTABLISH THAT THE INCOME ON ACCOUNT OF INTEREST ON ARREARS OF RENT CREDITED IN THE EARLIER YEARS HA S BEEN WAIVED. AS A RESULT IN THE ABSENCE OF NECESSARY E VIDENCE IT CANNOT BE DEDUCED THAT THE SAID LIABILITY HAS CRYST ALLIZED OR ARISEN DURING THE PREVIOUS YEAR RELEVANT TO THE ASS ESSMENT YEAR UNDER CONSIDERATION. THUS ON FACTS WE FIND NO REASON TO INTERFERE WITH THE CONCLUSION DRAWN BY THE LOWER AUTHORITIES. THE DISALLOWANCE IS ACCORDINGLY SUSTA INED AND THE ASSESSEE FAILS ON THIS GROUND OF APPEAL. 13. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.02.2010. (SUSHMA CHOWLA) (G.S.PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED 26 TH FEBRUARY 2010 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE D R. 10