D.C.I.T., CENTRAL CIRCLE - 1(2), KOLKATA, KOLKATA vs. M/S, EMC LTD. (ON CIRP), KOLKATA

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ITSSA 1/KOL/2023Status: DisposedITAT Kolkata22 November 2023AY 2016-20173 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the issue was squarely covered in favour of the assessee by the decision of a co-ordinate bench in the assessee's own case for AY 2014-15 (ITA No. 2149/K/2017). The Tribunal further observed that the Revenue's appeal against that decision to the Hon'ble Calcutta High Court (in ITA No. 26/2022) was dismissed on 25.07.2022, with the High Court sustaining the Tribunal's order. Consequently, following the judgment of the Hon'ble Calcutta High Court, the Tribunal sustained the order passed by the CIT(A) and dismissed the grounds raised by the Revenue. The retention money was thus treated as deferred payment and deductible. No issue was expressly left undecided.

What were the facts?

The Revenue has appealed against the order of the CIT(A)-20, Kolkata, for Assessment Year 2016-17. The appeal concerns the treatment of retention money amounting to Rs. 1,59,94,96,669/-. The Revenue's grievance is that the CIT(A) erred in treating this amount as deferred payment and thus deductible from the total income. The Revenue argues that the assessee's claim of TDS credit against this retention money indicates it was ascertainable as income in the relevant financial year. The assessee, M/s. EMC Ltd., which is currently undergoing Corporate Insolvency Resolution Process (CIRP), supported the CIT(A)'s order. The assessee highlighted that the issue is covered by a co-ordinate bench's decision in its own case for AY 2014-15, which was subsequently upheld by the Hon'ble Calcutta High Court.

What were the issues?

1. Whether, in the facts and circumstances of the case, the Hon'ble CIT(A)-20, Kolkata, erred in holding the retention money of Rs. 1,59,94,96,669/- as deferred payment and hence deductible from the total income, when the assessee company had claimed TDS credit against the retention money, establishing it as ascertainable income for AY 2016-17 (Section 145 of the Income Tax Act, 1961)? Contentions: Assessee: The issue is squarely covered in favour of the assessee by the co-ordinate bench in ITA No. 2149/K/2017 for AY 2014-15. This decision was upheld by the Hon'ble Calcutta High Court in ITAT/26/2022 on 25.07.2022, dismissing the Revenue's appeal. Therefore, the CIT(A)'s order should be sustained. Revenue: The CIT(A) erred in treating the retention money as deferred payment and deductible. The assessee's claim of TDS credit against this amount demonstrates that it was ascertainable income in the relevant financial year, and thus the CIT(A)'s view is unsustainable.

Which sections of the Income-tax Act were involved?

Section 145

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA BENCH “C” KOLKATA

Before: SHRI RAJESH KUMAR, HON’BLE & SHRI SONJOY SARMA, HON’BLE

For Appellant: Shri Sunil Surana, AR
For Respondent: Shri Rakesh Kumar Das, CIR, DR
Hearing: 21.11.2023Pronounced: 22.11.2023

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH “C” KOLKATA BEFORE SHRI RAJESH KUMAR, HON’BLE ACCOUNTANT MEMBER AND SHRI SONJOY SARMA, HON’BLE JUDICIAL MEMBER IT(SS)A No. 01/KOL/2023 Assessment Year: 2016-17 DCIT, Central Circle-1(2), M/s. EMC Ltd. (On CIRP) Vs. Kolkata PAN: AAACE 7582 J (Appellant) (Respondent) Present for: Appellant by : Shri Sunil Surana, AR Respondent by : Shri Rakesh Kumar Das, CIR, DR Date of Hearing : 21.11.2023 Date of Pronouncement : 22.11.2023 O R D E R PER SONJOY SARMA, JM: The present appeal has been preferred by the revenue against the order dated 29.11.2022 passed by the Ld. Commissioner of Income Tax (Appeals) -20, Kolkata [hereinafter referred to as the CIT(A)] relevant to AY 2016-17. The revenue has raised the following grounds of appeal:

“i. Whether in the facts and circumstances of the case, Hon’ble CIT(A)-20, Kolkata is erred in holding the retention money of Rs. 1,59,94,96,669/- as deferred payment and hence deductible from the total income where the assessee company had itself claimed TDS credit against the retention money which established that the retention money reasonably ascertainable as income in the hands of the assessee in the concerned F.Y. 2015-16 relevant to A.Y. 2016- 17. ii. That department craves leave to add, alter or modify any or all grounds of appeal either before or during course of appellate proceedings.” 2. At the time of hearing, ld. DR submitted that the ld. CIT(A) has erred in law while deciding the issue of retention money of Rs. 1,59,94,96,669/- as deferred payment. Therefore, he viewed that it is deductable from the total income of the assessee. However

2 IT(SS)A No.01/KOL/2023 M/s. EMC Ltd. (on CIRP) A.Y. 2016-17 assessee company had claimed TDS credit against the retention money which itself established the fact that retention money as ascertainable as income in the hands of assessee. In such situation, the view taken by the ld. CIT(A) cannot be sustained and needs to be set aside of this Tribunal. On the other hand, ld. AR supported the order passed by the ld. CIT(A). The ld. AR further contended that the instant issue is squarely covered in favour of assessee’s own case by the co-ordinate bench in ITA No. 2149/K/2017 dated 27.05.2020 (DCIT vs M/s. EMC Limited) for A.Y. 2014-15 and following the same decision, ld. CIT(A) allowed the claim of the assessee and granted relief to the assessee. Therefore, the impugned order challenged by the department need not required to be interfered by the Tribunal any more. Further, he submitted that the order which was followed by the Tribunal while allowing the appeal of the assessee i.e. ITA No. 2149/Kol/2017 (supra) was challenged by the revenue before the Hon’ble Calcutta High Court, wherein the Hon’ble Calcutta High Court dismissed the appeal filed by the revenue in ITAT/26/2022 IA No GA/2/2022 on 25.07.2022 and sustained the order passed by the Tribunal, therefore there is no iota doubt regarding the findings given by the ld. CIT(A) in favour of the assessee by relying on the decision rendered by the Tribunal. As such the order passed by the ld. CIT(A) needs to be sustained.

3.

We after hearing the rival submission of the parties and perusal of the material available on record. We notice that the instant issue is squarely covered in favour of the assessee by the decision of co-ordinate bench in assessee’s own case in ITA No. 2149/Kol/2017 for A.Y. 2014-15 and against which the revenue went into appeal before Hon’ble Calcutta High Court in ITA No. 26/2022 IA No. GA/2/2022 wherein Hon’ble Calcutta High Court vide order dated 25.07.2022 sustained the order passed by the

3 IT(SS)A No.01/KOL/2023 M/s. EMC Ltd. (on CIRP) A.Y. 2016-17 Tribunal. Therefore, the instant issue is squarely covered in favour of the assessee as per the judgement rendered by the Hon’ble Calcutta High Court in ITA No. 26/2022 PCIT vs M/s. EMC Limited and following the same, we sustained the order passed by the ld. CIT(A) and dismiss grounds taken by the revenue.

4.

In the result, the appeal of the revenue is dismissed. Order pronounced in the open court on 22.11.2023

Sd/- Sd/- [Sd/- (RAJESH KUMAR) (SONJOY SARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Kolkata, Dated: 22.11.2023 Biswajit, Sr. P.S. Copy to: 1. The Appellant: DCIT, Central Circle-1(2), Kolkata 2. The Respondent: M/s. EMC Ltd. (On CIRP), 56, Canal East Road, Bellaghat, Kolkata-700085 & since the company is in CIRP, the address of IRP is: To Shri CA Kannan Tirunvengadam, The Resolution Professional of EMC Ltd. Netaji Subhas Villa 18, Karunamoyee Ghat Raod (Tollygunge Area), Flat-3C, Kolkata- 700082. 3. The CIT, 4. The CIT (A) 5. The DR

//True Copy// [ By Order

Assistant Registrar ITAT, Kolkata Benches, Kolkata

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