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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
O R D E R
PER PAVAN KUMAR GADALE JM:
The appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) - 21, Mumbai, passed u/s.154 and 250 of the Income Tax Act., 1961. The assessee has raised the following grounds:
“1.0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the order of Ld. AO wherein the credit of TDS u/s 194IA of Rs. 3,00,000/- had not been allowed though corresponding income had been considered for tax. Swati Textiles Pvt Ltd., Mumbai 2.0 The Ld. CIT(A), before disallowing the appellants claim of TDS of Rs. 3,00,000/-, ought to have considered the understand vital facts, being; a. The corresponding income on sale of immovable property made of Rs. 3,00,00,000/- on which TDS @ 1% is deducted of Rs. 3,00,000/- had been considered for taxation; b. The TDS certificate in For 26QB, TDS challan paid by the deductor and 26AS statements had been filed on record; c. the appellant had claimed the credit of disputed TDS in manual return filed on 15.03.2017 and in the e-return u/s. 148 filed on 14.07.2017.
The Brief facts of the case are that, the assessee company is engaged in the business of trading of vehicles. Since, the return of income was not filed and the notice u/sec148 of the Act was issued by the A.O. The income tax department has received the information that the assessee has sold property for Rs.6crores in the F.Y 2013-14. The A.O observed that the assessee has failed to file the return of income and has the reason to believe that the income has escaped assessment and therefore notice u/s 148 of the Act was issued. In response to the notice, the Ld. AR of the assessee appeared from time to time and submitted the copy of the income tax return along with Audited financial statements. The assessee company has filed the objections on the reasons recorded for reopening of the Assessment and were disposed off. Further, the notice u/s 143(2) and 142(1) of the Act along Swati Textiles Pvt Ltd., Mumbai with questionnaire was issued. Whereas, the A.O has called for the details of immovable property and the assessee has filed the copy of agreement of assignment cum-sale dated 19.09.2013 and the copy of deed of assignment dated 26.11.2013 in respect of sale of property. The assessee also filed the explanations on 10.08.2018 referred at para 9 of the assessment order. The A.O found that the assessee has executed provisional agreement of sale of Rs. 3 crores on the buyer and there after sale deed was executed on 28-11-2013 for the same amount. Further the A.O. has that observed both the deeds relate to only one property Of Rs 3 crores and not Rs 6 Crores as reported in the ITD-CIB system. The A.O. computed the total income of Rs.(-)7,35,675/- and passed the order u/s 143(3) r.w.s 147 of the Act dated 17.10.2017. The assessee has filed the rectification petition u/sec154 of the Act for claim of TDS deducted u/sec194IA of the Act by the purchaser of the Property. But the assessing officer has rejected the claim by observing that the assessee has made a claim in the return of income filed in response to the notice u/sec148 of the Act and passed the order on 18-05-2018.
3. Aggrieved by the rectification order, the assessee has filed an appeal with the CIT(A). The grievance of the assessee is that the A.O has erred in rejecting the Swati Textiles Pvt Ltd., Mumbai application under 154 of the Act in not allowing the credit of TDS u/s 194IA Rs. 3 lakhs corresponding to the receipt of sale consideration disclosed in the assessment order. Whereas, the CIT(A) has dealt on the facts and the submissions and upheld the action of the assessing officer and dismissed the appeal. Aggrieved by the CIT(A) order, the assessee has filed an appeal before the Hon’ble Tribunal.
4. At the time of hearing, the Ld. AR of the assessee submitted that the A.O and the CIT(A) has erred in rejecting the TDS claim of Rs. 3 lakhs u/s 194IA of the Act .Whereas, the assessee has disclosed the income from capital gains and TDS credit in the return of income . Further,the Form no 26QB, TDS challan paid by the deductor is filed and the TDS is reflected in the Form 26AS of the assessee and prayed for allowing the Appeal. Contra, the Ld. DR supported the order of the CIT(A).
We heard the rival submissions and perused the material on record. The sole crux of the disputed issue as envisaged by the Ld.AR is with respect of granting of credit of TDS of Rs. 3 lakhs u/s 194IA of the Act. The Ld.AR submissions are that the purchaser has deducted the TDS @1% and has deposited in the Govt Account and issued TDS certificate. The Ld. AR referred to the paper Swati Textiles Pvt Ltd., Mumbai book at page 1 where form no 26QB is filed and also Form 26AS of the assessee, were Rs 3 lakhs deducted by the M/s Bhavna Autopure Infra Pvt Ltd is reflected. The Ld.AR contentions are that, the assessee in entitled for the TDS credit irrespective of the facts that it was claimed in the return of income filed u/sec148 of the Act and the Ld.AR relied on the fallowing judicial decisions:
“1. CIT Vs. Pruthvi Brokers & Shareholders, 23 Taxmann.com 23 (Bom).
2. CIT Vs. Vali Brothers, 149 Taxman 233 (Albd).
Balram Kapoor Vs. ITO, 35 ITD 1 (Nag).
Vasco Sales & Marketing Corp Vs. DCIT, 34 Taxmann.com 229 (Ker).
5. Indglonal Investment & Finance Ltd., 12 Taxmann.com 108 (Del).
We found the Hon’ble Allahabad High Court in the case of CIT Vs Vali Brothers (Supra) has held as under:
“Section 237, r.w.s 148, of the Act – Refunds – General – Assessment Year 1989-90 – Pursuant to notice u/s 148 assessee filed its return of income and claimed refund of amount deposited by it towards advance tax – AO found that total income was deductable u/s 80HHC and there was no escapement of income and therefore he dropped proceedings, but did not refund amount claimed by assessee – whether order for dropping proceedings amounted to order of assessment in pursuance of return filed pursuant to notice u/s 148 – Held, yes – whether, therefore, assessee would be Swati Textiles Pvt Ltd., Mumbai entitled to refund of excess amount deposited towards advance tax – Held, yes. 7.Considering the judicial decisions and the provisions of law. We are of the opinion that though the assessee has claimed TDS credit in the return of income filed manually and electronically in response to notice U/sec148 of the Act, the TDS credit cannot be denied as the A.O. in assessment order has considered the total sale consideration under income from capital gains which is not disputed. Accordingly, we considering the overall facts and the judicial decisions direct the Assessing officer to grant the TDS credit to the assessee after verification and examination of the TDS certificate, Form 26AS and the challan and allow the grounds of appeal of the Assessee.
In the result, the appeal filed by the assessee is allowed.