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Income Tax Appellate Tribunal, “D” BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN
आदेश /O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER:
The assessee filed this appeal against the order of the Commissioner of Income Tax (Appeals)-1, Coimbatore in dated 29.07.2016 for assessment year 2012-13.
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M/s. Elgi Rubber Company Ltd., the assessee is a manufacturer and seller of tread rubber, bonding gum and allied products, retreading machinery, reclaim rubber, patch, envelope, BVC, abrasive tools and accessories, income from windmill & trading in shares and securities.
3. In the assessment made for assessment year 2012-13, the AO, inter alia, found that the assessee has claimed overseas professional charges etc without deducting TDS as required u/s. 40(a)(i) towards which but for furnishing the breakup, the assessee did not offer any explanation. Hence, relying on the CBDT circular 7 dated 22.10.2009, in which the CBDT has withdrawn its earlier circulars no. 23, 163 & 786, read with explanation 4 to section 9(1)(vii) & section 40(a)(i) disallowed the claim. Further, the assessee claimed Rs. 7,22,825/- towards cost of construction its LTCG in respect of its Pune flat. Since, the assessee has not produced any proof towards the cost of construction, the AO reworked the LTCG without giving any credit towards to the cost of construction. Aggrieved, the assessee filed an appeal before the CIT(A). Before the CIT(A), the assessee pleaded relying on the Article 15 of the Indo-USA DTAA and Article XIV of the Indo-Australia DTAA pleaded to allow its claim on overseas professional charges. However, the CIT(A) held that the impugned payments fell within Article 12 of DTAA between Indo-USA & Indo-Australia DTAA and accordingly held that the assessee should have deducted tax on such payments, which it failed to do so and hence upheld the :-3-: ITA No. 3050/Mds/2016 action of the AO. In respect of the computation made under the LTCG, the CIT(A) upheld the action of the AO for the reason that the assessee did not provide any clear & convincing evidence for the bifurcation.
Aggrieved against the order of the CIT(A), the assessee filed this appeal, challenging the decisions of the CIT(A) on the above issues and also pleading that the CIT(A) did not consider its plea viz ., ground no 5 in respect of short credit of TDS by Rs. 23,70,329/-.
Before us, the assessee filed a paper book and sought our attention to the petition for clarification of name of overseas professionals and pleaded that by oversight the name of one of the overseas professional was inadvertently mentioned as “Narton Rose LLP”, however, the payment was actually made to Mr. Chuck Stand field only and prayed that the payment made to overseas professionals may be read as per its petition filed before us.
On merit, it pleaded that the CIT(A) did not consider properly about Article 15 of the impugned DTAAs and wrongly proceeded to decide on Article 12. In this regard, our attention was invited to this tribunal decision in the assessee’s case for assessment year 2010-11 in dated 05.08.2015 wherein, similar issue was remitted back to the AO for a fresh consideration in the light of the prayer made by the AR. With regard to the computation of the LTCG, the AR invited our attention to the paperbook
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Thereafter, the AR invited our attention to the ground no 5 taken before the CIT(A), seeking the CIT(A) to direct the AO to allow the TDS credit in entirety, on which the CIT(A) has not adjudicated the matter. Per contra, the DR submitted that the assessee has not placed relevant materials before the AO and the CIT(A) correctly decided the issues and supported the orders of the lower authorities.
We heard the rival submissions and gone through the relevant material.
On the above facts and circumstances, we deem it fit to restore these issues to the AO for a fresh examination and due decision by a speaking order. The AO after affording adequate opportunity to the assessee would decide the above issues in accordance with law.
In the result, the assessee’s appeal is treated as allowed for statistical purposes.
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Order pronounced on Monday, the 05th day of February, 2018 at Chennai.