SCARLET IMPEX,KOLKATA vs. A.C.I.T, CIRCLE-37, KOLKATA., KOLKATA

Per Dr. Arjun Lal Saini, AM:

The captioned appeal filed by the assessee pertaining to the Assessment Year 2010-11, is directed against the order passed by the ld. CIT(A), XXIV, Kolkata in Appeal No.1225/CIT(A)-XXIV/C-37/12-13, dated 27.08.2013, which in turn arises out of an order passed by the Assessing Officer (AO),Under Section 143(3) of the Income Tax Act 1961, (hereinafter referred to as the ‘Act’), dated 21.12.2012. 2. Brief facts of the case qua the assessee are that the assessee filed its return of income on 30.9.2010 for the assessment year 2010-2011 declaring total income of Rs.61,15,221/- and the same was processed u/s.143(1) of the Act. Later on, assessee’s case was selected for scrutiny u/s.143(3) of the Act and the AO has completed the assessment by making the addition of Rs.85,20,808/-. The assessee had paid to clearing

2 ITA No.2508/13 Scarlet Impex and forwarding agents to the tune of Rs.88,20,808/- but he had not

deducted TDS, hence, the amount is disallowed by the AO u/s.40(a)(ia) of

the Act.1961.

an appeal before the ld. CIT(A), who has confirmed the addition made by

the AO (after giving a partial relief to the assessee), observing the

followings :-

3 ITA No.2508/13 Scarlet Impex 5. Cash 1168.00 Total 32016.81 Total comes of Rs. 32,017 which is not violation of 194C of the IT. Act and the balance of Rs. 84,88,791 is violation of 194C of the IT. Act. 09. Considering the above findings and facts of the cases I confirm the addition made by the A.O. of Rs. 84,88,791/- u/s. 40(a)(ia) of the IT. Act. Balance of Rs. 32,017/- is deleted. These grounds are partly allowed.”

appeal before us and has taken the following grounds of appeal :-

l. That on facts as well as on law, the order passed by the Learned CIT(A)-XXIV, Kolkata is perverse, arbitrary, bad in law and is liable to be quashed. 2. That, on facts as well as on law, the Learned CIT(A)-XXIV, Kolkata has erred in confirming that view of the Learned AO that the provision of section 194C of the Income tax Act is applicable in case of reimbursement of expenses made to clearing and forwarding agents amounting to Rs. 84,88,791/- 3. That, on facts as well as on law, the Learned CIT(A)-XXIV, Kolkata has erred in confirming the disallowance of the amount of Rs. 84,88,791/- reimbursed to clearing and forwarding agents under section 40(a)(ia) of the Income tax Act on account of alleged default under section 194C.

the assessee has not deducted the tax and paid to the revenue but the

deductee has paid the tax on behalf of the deductor(assessee). The AO

failed to verify that the tax has been deposited by the deductee. It is well

settled position of law that if deductor of the TDS has not deducted TDS

and pad to the Government but the deductee has paid TDS on behalf of

the deductor, then it would be sufficient compliance. That is, the

government is not losing the Revenue. Therefore, addition made by the

AO and confirmed by the ld. CIT(A) should be deleted.

4 ITA No.2508/13 Scarlet Impex The Ld. AR also requested the Bench that the AO did not verify the tax

deposited by the deductee, therefore, it is in the interest of justice to send

the case back to the file of AO to verify this fact and give the necessary

relief to the assessee.

the findings of the AO which we have already noted in our earlier para

and is not being repeated for the sake of brevity.

we are of the view that there is merit in the submissions of the assessee,

as the proposition canvassed by ld. AR for the assessee are supported by

the facts narrated by him above. The Ld. AR for the assessee has pointed

out that the TDS amount has been deposited by the deductee. The

assessee deductor neither deducted the TDS nor deposited to the

revenue account but the deductee has paid amount on behalf of the

deductor (assessee). This aspect has not been verified by the AO,

therefore, we are of the view to remit the case back to the file of AO with a

direction to verify as to whether income has recorded correctly and the

TDS amount has been paid by deductee to the revenue account. If the

AO finds that the deductee has paid the TDS amount to the Government

on behalf of the deductor(assessee) then he should give necessary relief

to the assessee. Accordingly, we remit the case back to the file of AO to

verify the TDS amount deposited by the deductee.

5 ITA No.2508/13 Scarlet Impex Order pronounced in the open court on this 20/01/2017. Sd/- Sd/- (A.T.VARKEY) (DR. A.L.SAINI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER कोलकाता /Kolkata; �दनांक Dated 20/01/2017 �काश �म�ा/Prakash Mishra,�न.स/ PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant-Scarlet Impex 2. ��यथ� / The Respondent.- ACIT, Circle-37, Kolkata 3. आयकर आयु�त(अपील) / The CIT(A), Kolkata. 4. आयकर आयु�त / CIT �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, कोलकाता / DR, ITAT, Kolkata 5. आदेशानुसार/ BY ORDER, 6. गाड� फाईल / Guard file. स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Asstt. Registrar) आयकर अपील�य अ�धकरण, कोलकाता / ITAT, कोलकाता