SHRI A.G.SHETTY,,CHANDRAPUR vs. A.C.I.T. , CHANDRAPUR CIRCLE, CHANDRAPUR

PER R.S. SYAL, VP: This appeal by the assessee arises out of the order passed by the Commissioner of Income-tax (Appeals)-II, Nagpur on 28-06-2013 in relation to the assessment year 2007-08. 2. The only issue raised in this appeal is against not allowing credit for the TDS amounting to Rs.10,72,669/-.

2 ITA No. 152/NAG/2017 A.G. Shetty

derived income from the business of supply of loading labour on

contract basis to Ultra Tech Ltd. (sic L & T Limited). The company, inter alia, created a provision for payment to the

assessee for a sum of Rs.4,76,74,168/- on which tax amounting to

Rs.10,72,669/- was deducted at source. The assessee claimed

credit for such TDS without offering the receipt to tax. On being

called upon to explain as to why the corresponding income was not

offered for taxation, the assessee submitted that the sum of Rs.4.76

core was as estimated provision created by Ultra Tech Cement Ltd.

to be settled in the succeeding year. The AO refused to allow

credit for the TDS of Rs.10,72,669/- on the ground that the

corresponding income was not offered for taxation. The ld.

CIT(A) countenanced the view point of the AO, which led the

assessee to approach the Tribunal.

material on record, it is seen that the assessee admittedly claimed

credit for TDS of Rs.10.72 lakh on the corresponding provision for

receipt of Rs.4.76 crore, which was not offered for taxation. The

claim of the assessee before the Tribunal is that the provision for

3 ITA No. 152/NAG/2017 A.G. Shetty

receipt of Rs.4.76 crore does not represent any income as it was

only a provision towards reimbursement of certain expenses by

Ultra Tech Ltd., such as, Leave wages, Holiday wages, Medical

expenses. In support of such a contention, the ld. AR relied on

page 8, being, the certificate issued by Ultra Tech Cement Ltd,

(undated) certifying that the amount reimbursed to the assessee

towards leave wages, holiday wages, medical expenses etc., does

not involve any profit element. This certificate does not refer to

any specific amounts and is a general assertion. The ld. AR relied

on page 25 of the paper book, which is a three-paged

Reconciliation statement of gross receipts shown in the Profit and

loss account and TDS certificates for the year 2006-07. He

referred to the last four items dated 31-03-2007 totalling to Rs.4.76

crore as the amounts for which Ultra Tech Cement Ltd. estimated a

provision on which tax of Rs.10.72 lakh was deducted at source.

On going through the break-up of such amount of Rs.4.76 crore, it

is seen that it comprises of four items, namely, Gratuity settlement

of Rs.3.48 crore; LTA Advance of Rs.32,10,000/-; Bonus/ex-gratia

reimbursement of Rs.88.72 lakh; and Bonus/ex-gratia

reimbursement of Rs.7.69 lakh. Thus, it can be seen that there is

4 ITA No. 152/NAG/2017 A.G. Shetty

complete mismatch between the assessee’s contention based on the

Certificate issued by Ultra Tech Cement Ltd. by which the

company certified that payment against Leave wages, Holiday wages and Medical expenses etc. were reimbursements vis-à-vis

the assessee’s own reconciliation statement showing the amounts

towards Gratuity settlement, LTA Advance and Bonus/ex-gratia

reimbursement. The certificate of Ultra Tech Ltd. is general and

does not refer to any particular amounts for the year under

consideration. No letter from the Company has been placed on

record indicating the true nature of the specific amount of Rs.4.76

crore. In contrast, it can be seen from para ii) on the penultimate

page of the assessment order that the assessee contended before the

AO that the receipt of Rs.4.76 crore did not accrue to the assessee

during the relevant financial year and as such was not offered for

taxation. This implies that the assessee contended before the AO

that though it was a business receipt, but did not pertain to the year

under consideration. Thus, it is vivid that there are different

versions about the receipt of Rs.4.76 crore. When the nature of

receipt itself is unclear as to its taxability or otherwise, the question

of allowing credit for TDS on such an amount cannot be decided.

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Under such circumstances, I am satisfied that proper adjudication

on this issue cannot be done unless complete factual scenario is

looked into. Due to non-availability of the relevant evidence and

conflict between the Certificate and the Reconciliation statement as

discussed above on one hand and the assessee’s own contention

before the AO on the other, I am of the considered opinion that it

would be just and fair if the impugned order is set aside and the

matter is restored to the file of the AO. I order accordingly and

direct the AO to first examine the precise nature of the Rs.4.76

crore and then decide the issue afresh as per law after allowing

reasonable opportunity of hearing to the assessee.

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Sd/- (R.S.SYAL) VICE PRESIDENT पुणे Pune; �दनांक Dated : 23rd September, 2022 Satish

6 ITA No. 152/NAG/2017 A.G. Shetty

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order is forwarded to: 1. अपीलाथ� / The Appellant; 2. ��यथ� / The Respondent; 3. The CIT(A)-II, Nagpur 4. The Pr.CIT-II, Nagpur िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, 5. Nagpur / DR, Nagpur गाड� फाईल / Guard file 6.

आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

Date 1. Draft dictated on 22-09-2022 Sr.PS 2. Draft placed before author 23-09-2022 Sr.PS 3. Draft proposed & placed before the JM second member 4. Draft discussed/approved by Second JM Member. 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *