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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI RAVISH SOOD & SHRI RATHOD KAMLESH JAYANTBHAI
आदेश आदेश / ORDER आदेश आदेश
PER RATHOD KAMLESH JAYANTBHAI, AM:
This appeal is filed by the assessee aggrieved from the order of
the Commissioner of Income Tax (Appeal), Bilaspur (CG) [ Here in
after referred as Ld. CIT(A)] for the assessment year 2010-11 dated
18.03.2016 which in turn arises from the order passed by the
assessing officer passed under Section 143(3) of the Income tax Act,
1961 (in short 'the Act') dated 26.03.2013.
Before us the assessee has assailed the impugned order on the
following grounds of appeal:
“1. In the facts and circumstances of the case, order is bad in law as well as on facts. 2. That the addition of Rs. 3,00,000/- out of share Application Money made by Learned Assessing Officer and confirmed by Learned CIT(Appeals) is unjustified. 3. That the Learned CIT(Appeal) has erred in confirming the addition on account of Tax deducted at source of Rs. 2,85,714/- made by the contractee on advance money. 4. That the Learned CIT(Appeal) has erred in confirming the addition on account of Tax deducted at source of Rs. 627/- made by SECL Baikunth. 5. That the Learned CIT(Appeal) has erred in confirming the disallowance of Rs. 14,06,547/- out of interest paid to Financial Institutions u/s 40(a)(ia) of the Income Tax Act.”
The fact as culled out from the records is that the assessee filed
its original return for Assessment Year 2010-11 on 14.10.2010
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disclosing a total income of Rs. 4,72,73,995/-. The return was duly
processed u/s 143(1) of the Act on 16.01.2012 and order u/s 154 was
also passed on 01.03.2012 leading to a creation of refund of Rs.
6,22,680/-.
3.1 Later on case was selected for scrutiny. Notices u/s
143(1)/142(2) were issued from time to time. At the time of scrutiny, it
was observed that the assessee during the year received a sum of Rs.
21,70,000/- as share application money from 9 different people. These
monies were received in respect of purchase of equity shares of Rs.
10/- sold at a premium of Rs. 90/-. Notices u/s 131 of the Act were sent
to all fresh applicant fixing date of hearing on 31.01.2013. Out of 9
shareholders, the Assessing Officer has made an addition of Rs.
7,00,000/- out of share application money received from following
person:-
Name of Share Applicant Amount Rs.
1)Shri Arun Kumar Agrawal Rs. 3,00,000.00 2)Shri Raghbaran Prasad Yadav Rs. 2,00,000.00 3)Shri Pushkar Prasad Yadav Rs. 2,00,000.00 Total Rs. 7,00,000.00
4 ITA No. 67/RPR/2017 A.Y.2010-11
Out of above seven share applicant, the ld. AO made addition for
three share applicant. The ld. CIT(A) has sustained the addition for one
person for an amount of Rs. 3,00,000/- being share application
received from Sh. Arun Kumar Agrawal. In respect this share applicant
the ld. AR appearing on behalf of the assessee submitted that the ld.
CIT(A) has not considered the plea of the assessee. The relevant
finding of the Assessing Officer in this regard is that Shri Arun Kumar
Agarwal has received merely advance from the proposed customer
Shri Akash Agarwal against the sale of property and the land property
is not found part of balance-sheet of the assessee. He further observed
that the transaction is fictitious and fabricated. Even at the time of
hearing, the ld. AR of the assessee unable to substantiate whether
share applicant has in fact sold any property or not?.
Per contra, the ld. DR heavily relied upon the findings of the ld.
AO and CIT(A) and stated that the assessee unable to place anything
to the contrary to the findings of the lower authorities.
We have persuaded the orders of the lower authorities and
arguments placed by the both the party for the Ground no. 1 & 2 raised
5 ITA No. 67/RPR/2017 A.Y.2010-11
by the assessee. Based on the observations of lower authority and ld.
AR of the assessee did not controvert the findings of the detailed
observations and findings of the lower authorities. The assessee
company unable to prove the capacity of the depositor in the form of
share application money. The ld. AR of the assessee has relied on the
decision of Bombay High Court in the case of CIT -1 Vs. Gagandeep
Infrastructure Private Limited. In this case the Hon’ble High Court has
held that when the three essential tests while confirming the pre-
proviso to section 68 of the act laid down by the courts namely
genuineness of the transaction, identity and the capacity of the investor
have all been examined it does not entitle the revenue to add the same
to the assessee’s income as unexplained cash credit. As in this case
the capacity of the investor is not proved by the cogent evidence
therefore, the cash relied upon is different on facts. The ld. AR also
relied up the decision of ITAT Mumbai benches in the case of Dy. CIT
Vs. Shubham Motiwala & Jewelers wherein the coordinate bench
comprise of the learned Judicial Member has categorically held that on
being satisfied that the assessee has proved the credit on three limbs
the addition cannot be made. Whereas as stated here in above that the
assessee has not proved on one limb and therefore, the ratio of this
6 ITA No. 67/RPR/2017 A.Y.2010-11
decision will also not applicable to the fact of the case on hand. Based
on this observation we did not find any reason to deviate from the
findings of the lower authorities and in the light of that observations the
Ground No. 1 and 2 raised by the assessee is dismissed.
The Ground No. 3 is in relation to an addition of Rs. 2,85,714/-
being the amount of TDS made by M/s Genon Dunkerlee & Company
Ltd. The Assessing Officer is of the view that the assessee has not
disclosed the corresponding receipt of Rs. 1,42,85,714/- from said
company. However, on claim of TDS made by the assessee and the
income is not offered the AO has disallowed this sum of Rs. 2,85,714/-.
Aggrieved from the said addition, the assessee has preferred an
appeal before ld. CIT(A) and the ld. CIT(A) has dismissed. The said
ground of the assessee wherein he has observed as under:-
“Decision- Before me the ld. AR had reiterated the submission made before the AO. I have carefully considered the submission made before the AO and observation made by the AO, the Rule 37BA read with section 199 of I.T. Act clearly lays down in sub-rule 3(ii) that where tax had been deducted at source and paid to the Central Government Account and the income is assessable over a number of year, credit for tax deducted at source shall be allowed across those years in the same proportion in which income is assessable to tax. In view of the clear language of the rule 37BA, the credit cannot be allowed. I do not find any infirmity in the order of the AO. The ground of appeal is hereby dismissed.”
7 ITA No. 67/RPR/2017 A.Y.2010-11
As the assessee did not succeed and therefore, the assessee
has raised Ground No. 3 for addition of the said amount of Rs.
2,85,714/- before us. The ld. AR of the assessee has submitted as
under:-
• Ld. AO added the amount of TDS claim of Rs. 2,86,341/- total income holding that corresponding income was not offered. • The disallowance is wrong based on incorrect appreciation of law. Amount of TDS claimed is not income. • Since corresponding income was not offered to tax during the year, he should have directed the AO to give credit for TDS in the year in which the corresponding income was offered to tax. Sec. 199- Rule 37BA (3)- • Impugned disallowance may be cancelled and Ld. AO may kindly be directed to give credit in the year in which corresponding income is offered to tax- • Smt. Varsha G. Salunke vs. DCIT [2005 (9) TMI 226 ITAT Bombay-F]
In addition to the above written submission, the ld. AR of the
assessee has placed reliance on the decision of the co-ordinate Bench
of this Tribunal judgment in the case of M/s B. B. Verma vs. JCIT,
Bilaspur in ITA No. 324/RPR/2016 dated 09.05.2022. The relevant
finding of the Co-ordinate Bench decision is as under:-
“8. After having given thoughtful consideration to the aforesaid issue in hand, we are of the considered view, that as observed by the Assessing Officer, and rightly so, as per Section 199 of the Act r.w Rule 37BA(3)(i) and (ii), the credit for tax deducted at source is to be allowed to the assessee in the assessment year in which the corresponding income is assessable. As such, where tax is deducted at source and paid to the Central Government over a number of years, then, credit for TDS shall be allowed across those years in the same proportion in which the income is assessable to tax. Backed by the aforesaid position of law, we are of the considered view that
8 ITA No. 67/RPR/2017 A.Y.2010-11
no infirmity emerges from the orders of the lower authorities who have rightly restricted the assessee’s claim for credit of TDS to the extent of the sum that was relatable to the corresponding income/receipt that was accounted for in its income for the year under consideration. At the same time, finding substance in the claim of the Ld. Authorized Representative (for short ‘AR’) for the assessee that the claim of the assessee for credit of remaining amount of TDS is to be allowed in its hands on pro-rata basis in the respective years, in which, the same is offered as its income, accordingly direct the AO so. We, thus, in terms of our aforesaid observations disposed off the Ground of appeal No.1.”
Per contra, the ld. DR has relied on the finding of the lower
authorities and has not placed a decision contrary to arguments of the
ld. AR.
We have heard both the parties, perused materials available on
record. The written submission and following decision of the Co-
ordinate Bench, the addition made by the Assessing Officer for an
amount of Rs. 2,85,714/- is hereby deleted and the at the same time
the Assessing Officer is directed to allow the credit of this amount of
TDS in respect of year in which the assessee has offered the income.
In terms of these observations the Ground No. 3 raised by the
assessee is hereby allowed.
In Ground No. 3, since facts and circumstances of the case are
exactly identical to facts and circumstances of the case Ground No. 4,
9 ITA No. 67/RPR/2017 A.Y.2010-11
our findings and directions contained therein shall apply mutatis
mutandis to this appeal and therefore, Ground no. 4 raised by the
assessee is allowed.
Ground no. 5 is in relation to the disallowance of finance charges
paid to NBFC under section 40(i)(ia) for an amount of Rs. 14,06,547/-.
In this regard the ld. AR of the assessee prayed in the petition to allow
additional evidence to be placed on record in relation to the
disallowance made. The contentions placed in the petition reads as
under :-
“May it please your honours,
That aggrieved by the order of ld. Commissioner of Income-tax (Appeals), Bilaspur, appellant filed above appeal inter alia challenging confirmation of disallowance of Rs. 14,06,547/- made u/s 40(a)(ia) of the Income-tax Act, 1961.
That as per order of Hon’ble Delhi High Court in the case of CIT vs. Ansal Landmark Township Pvt. Ltd. (279 CTR 384) and amended provisions of sec. 40(a)(ia) read with 1st proviso to sec. 201(1), the deductor will not be deemed to be an assessee in default and no disallowance will be made if he furnishes certification under said section but appellant could not file said certificate u/s 201(1) of the Act earlier.
That accordingly the appellant is filing said certificates under Rule 29 of Income-tax (Appellate Tribunal) Rules, 1963 with prayer that the same may kindly be taken on record and consider the same while adjudicating the matter in the interest of justice.”
10 ITA No. 67/RPR/2017 A.Y.2010-11
Per contra, the ld. DR has not objected to the petition admitting
the additional evidence. However, ld. DR stated that it is the
responsibility of the assessee to obtain the evidence in the time
provided by the lower authority. He also stated that these being the
issue of verification of the exact disallowance made of Rs. 14,06,547/-
and the certificate produced by the assessee by way of additional
evidence where the certificate produced is for an amount of Rs.
13,35,070. Therefore, these facts are required to be verified by the
Assessing Officer.
We have heard both the parties, perused materials available on
record. We aptly agree with the contentions raised by the assessee in
petition filed under rule 29 of ITAT Rules, 1963 and the additional
evidence is admitted for adjudication on merits. But at the same time
swayed from the argument of the ld. DR that the matter is required to
be restored back to the file of the Assessing Officer to decide about the
admissibility of the amount of interest amount based on the CA
certificate produced by the assessee. As the amount disallowed in the
assessment order and amount reflected in the certificate of accountant
under first provision to sub-section (1) of Section 201 of the Income
11 ITA No. 67/RPR/2017 A.Y.2010-11
Tax Act, 1961 for certifying the furnishing of return of income, are
differing. Even based on this difference of the amount disallowed and
the amount for which the assessee submitted a CA certificate in
support for allowability of the interest paid to NBFC needs verification
at the end of the assessing officer. Thus, ld. Assessing Officer is
directed to pass a speaking order in accordance with law after giving
proper opportunity to the assessee, as per the evidence placed on
record within a reasonable time and allow the interest to that extent of
evidence placed on record vis a vis the amount of interest claimed.
Therefore, the Ground no. 5 raised by the assessee is allowed for
statistical purpose.
In the result, the appeal of the assessee is partly allowed.
Order pronounced in open court on 10th June, 2022.
Sd/- Sd/- RAVISH SOOD RATHOD KAMLESH JAYANTBHAI JUDICIAL MEMBER ACCOUNTANT MEMBER रायपुर/ RAIPUR ; �दनांक / Dated : 10th June, 2022 Ganesh Kumar आदेश क� ूितिल�प अमे�षत आदेश क� ूितिल�प अमे�षत / Copy of the Order forwarded to : आदेश क� ूितिल�प अमे�षत आदेश क� ूितिल�प अमे�षत 1. अपीलाथ� / The Appellant. 2. ू�यथ� / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G)
12 ITA No. 67/RPR/2017 A.Y.2010-11
The Pr. CIT-1, Raipur (C.G) 5. �वभागीय ूितिनिध, आयकर अपीलीय अिधकरण,रायपुर ब�च, रायपुर / DR, ITAT, Raipur Bench, Raipur. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER,
िनजी सिचव / Private Secretary आयकर अपीलीय अिधकरण, रायपुर / ITAT, Raipur.
13 ITA No. 67/RPR/2017 A.Y.2010-11
Date 1 Draft dictated on Sr.PS/PS 2 Draft placed before author Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr.PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order