Income Tax Appellate Tribunal - Jaipur
Jai Ambey Wines, Ajmer vs Acit, Ajmer on 11 January, 2017
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM
vk;dj vihy la-@ ITA No. 676/JP/15
fu/kZkj.k o"kZ@Assessment Year : 2010-11
M/s Jai Ambey Wines, D-15 cuke The ACIT, Circle-2, Ajmer
Chander Vardai Nagar, Ajmer Vs.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN No. AAGFJ 7681 L
vihykFkhZ@Appellant izR;FkhZ@Respondent
vk;dj vihy la-@ ITA No. 991/JP/15
fu/kZkj.k o"kZ@Assessment Year : 2011-12
M/s Jai Ambey Wines, D-15 cuke The ACIT, Circle-2, Ajmer
Chander Vardai Nagar, Ajmer Vs.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN No. AAGFJ 7681 L
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@ Assessee by : Shri Subhash Porwal (CA)
jktLo dh vksj ls@ Revenue by : Shri R.A. Verma (Addl.CIT)
lquokbZ dh rkjh[k@ Date of Hearing : 05.01.2017
?kks"k.kk dh rkjh[k@ Date of Pronouncement : 11/01/2017.
vkns'k@ ORDER
PER SHRI VIKRAM SINGH YADAV, A.M.
These are two appeals filed by the assessee against the order of ld. CIT(A), Ajmer dated 01.06.2015 for Assessment Year 2010-11 and dated 05.11.2015 for Assessment year 2012-13 respectively. Since common issues are involved in both these appeals, the same were heard together and disposed off by this consolidated order.
ITA No. 676/JP/2015 M/s Jai Ambey WinesThe assessee has taken following grounds of appeal:
In ITA No. 676/JP/15 (A.Y. 2010-11):
(1) That under the facts of the circumstances of the case the Ld. CIT(A) has erred in rejecting application filed u/s 155(14)/154 without appreciating the facts and not considering provision of section 199/rule 37BA for credit of TDS/TCS.
(2) That under the facts of the circumstances of the case the Ld. CIT(A) has erred in non-granting TDS/TCS credit of Rs. 11,31,416/- without considering the facts.
In ITA No. 991/JP/15 (A.Y. 2011-12):
(I) That under the facts of the circumstances of the case the Ld. CIT(A) has erred non granting the credit of TCS credit claimed for members though their sales/purchase considered in hands of firm and not considering provision of section 199/rule 37BA for credit of TDS/TCS.
2. In respect of A.Y. 2010-11, briefly the facts of the case are that the AO in his order passed u/s 154 of the Act has rejected the claim of the appellant in respect of tax collected at source of Rs. 4,92,071/- for the reason that the TCS certificates are in different names and carry different PANs. The assessee carried the matter in appeal before the ld. CIT(A) and contended that the licence of liquor were issued by the Excise Department to various persons whose names have been mentioned in the TCS certificates. However, these persons are members of the firm in the name of M/s Jai Ambey Wines where the sales have been accounted and the credit for TCS should be given to the appellant firm as these individuals have not claimed the credit of the TCS. The ld. CIT(A) however did not agreed to the contentions of the ld. AR and his relevant findings are contained as under:
"2.1 I have considered the contentions of the appellant as well as order of the AO. It is seen that the AO in the order passed u/s 154 has rejected the 2 ITA No. 676/JP/2015 M/s Jai Ambey Wines claim of credit in respect of tax collected at source of Rs. 4,92,071/-. The TCS certificates submitted by the assessee were as under:
1. RSBCL, Jaipur Rs. 73,662.39 (Sh. Ashok Kumar)
2. RSBCL, Jaipur Rs. 23,635.14 (Sh. Anand Kumar)
3. RSBCL, Jaipur Rs.83,848.82 (Sh. Veer Kr. Srivastava)
4. RSBCL, Jaipur Rs. 84,850.03 (Sh. Sriram Jaiswal)
5. RSBCL, Jaipur Rs. 94,604.02 (Sh. Hari Narain Singh)
6. RSBCL, Jaipur Rs. 1,12,241.52 (Sh. Anil Srivastava)
7. Dist.Excise Officer, Jaipur Rs. 12,568.00 (Sh. Anand Kumar)
8. Raj.State G.S.M, Jaipur Rs. 6,662.00 (Sh. Anand Kumar) Rs. 4,92,071.92 In the order passed by the AO, it has been mentioned that it is not a mistake apparent from the record.
In this context, it may be mentioned that above TCS certificates have been issued mainly by the RSBCL, Jaipur in name of various persons as mentioned above. The assessee's contention is that the shop license of the liquor was issued by the excise department to above persons, hence the TCS has been deducted in their names. However, these persons are members of the firm in name of M/s Jai Ambey Wines where the sales have been accounted. So the credit of the TCS may be given to the appellant firm as these individual have not claimed the credit of the TCS. In this regard, it may be mentioned that as per provisions of section 206C (4), credit of the TCS is to be given to the person from where the amount has been collected and in respect of whom statement has been filed as per provisions of section 206C(5) of the IT Act. In the present case, the above TCS certificates are in name of above mentioned persons who are having their individual PAN numbers. Apparently the credit is to be given to the persons in whose names TCS certificates have been issued. Further, the assessee has relied upon the provision of section 199 r.w.r. 37BA. These provisions relate to tax deducted at sources (TDS) and are not relevant in respect of tax collected at source (TCS). Further the above issue is not a mistake apparent from the record as mentioned by the AO. In view of the above discussion, the assessee's appeal is dismissed.
3 ITA No. 676/JP/2015 M/s Jai Ambey Wines2.2 Similar facts pattern is noted in A.Y. 2012-13 wherein the contentions of the assessee were again rejected by the Ld. CIT(A) and the relevant observations are contained at para 4.3 of his order which is reproduced as under:
"I have gone through the statement of facts, grounds of appeal and written submissions carefully. It is seen from the detailed submission made by the appellant that the TCS was made in the names of partners of the appellant firm and not in the name of the appellant. The appellant has relied mainly on section 199 r.w. Rule 37BA.
It can be seen that both section 199 ad Rule 37BA speak about the tax deducted at source and not TCS. Further, the rule 37BA it is clearly mentioned that credit for the tax deducted at source shall be given to a person to whom payment has been made or credit has been given (deductee) on the basis of information relating to deduction of tax furnished by the deductor to the income tax authority or the person authorised by such authority. In the case under consideration, the deductees were partners of the appellant firm and the deductor has furnished information stating that tax has been collected at source in the names of partners of the appellant firm. As far as sub-rule (2) of Rule 37BA is concerned, the appellant has not fulfilled the conditions laid down in the proviso to sub-Rule (2). Therefore, no credit can be given to the appellant. Sub Rule (4) also states that credit for the tax deducted at sources shall be granted on the basis of information relating to deduction of tax furnished by the deductor to the income tax authority or the person authorised by such authority. As in the case under consideration, the deductor has informed that names of the person in respect of whom the tax has been collected at source are names of partners of the appellant firm, therefore, I am of the considered view that the AO was justified in not giving credit of TCS claimed by the assessee. The appellant has filed copy of the order of CIT(A), Ajmer dated 07.03.2012 but with due respect to my predecessor, for the reasons discussed above, I do not agree with his view of this issue. Other decisions relied upon by the appellant have been given on different set of facts and are not applicable to the case under consideration. Further, the claim of the appellant that all the income of partners of the firm has been include in the income of the appellant is also not fully verifiable from the documents filed by the appellant.4 ITA No. 676/JP/2015 M/s Jai Ambey Wines
Accordingly I am of the considered view that no credit for the TCS can be given to the appellant. Hence the ground of appeal of the appellant is dismissed."
2.3 During the course of hearing, the ld. AR submitted as under:
(1) The assessee is a partnership firm and is engaged in retail trading of Country Liquor, IMFL and Beer Shops at Jaipur & Ajmer districts. The licences were allotted in individual names of partners as per Policy of Excise Department government of Rajasthan. But due to economy reasons all the members joint by became Associations of Persons executed a Partnership deeds dated 22.05.2009 to form a firm to carry on the business (to run shops allotted individually in joint venture) named M/s Jai Ambey Wines.
(2) That all the purchases under each shop as per terms of licence were shown as purchases in name of the firm & accordingly sales was also recorded in firm's name. The ld. JCIT, Range-2 Ajmer has also accepted this fact and has made the assessment completed u/s 143(3) incorporating whole of such individual member's sales and purchases as that of the firm. The copy of audited accounts for the year are as enclosed with partner's copy of account duly confirmed.
(3) Thus when complete sales, purchases of all members/partners considered in hands of firm, than credit for TCS of all individual partners should also be granted in hand of the firm, since none of the partners have considered/taken credit in their personal hands of such TCS deducted.
(4) That the above view has been confirmed by Hon'ble High Court of Andhra Pradesh in case of CIT-I vs. Bhooratnam & Co. (2013) 216 Taxman 6/29 Taxman.com 275 (AP).5 ITA No. 676/JP/2015 M/s Jai Ambey Wines
(5) That the decision of Hon'ble Jodhpur ITAT Bench in the case of ACIT vs. M/s Krishanlal Meel & others in ITA No. 370, 401/Jodh/2015 decided on 04.09.2015 wherein identical issue has been decided by the Hon'ble Bench in favour of the assessee.
(6) That the decision of Hon'ble Jaipur ITAT Bench in the case of ITO vs. Harish Kumar Sachdeva, in ITA No. 416, 826/JP/2012 which was decided on 14.03.2016 wherein identical issue has been decided by the Hon'ble Bench in favour of the assessee.
2.4 The relevant finding of the Coordinate Bench in ACIT vs. Shri Krishanlal Meel & Party (supra) is reproduced as under:
"(8) We have considered the rival submissions, gone through the orders of the authorities below and carefully perused entire material placed on record.
In so far as the merit of case is concerned, the issue is squarely covered by the decision of the Hon'ble Andhra Pradesh High Court in the case of CIT vs. Bhooratnam & company reported at (2013) 262 CTR 405 (AP) wherein the Hon'ble High Court has held as under:
"Where income shown in the TDS certificate was offered to tax by the assessee then TDS credit is allowable on the basis of TDS mentioned in the TDS certificates irrespective of the fact that TDS certificate was not in assessee's name"
(9) The facts and circumstances in the instant case are exactly identical. Furthermore, the findings recorded by the ld. CIT(A) to the effect that the members of AOP has not claimed any TDS/TCS in the individual returns, therefore, the assessee AOP is entitled for credit of TCS/TDS in respect of income earned by the AOP. The findings recorded by the ld. CIT(A) has not been controverted by the ld. DR by bringing any cogent material on record. Accordingly we do not find any reason to interfere with the conclusion arrived at by the ld. CIT(A) in directing the AO to allow credit of TCS/TDS issued in the name of individual members in the hands of the assessee AOP after due verification and satisfaction. Facts and circumstances being pari materia similar in all the cases of all the assesses, following the reasons given hereinabove, we dismiss all the appeals of the Revenue."
6 ITA No. 676/JP/2015 M/s Jai Ambey Wines2.5 The ld. DR is heard who has supported the order of the AO as well as the ld. CIT(A) and stated that unlike provisions of section 199 r.w. Rule 37BA which are in respect of credit for tax deducted at sources (TDS), there are no specific provisions contained in the IT Act in respect of tax collected at source(TCS).
2.6 We have heard the rival contentions and perused the material available on record. In order to appreciate the arguments, it would be relevant to refer to the provisions of Section 190, Section 199, Section 206C and the Rule 37BA(2)(i) of Income tax Rules.
Section 190 reads as under:
"(1) Notwithstanding that the regular assessment in respect of any income is to be made in a later assessment year, the tax on such income shall be payable by deduction or collection at source or by advance payment or by payment under sub-section (1A) of section 192, as the case may be, in accordance with the provisions of this Chapter. (2) Nothing in this section shall prejudice the charge of tax on such income under the provisions of sub-section (1) of section 4."
Section 199 reads as under:
"(1) Any deduction made in accordance with the foregoing provisions of this Chapter and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made, or of the owner of the security, or of the depositor or of the owner of property or of the unit-holder, or of the shareholder, as the case may be.
(2) Any sum referred to in sub-section (1A) of section 192 and paid to the Central Government shall be treated as the tax paid on behalf of the person in respect of whose income such payment of tax has been made.
(3) The Board may, for the purposes of giving credit in respect of tax deducted or tax paid in terms of the provisions of this Chapter, make such rules as may be necessary, including the rules for the purposes of giving credit to a person other than those referred to in sub-section (1) and sub-section (2) and also the assessment year for which such credit may be given."
Section 206C reads as under:
"(1) Every person, being a seller shall, at the time of debiting of the amount payable by the buyer to the account of the buyer or at the time of receipt of such amount from the said buyer in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, collect from the buyer of any goods of the nature specified in column (2) of the Table 7 ITA No. 676/JP/2015 M/s Jai Ambey Wines below, a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax:
[TABLE Sl. No. Nature of goods Percentage (1) (2) (3)
(i) Alcoholic Liquor for human consumption One per cent
(ii) Tendu leaves Five per cent
(iii) Timber obtained under a forest lease Two and one-half per cent
(iv) Timber obtained by any mode other than under a forest lease Two and one-half per cent
(v) Any other forest produce not being timber or tendu leaves Two and one-half per cent
(vi) Scrap One per cent [(vii) Minerals, being coal or lignite or iron ore One per cent Provided that every person, being a seller shall at the time, during the period beginning on the 1st day of June, 2003 and ending on the day immediately preceding the date on which the Taxation Laws (Amendment) Act, 2003 comes into force, of debiting of the amount payable by the buyer to the account of the buyer or of receipt of such amount from the said buyer in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, collect from the buyer of any goods of the nature specified in column (2) of the Table as it stood immediately before the 1st day of June, 2003, a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax in accordance with the provisions of this section as they stood immediately before the 1st day of June, 2003.
(1A) Notwithstanding anything contained in sub-section (1), no collection of tax shall be made in the case of a buyer, who is resident in India, if such buyer furnishes to the person responsible for collecting tax, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the goods referred to in column (2) of the aforesaid Table are to be utilised for the purposes of manufacturing, processing or producing articles or things or for the purposes of generation of power and not for trading purposes.
(1B) The person responsible for collecting tax under this section shall deliver or cause to be delivered to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner one copy of the declaration referred to in sub-section (1A) on or before the seventh day of the month next following the month in which the declaration is furnished to him.
(2) The power to recover tax by collection under sub-section (1) or sub-section (1C) or sub-
section (1D)] shall be without prejudice to any other mode of recovery."
8 ITA No. 676/JP/2015 M/s Jai Ambey WinesRule 37BA(2)(i) of Income tax Rules as amended by the Income Tax (Eight amendment) Rules 2011 reads as under:
"Where under any provisions of the Act, the whole or any part of income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, credit for the whole or any part of tax deducted at source, as the case may, shall be given to the other person and not to the deductee.
Provided that the deductee files a declaration with the deductor and deductor reports the tax deduction in the name of the other person in the information relating to deduction referred to in sub-rule (1)."
2.7 The essence of the above stated provisions and corresponding rules is that the tax deducted at source (TDS) is nothing but tax, and credit for TDS should go to the person in whose hands the income is rightfully and finally assessed to tax in accordance with law irrespective of the person in whose hands the TDS has been deducted and TDS certificate has been issued at first place. If we look at the provisions of section 206C read with section 190 of the Act, the nature of tax collection at source (TCS) is exactly identical to TDS and it is in the nature of tax on income which has been collected at source in respect of specified business and the nature of goods as specified in section 206C of the Act. In light of above, the credit for TCS should be given to the assessee which is finally and lawfully assessed to tax in respect of the corresponding income on which TCS has been collected. The fact that there are no specific rules which have been provided in the Income tax Rules in respect of credit of TCS in such situations on the lines of Rule 37BA, in our view, doesn't disentitle the assessee to claim credit of TCS in whose hands the income is finally assessed to tax. The reason for the same is that the nature of TCS is nothing but tax which has been statutorily recognised in the Income tax Act, and the Rules are enabling and procedural in nature and absence thereof cannot result in denial of credit of TCS. This issue also find supports from the decision of the 9 ITA No. 676/JP/2015 M/s Jai Ambey Wines Coordinate Bench in case of ACIT, Circle-2, Udaipur vs. Shri Krishnalal Meel & party (supra).
2.8 In the instant case, the ld. AR has submitted that the income has been brought to tax in the hands of the assessee firm and accordingly the credit for TCS should be granted to the assessee firm. In this regard, we find that there is no findings of fact by the AO in this regard and in A.Y. 2012-13 the ld. CIT(A) has stated that "the claim of the appellant that all the income of partners of the firm has been include in the income of the appellant is also not fully verifiable from the documents filed by the appellant."
2.9 In light of above discussions, we set-aside the matter in both the years to the file of the AO with the directions to verify whether the corresponding income in respect of which TCS has been claimed by the assessee firm has been brought to tax in the hands of the asessee firm or not. Where after due examination and verification, the AO find that the corresponding income has been brought to tax in the hands of the assessee firm, the AO is directed to allow credit for TCS in the hands of the assessee firm.
2.10 We may add that in AY 2010-11, the appellant has taken ground in respect of non grant of TDS/TCS credit of Rs 11,31,416. However, there are no arguments made by the ld AR in respect of TDS during the course of hearing and the whole thrust of the arguments as noted above were towards non- grant of TCS credit. Further, it is noted that non-grant of TDS credit has not been pressed before the ld CIT(A) as well. In light of above, ground of appeal for AY 2010-11 so far as it relates to TDS credit is dismissed as non-pressed.
In the result the appeals filed by the assessee for AY 2010-11 is partly allowed for statistical purposes and for AY 2011-12, is allowed for statistical purposes.
10 ITA No. 676/JP/2015 M/s Jai Ambey Wines Order pronounced in the open court on 11/01/2017.
Sd/- Sd/-
(KUL BHARAT) (VIKRAM SINGH YADAV)
U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
Jaipur
Dated:- 11/01/2017
Pillai
vkns'k dh izfrfyfi vxzfs "kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- M/s Jai Ambey Wines, Ajmer
2. izR;FkhZ@ The Respondent- The ACIT, Circle-2, Ajmer
3. vk;dj vk;qDr@ CIT -Ajmer
4. vk;dj vk;qDr¼vihy½@The CIT(A)-Ajmer
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
6. xkMZ QkbZy@ Guard File (ITA No.676/JP/2015) vkns'kkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar.11