Income Tax Appellate Tribunal - Rajkot
Assistant Commissioner Of Income Tax, ... vs Green Gold Timber Pvt. Ltd.,, ... on 20 December, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL,
RAJKOT BENCH, RAJKOT
[CONDUCTED THROUGH E-COURT AT AHMEDABAD]
BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
AND SHRI S.S. GODARA, JUDICIAL MEMBER
आयकर अपील सं./ ITA Nos. 513 & 515/Rjt/2012
Assessment Year : 2006-07 & 2007-08 respectively
ACIT, M/s. Green Gold Timber
TDS Circle, Vs Pvt Ltd,
Rajkot Plot No.187, N.H. 18A,
Gandhidham
PAN : AAACG 7578 Q
अपीलाथ / (Appellant) यथ / (Respondent)
Revenue by : Shri C.S. Anjaria, DR
Assessee by : Shri Vimal Desai, CA
सुनवाई क तार ख/ Date of Hearing : 21/11/2016
घोषणा क तार ख / Date of Pronouncement: 20/12/2016
आदे श/O RDER
PER S.S. GODARA, JUDICIAL MEMBER :-
These two Revenue's appeals for assessment years 2006-07 and 2007-08, arise against CIT(A)-II, Rajkot's common order dated 27.06.2012 passed in cases No.CIT(A)-II/Rjt/15 and 17/11-12, in proceedings u/s 206C(6A) and (7) of the Income-tax Act, 1961 (in short the 'Act').
2. We notice at the outset that Revenue's identical substantive ground involving common pleadings reads as under:-
The ld.CIT(A) has erred in law as well as on facts of the case in deleting the order passed u/s 206C(6) of the I.T. Act of AY 2006-07 is Rs.76,19,752/- (u/s 206C(6) of Rs.3,39,226/-, u/s 206C(7) of Rs.2,44,242/-, u/s 206C(6)-27C of Rs.40,90,863/- & u/s 206C(7)-27C of Rs.29,45,421/-) and for AY 2007-08 is Rs.60,88,369/- (u/s 206C(6) ITA Nos. 513 & 515/Rjt/2012 ACIT vs. Green Gold Timber Pvt Ltd AYs 2006-07 & 2007-08 2 of Rs.20,26,756/-, u/s 206C(7) of Rs.12,16,051/-, u/s 206C(6)-27C of Rs.17,78,479/- & u/s 206C(7)-27C of Rs.10,76,087/-) by the A.O.
3. We come to relevant facts now in former assessment year 2006-
07. This assessee is a company engaged in trading and sawing of timber logs. The department carried out a survey in its case on 14.03.2007. It would find the assessee not to have properly collected tax at source from its timber buyers. The Assessing Officer thereafter completed the impugned "TCS" assessment making the two demands of Rs.76,19,752/- and Rs.60,88,369/-; respectively as pleaded in above extracted ground.
4. The CIT(A) reverses Assessing Officer's action after obtaining Assessing Officer's remand report as follows:-
"5. I have duly considered the assessment order alongwith the remand report of the A.O. and submissions of the appellant. It is observed that in the remand proceedings, the appellant produced declarations in form No.27C before the A.O. which is a fact evident from the operative part of the remand report as reproduced above. There are no adverse findings against the appellant in remand report. The appellant has reconciled its sales as per audited accounts and TCS in the following manner.
Particulars FY 2005-06 FY 2006-07
Sales as per audited accounts 24,40,34,969 29,26,57,991
Add : Sales return, taxes and other 70,09,854 2,03,28,843
expenses
Gross Sales 25,10,44,823 31,29,86,834
Less: Sales on which declaration in form
No.27C collected:-
High seas sales
Stock transfer & sales against F form 1,14,59,418 4,75,36,931 Other sales (including stock - 3,57,08,016 transfer in FY 2005-06 16,83,69,070 14,56,91,542 7,12,16,335 8,40,50,345 ITA Nos. 513 & 515/Rjt/2012 ACIT vs. Green Gold Timber Pvt Ltd AYs 2006-07 & 2007-08 3 Less: Sales on which TCS collected and 6,91,95,034 8,20,87,190 deposited Less: Scrap sales on which TCS collected and deposited Less: Scrap sales not liable for TCS being 15,48,194 6,58,886 retail sales for personal - 3,53,056 consumption Difference .... 4,73,107 9,51,213 Note :-
The difference is on account of value difference between us and the parties which are treated as discount, rebate and settlement in our books. For example, if we issue a bill of Rs. 100/- to party and the party deducts Rs. 2/-on account of quality, then they give us declaration in form 27C for Rs. 98/-and we show Rs. 2/- as discount, rebate and settlement in our books. The figure of discount, rebate and settlement was Rs. 5,39,507/- for F.Y. 2005-06 & Rs. 13,65,304/- for F.Y. 2006-07 as per audited accounts which includes the above difference.
As far as filing of declarations is concerned, it is observed that the figures as per the A.O. and the figures as per the appellant are broadly matching. In fact, the figures as per A.O. are more than the appellant which clearly indicate that the declarations of requisite amount have been received by the appellant to discharge him from the liability of TCS. There is no adverse finding of the A.O. in respect of this and hence the submissions of the appellant have to be accepted. It is also found to be acceptable that once the declarations are received by the payer from the payee, the liability of TDS/TCS is not there and filing is an act subsequent to it which does not affect the sanctity of such declarations. The various ITAT decisions relied upon by the appellant also explain this principle in a convincing manner. Even otherwise, the issue of filing is not much relevant as the appellant, during the course of remand proceedings, has filed such declarations before the CIT and submitted a proof thereof before the A.O. and thus completed the formality of filing and proof thereof also. The appellant has also submitted confirmations of few of the buyers to the effect that they had submitted the declaration to the appellant in respect of their purchase from the appellant. In view of this, no adverse inference can be drawn on the ground of filing of declarations when the receipt and ITA Nos. 513 & 515/Rjt/2012 ACIT vs. Green Gold Timber Pvt Ltd AYs 2006-07 & 2007-08 4 genuineness of declarations are established and filing has no real bearing in the matter of determination of liability. More so, when the A.O. has also not found anything adverse in his remand report.
In respect of retail sales for personal consumption of Rs. 3,53,056/-, the appellant produced copy of bills before me as well as the A.O. from which it was evident that the wood was sold as firewood and the individual amount of the bills was also very low. The submissions that the same were for personal consumption and hence not liable for TCS in view of definition of buyer in section 206C in which person purchasing for personal consumption is excluded are convincing and hence accepted.
On the remaining amount, the appellant has paid TCS and proofs of payment have been furnished. Therefore, there cannot be any dispute regarding this. The net difference is of very small amount and for that the appellant has given a plausible reason by way of a note which is verifiable from the audited accounts. Thus, the appellant has been able to establish the position of TCS in respect of its entire sales with supporting evidences. The same has been verified by the A.O. and no infirmity has been found. Under the circumstances, the demand cannot be sustained. I therefore direct the A.O. to delete the entire demand for both the years. Grounds No. 2 to 5 are thus allowed. Since I have decided the issue on merits, the alternative technical arguments of the appellant based on the Apex Court judgment in case of Hindustan Coca Cola Pvt. Ltd. and Delhi ITAT decision in case of Catholic Relief Services do not require any separate adjudication.
6. In the result, the appeals are allowed."
5. We have heard both the parties. The Departmental Representative strongly seeks to revive the above impugned "TCS" demands in the two assessment years in question. There is hardly any dispute by now that the instant case is not that of non-collection of TCS but that of improper collection. The assessee has not only filed its all requisite details of TCS collected from its timber buyers, but also it has given all cogent reasons to have sold the timber in question after ITA Nos. 513 & 515/Rjt/2012 ACIT vs. Green Gold Timber Pvt Ltd AYs 2006-07 & 2007-08 5 various discounts, rebates and settlements. We afforded ample opportunity to the Revenue to quote any specific material in the case file for the purpose of rebutting the above stated factual findings. There is no such material in all of assessee's paper-book which could pin-point any irregularity or infirmity in the above extracted lower appellate findings. It has further come on record that the assessee had collected Form No.27C in support of its TCS collection. The CIT(A) sought a remand report thereupon. The Assessing Officer did not comment any adverse material in his remand report dated 08.06.2012 forming part of the paper-book at pages 81 to 91. We thus uphold CIT(A)'s common order under challenge in both the appeals.
6. These two Revenue's appeals are accordingly dismissed.
Order pronounced in the Court on 20th December, 2016 at Ahmedabad.
Sd/- Sd/-
(N.K. BILLAIYA) (S.S. GODARA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 20/12/2016
*Bt
आदे श क त ल प अ े षत/Copyof the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबं धत आयकर आय!
ु त / Concerned CIT
4. आयकर आय!
ु त(अपील) / The CIT(A)
5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण/ DR, ITAT, Rajkot
6. गाड& फाईल / Guard file.
आदे शानुसार / BY ORDER, TRUE COPY उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील"य अ#धकरण,/ ITAT, Rajkot