Income Tax Appellate Tribunal - Ahmedabad
Hitesh Madhukant Sevak, Ahmedabad vs Assessee on 21 July, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD '' C " BENCH - AHMEDABAD
Before Shri Rajpal Yadav, JM, & Shri Manish Borad, AM.
ITA No.1567/Ahd/2012
Asst. Year: 2008-09
Hitesh Madhukant Sevak, Vs. ITO, Ward 6-(4),
48/2/, Mohan Nagar Co-op. Ahmedabad.
Hsg. Society, Naroda,
Ahmedabad.
Appellant Respondent
PAN AJBPS 2404A
AND
ITA No.1712/Ahd/2012
Asst. Year: 2008-09
ITO, Ward6(4), Ahmedabad. Vs. Hitesh Madhukant Sevak,
48/2/, Mohan Nagar Co-
op. Hsg. Society, Naroda,
Ahmedabad.
Appellant Respondent
Appellant by Shri M. K. Patel, AR
Respondent by Shri Prasoon Kabra, Sr.DR
Date of hearing: 10/6/2016
Date of pronouncement: 21/07/2016
ORDER
PER Manish Borad, Accountant Member.
These cross appeals are directed against the order of ld. CT(A)-XI, Ahmedabad dated 2.5.2012 in appeal No.CIT(A)-
ITA No. 1567 & 1712/Ahd/2012 2Asst. Year 2008-09 XI/395/Wd-6(4)/11-12 passed against order u/s 143(3) r.w.s. 148 of the IT Act, 1961 (in short the Act) for Asst. Year 2008-09 on 27.12.2011 by ITO, Wd-6(4), Ahmedabad. Grounds of appeal raised by assessee & Revenue are as under :-
Grounds in ITA No.1567/Ahd/2012 (Assessee's appeal) :
1. The learned CIT(A) has grievously erred in law and on facts in partly confirming the addition on account of estimation of gross profit to the extent of Rs.1,54,937/- out of total addition of Rs.7,09,229/- made by the AO without proper consideration and appreciation of the facts of the case. In view of facts and submissions filed as well as legal position, the entire estimated addition on account of gross profit requires to be deleted.
2. The learned CIT(A) has further erred in estimating the addition of G.P. at 20% of alleged unverified purchases of Rs.7,74,687/- as against estimation of G.P. @ 20% of total turnover as made by the AO. In view of facts of the case and more particularly the nature of business of the appellant, the entire addition ought to have been deleted.
The appellant craves leave to add, amend, alter, modify or delete any of the above grounds as well as to submit additional grounds at the time of hearing of the appeal.
Grounds in ITA No.1712/Ahd/2012 (Revenue's appeal) :-
(I) The CIT(A) has erred in taw and on facts in accepting the explanation of the Assessee that the opening capital appearing in the balance sheet was brought forward from the closing balance appearing in the balance sheet for the immediately preceding F.Y, particularly when the Assessee had not maintained regular books of accounts for the preceding year and had merely submitted copies of unaudited P&L A/c and balance sheet.
(II) The CIT(A) has erred in law and on facts in holding that the book-
result of the Assessee were acceptable and the addition made on account of suppressed gross profit was not tenable.
ITA No. 1567 & 1712/Ahd/2012 3Asst. Year 2008-09 (III) The CIT(A) has erred in law and on facts in directing to allow credit for TDS to the Assessee ignoring the provisions of Rule 37BA(4) of the I T Rules, and also ignoring the fact that the Assessee had not filed a valid return of income.
(IV) On the facts and circumstances of the case, the Ld. Commissioner of Income tax (A) ought to have upheld the order of the Assessing Officer.
(V) It is, therefore, prayed that the order of the Ld. Commissioner of Income tax (A) may be set-aside and that of the Assessing Officer be restored.
2. Briefly stated facts of the case as culled out from the records are that the assessee is an individual running sole proprietary concern in the name of M/s Gayatry Caterers, engaged in providing catering services. Notice u/s 148 of the Act was issued on 21.10.2010 on the basis of information that TDS was deducted in on the contract payment of Rs.1,66,54,360/- for asst. year 2008-09 but no return of income was filed by the assessee. Assessee did not respond on few occasions against notice u/s 148 of the Act but finally furnished the return of income on 19/10/2011 declaring total income at Rs.10,21,170/- on which tax of Rs.2,78,275/- was determined and TDS of Rs.3,96,191/- was claimed. Case was discussed, necessary details were filed and assessment was completed at an assessed income of Rs.66,97,094/- after making following two additions :-
1.Addition u/s 69 on unexplained investment for not Rs.49,66,695/- accepting the opening balance of capital
2.Rejection of books of account u/s 154(3) of the Act Rs.7,09,229/-
and estimation of G.P. and making addition ITA No. 1567 & 1712/Ahd/2012 4 Asst. Year 2008-09 Further assessee's claim of credit of TDS of Rs.3,96,191/- was denied by ld. Assessing Officer observing that the same cannot be allowed as per Rule 41 of the IT Rules as it was not a claim with valid return of income filed u/s 139 of the Act.
3. Aggrieved, assessee went in appeal before ld. CIT(A) wherein the appeal was partly allowed and now both the assessee and the Revenue are in appeal before the Tribunal.
4. First we take ground nos. 1 & 2 of assessee's appeal in ITA No.1567/Ahd/2012 and ground no.(II) of Revenue's appeal in ITA No.1712/Ahd/2012 which are as under :-
Assessee's grounds -
1. The learned CIT(A) has grievously erred in law and on facts in partly confirming the addition on account of estimation of gross profit to the extent of Rs.1,54,937/- out of total addition of Rs.7,09,229/- made by the AO without proper consideration and appreciation of the facts of the case. In view of facts and submissions filed as well as legal position, the entire estimated addition on account of gross profit requires to be deleted.
2. The learned CIT(A) has further erred in estimating the addition of G.P. at 20% of alleged unverified purchases of Rs.7,74,687/- as against estimation of G.P. @ 20% of total turnover as made by the AO. In view of facts of the case and more particularly the nature of business of the appellant, the entire addition ought to have been deleted.
The appellant craves leave to add, amend, alter, modify or delete any of the above grounds as well as to submit additional grounds at the time of hearing of the appeal.
ITA No. 1567 & 1712/Ahd/2012 5Asst. Year 2008-09 Revenue's ground -
(II) The CIT(A) has erred in law and on facts in holding that the book-
result of the Assessee were acceptable and the addition made on account of suppressed gross profit was not tenable.
5. As two grounds raised by assessee are inter-connected and ground no.(II) of Revenue's appeal relate to the same issue, therefore, they are dealt together. Ld. AR submitted that during the course of assessment proceedings it was observed by ld. Assessing Officer that no proper supporting was available with the assessee in relation to expenditure of Rs.7,74,687/- relating to purchase of milk, curd, vegetables, fruits, etc. purchased in cash and similarly, expenditure on consumption of cooking gas was not verifiable. Ld. Assessing Officer also observed that assessee's main client was Cadila Laboratories Ltd. but the assessee failed to furnish a copy of agreement entered into by him with the said client. Due to these reasons book results of the assessee were rejected u/s 145(3) of the Act and gross profit was estimated by applying 20% at the place of 15.82% declared by assessee on the gross turnover of Rs.1,69,62,197/-. Accordingly addition of Rs.7,09,229/- was made on account of suppression of G.P.
6. When the matter travelled before the ld. CIT(A) the impugned addition on account of suppression of GP was deleted on the basis of observation that there was no substantial decrease in GP vis-à-vis average of last three years GP calculated at 15.82%. Further ld.CIT(A) also observed that estimation of 20% GP by Assessing Officer was without any comparable case and prescribed procedure.
ITA No. 1567 & 1712/Ahd/2012 6Asst. Year 2008-09 However, in relation to the expenditure of Rs.7,74,687/- incurred by assessee on various consumable items namely milk, curd, vegetables, fruits, cooking gas etc. which were supported by merely self-made vouchers, 20% disallowance of Rs.7,74,687/- was sustained and accordingly out of addition of Rs.7,09,229/- a relief of Rs.5,54,292/- was given by ld. CIT(A) and balance amount of Rs.1,54,937/- was confirmed. Ld. AR further submitted that assessee's books of accounts are audited and there is no observation made by the auditors against the assessee in regard to the expenditure of Rs.7,74,687/- and further in catering business such type of expenses have to be incurred in cash and proper bills/supporting are not possible to be gathered from suppliers of milk, curd, vegetables, butter etc. as there is no fixed supplying for the same. Therefore, ld. CIT(A) erred in sustaining the disallowance of Rs.1,54,937/-.
7. On the other hand, ld. DR supported the order of Assessing Officer.
8. We have heard the rival contentions and perused the material on record. We find that assessee has raised ground nos. 1 & 2 but the sole grievance is addition of Rs.1,54,937/- sustained by ld. CIT(A) by disallowing 20% unverifiable purchase of Rs.7,74,687/- whereas Revenue is in appeal against the order of ld. CIT(A) holding that the book results of the assessee were acceptable and addition on account of gross profit addition made by the Assessing Officer is not tenable.
ITA No. 1567 & 1712/Ahd/2012 7Asst. Year 2008-09
9. We observe that return of income was filed by assessee on 19/10/2011 in compliance to notice u/s 148 of the Act dated 21.10.2010 because even when TDS was deducted on contract payment of Rs.1,66,54,360/-, assessee did not file return of income in the regular course u/s 139 of the Act. Along with return of income audit report u/s 44AB of the Act was also attached and TDS certificate from Gujarat State Petroleum Corporation, Cadila Health Care Ltd. and Erhardt + Leimer (India) Pvt. Ltd., copy of agreement with Cadila Health Care Ltd. and copy of bank statement, were filed before ld. Assessing Officer. We further observe that no major defect was pointed out by ld. Assessing Officer except for the unverifiable purchases of Rs.7,74,687/- for purchase of material like -milk, curd, vegetables, cooking gas etc. Apart from this observation all other book results except some part of opening capital at Rs.49,66,695/- as furnished in the audited financial statement were accepted by Assessing Officer. Issue regarding non-acceptance of the opening capital of Rs.49,66,695/- will be dealt with other ground of the appeal raised by Revenue.
9.1 We further observe that average Gross Profit (GP) rate of assessee for last three financial years is 15.28% (12.95% + 16.69% + 16.20% ÷ 3), GP declared by the assessee for the year under appeal is 15.82% which is better in comparison to average GP rate. Further as regards unverifiable purchases of Rs.7,74,687/- we find force in the submission of ld. AR that these purchases relate to buying of milk, curd, vegetables fruits, cooking gas and other day to day ITA No. 1567 & 1712/Ahd/2012 8 Asst. Year 2008-09 expenditure needed in the course of running catering business and such purchases are normally made from different suppliers on the basis of availability and demand of goods and such suppliers are normally hawkers or unstable shop keepers which keep moving from place to place and it is not practicable to arrange for proper supporting or bills for such purchases. We also observe that only reason on the basis of which ld. Assessing Officer went ahead to reject books of accounts u/s 145(3) of the Act is unverifiable purchases and apart from this no other observation or defects in the books of accounts was pointed by ld. Assessing Officer. Therefore, in the given circumstances, where the assessee has shown better GP rate and no major defect has been pointed in the books of account, ld. Assessing Officer erred in rejecting books of account and therefore, no addition is sustainable by applying estimated GP rate @ 20%. We find no reason to interfere with the finding with regard to the issue of deleting the addition on account of GP rate. However, with regard to the addition of Rs.1,54,937/- on account of 20% disallowance on unverifiable purchases of Rs.7,74,687/- we find that all these purchases are relating to perishable items namely, milk, fruits, vegetables, curd etc. and cooking gas which are to be sought after by the assessee from different suppliers and there is practical difficulty of gathering supporting documents and, therefore, in the given circumstances when the assessee has shown better GP rate and financial statements are audited u/s 44AB of the Act and the disallowance made by lower authorities is fairly on an estimate basis, we find no reason for such disallowance and, therefore, we delete the ITA No. 1567 & 1712/Ahd/2012 9 Asst. Year 2008-09 same. Accordingly, ground no.1 & 2 of assessee's appeal are allowed and ground no.2 of Revenue's appeal is dismissed.
10. Now we take up remaining grounds of Revenue's appeal in ITA No.1712/Ahd/2012.
11. Ground No.(I) of Revenue -
The CIT(A) has erred in taw and on facts in accepting the explanation of the Assessee that the opening capital appearing in the balance sheet was brought forward from the closing balance appearing in the balance sheet for the immediately preceding F.Y, particularly when the Assessee had not maintained regular books of accounts for the preceding year and had merely submitted copies of unaudited P&L A/c and balance sheet.
12. Ld. DR supported the order of ld. Assessing Officer.
13. On the other hand, ld. AR submitted that during the course of assessment proceedings, audited financial statements were submitted before ld. Assessing Officer and while examining the same, ld. Assessing Officer observed that brought forward opening balance of capital account of proprietary concern was shown at Rs.60,85,758. Ld. Assessing Officer also observed that assessee has not filed return of income as well as financial statement for Asst. Year 2006-07 and 2007-08 and, therefore, accepted the opening w.d.v. of assets motor car at Rs.3,63,313/- and opening bank balance of Rs.7,55,750/- and treated the remaining amount of Rs.49,66,695/- (Rs.60,85,758 - Rs.36,313 - Rs.7,55,750) as unexplained investment u/s 69 of the Act and added it to the income of assessee. Ld. AR further submitted that assessee is regularly getting its account ITA No. 1567 & 1712/Ahd/2012 10 Asst. Year 2008-09 audited and the opening balance brought forward was from previous year audited balance sheet and also addition u/s 69 of the Act is attracted for unexplained investment not recorded in books of a/c. during year which was not the case before ld. Assessing Officer because addition was made on account of opening capital which was duly recorded in the books of account and, therefore, addition made was bad in law and ld. CIT(A) has rightly deleted the same.
14. We have heard the rival contentions and perused the material on record. Through this ground Revenue has challenged the action of ld. CIT(A) deleting the addition made u/s 69 of the Act for unexplained investment at Rs.49,66,695/-. We find that ld. CIT(A) has deleted the impugned addition of Rs.49,66,695/- by observing as under :-
3.2 I have carefully considered rival submissions. 1 have also perused various evidences furnished by the appellant during appellate proceedings and the case laws relied upon by the appellant. It is seen that the A.O. had made .an addition of Rs.49,66,695/- against opening capital balance. It is further noticed that in the A.Y. 2008-09 appellant has shown opening capital of Rs.60,85,758/-. The A.O. had given credit of opening bank balance of Rs.7,55,750/- and w.d.v. of motor car of Rs.3,63,313/- against this opening capital and the resultant figure of Rs.49,66,695/- has been added by the A.O. u/s.69 of I.T. Act.
3.3 Taking entirety of facts in view, I am inclined to agree with the contentions of the Id.A.R. for the following reasons. The A.O. had made impugned addition u/s.69 of IT. Act, it will be pertinent to discuss provision of this section first. The value of unexplained investment made by the assessee in F.Y. immediately preceding A.Y. can be charged to tax u/s.69 of I.T. Act only if following conditions are fulfilled.
(a) Assessee might have made investments in the F.Y. immediately preceding A.Y. ITA No. 1567 & 1712/Ahd/2012 11 Asst. Year 2008-09
(b) The investments made are not recorded in the books, if any, maintained by the assessee for any source of income.
(c) Assessee place no explanation about the nature of source of investments or explanation offered by him is not, in the opinion of the A.O. satisfactory.
The fulfillment or satisfaction of these conditions in the case of appellant is discussed in the following paras.
(i) it is seen that A.O. had made addition against opening capital of the appellant. This makes it very clear that the A.O. has not detected any investment made by the appellant during the year under consideration. Accordingly, the first eligibility criterion of section 69 as mentioned above is not fulfilled.
(ii) It is also a matter of fact that the appellant is maintaining the books of accounts and opening capital amount of Rs.60,85,758/- has been recorded by the appellant in his books of accounts. In fact the figure of opening capital account of Rs.60,85,785/- has been taken by the A.O. from the books of accounts and balance sheet of the appellant. It is clearly mentioned by the A.O. in para 5 of the assessment order that books of accounts and bills and vouchers were furnished and the same were verified on test check basis. These books of accounts were duly audited and the appellant has drawn a balance sheet and profit and loss account based ofPsthese books of accounts. The balance sheet and profit and loss account was filed by the appellant alongwith income tax return. The impugned figure of Rs.60,85,7587- which represents opening capital balance is duly recorded in the books of accounts as well as balance sheet of the appellant. In view of these facts, it can easily be said that opening capital balance is duly recorded in the books of accounts' and accordingly as per second eligibility condition of section 69, addition against opening capital balance cannot be made u/s.69.
Since basic eligible criterions as laid down u/s.69 are not fulfilled in this case, accordingly, in my considered view the addition of Rs.49,66,695/- made by the A.O. u/s.69 is not tenable.
3.4 In the assessment order the A.O. has taken cognizance of return filed by the appellant for A.Y. 2005-06. The appellant is having audited balance sheet for this year. The A.O. was of the opinion that in the intervening period i.e. A.Y. 2006-07 and 2007-08 the appellant has not furnished its return of income and accordingly opening balance shown by the appellant in balance sheet is not verifiable. In view of these facts, the A.O. made the impugned addition. However, it is seen that for the A.Y. 2006-07 and 2007-08, the A.O. had issued notice u/s.148 and ITA No. 1567 & 1712/Ahd/2012 12 Asst. Year 2008-09 the appellant had furnished income-tax returns for these years along-with audited balance sheets. Perusal of balance sheet for the A.Y. 2007-08 reveals that closing balance in capital account of Shri Hitesh Madhukant Sevak is _Rs.60j5.758/-, which is opening balance in capital account for the A.Y. 2008-09. If the A.O. doubts the accretion in the capital account of the appellant for A.Y. 2006-07 and 2007-08, it will be proper to investigate this issue in the assessment proceedings of these years, which are open before the A.O. are opened up for scrutiny. In my considered view, discrepancy, if any, found in the capital account accretion in A.Yrs. 2006-07 and 2007-08, it will be appropriate to make these additions in that year and not in the current A.Y. i.e. A.Y. 2008-09.
3.5 It is further seen that A.O. had given credit of opening bank balance of Rs.7,55,750/- and w.d.v. of motor car of Rs.3,63,313/- against opening capital balance of the appellant. I am not in agreement with this working also. It is seen that audited balance sheet for the A.Y. 2005-06 was available before the A.O. during the assessment proceedings. In this balance sheet, appellant has declared balance in capital account of Rs.17,62,694/- and the fixed assets of Rs.9,01,173/-. There is nothing on record to disbelieve this balance sheet. In view of these facts, I am of the considered, view that A.Q. should have given benefit of capital account of Rs.17I62,694/-and w.d.v. of fixed assets of Rs.9,01,173/-.
3.6 The A.O. had also made reference to debtors of Rs.44,05,856/-. This figure is also disclosed in the balance sheet of the current year. This is the opening balance under the head sundry debtors for the current A.Y. This corresponds to closing balance of sundry debtors of Rs.44,05,856/- as on 31-03-2007. This figure is also declared in in the balance sheet for A.Y. 2007-08. Since sundry debtors also corresponds to earlier year, accordingly, in my considered view, no adverse inference can be drawn in the current A.Y. 3.7 1 further place reliance on the case of Mohanlal Pukhraj v/s. DCIT (2005) 1(11) 1 TCL 160 (Ahd.Tri.) wherein it is held that income during various years cannot be taxed in one year brushing aside of the evidences to be verified by the assessee. In the case of ACIT v/s. Smt.Gangadevi Sanganaria L/H of late Matadin Sanganaria (2005) 96 TTJ 351 (Cal.), it was held that there was no reason to disbelief accumulation of capital in the hands of the assessee especially in view of the fact that appellant has earned income in the earlier years.
3.8 It is also a matter of fact that appellant has shown capital balance as on 31- 03-2005 at Rs.17,62,694/-. The appellant has further earned profits of Rs.9.93 lacs and Rs.14.51 lacs in the A.Y. 2006-07 and 2007-08 respectively. These facts reveals that appellant has accumulated profits year after year and that was sufficient reason of having an opening capital balance of Rs.60,85,758/- in the A.Y. 2008-09. The A.O. has not considered these materials facts before making the addition.
ITA No. 1567 & 1712/Ahd/2012 13Asst. Year 2008-09 3.9 In view of above facts, I am of the firm view that addition of Rs.49,66,695/- is not tenable and accordingly the same is deleted. This ground of appeal is allowed.
15. We observe that ld. Assessing Officer while examining the audited financial statement accepted the opening capital balance only to the extent of w.d.v. of motor car at Rs.3,63,313/- and opening bank balance of Rs.7,55,750/- and treated the remaining amount of opening capital of Rs.49,66,695/- as unexplained investment. We further observe that provisions of section 69 of the Act read as under:-
69. Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year. -
16. By applying the facts of the case to the provisions of section 69 of the Act, we find that provisions of section 69 of the Act are invoked where in the financial year immediately preceding the asst. year if the assessee makes any investment which are not recorded in the books of account then such value of investment may be deemed to be the income of the assessee which is not the case of assessee because ld. Assessing Officer has referred to the opening capital balance which takes its source from previous financial year and ld. Assessing Officer has taken the basis of opening capital of Rs.60,85,758/- from ITA No. 1567 & 1712/Ahd/2012 14 Asst. Year 2008-09 the audited financial statement of assessee shown at Schedule-A of the audited balance sheet and has partly considered the opening capital explained to the extent of opening w. d. v. of motor car of Rs.3,63,313/- and opening bank balance of Rs.7,55,750/-. There is no mention of any other investment which is not recorded in the books of account.
17. We further observe that assessment u/s 143(3) r.w.s. 148 of the Act in the case of assessee for Asst. Year 2006-07 & 2007-08 were completed on 28.2.2013 which was after the assessment under section 143(3) r. w. s. 148 of the Act for Asst. Year 2008-09 completed on 27.12.2011. From going through the assessment order for asst. year 2007-08 we find that ld. Assessing Officer has accepted the audited financial statement as well as the opening and closing balance of capital account and the only addition made for asst. year 2007-08 relates to unverifiable purchases. Had there been any unexplained investment in the previous year i.e. asst. year 2007-08 then ld. Assessing Officer might have extracted such information and had made addition thereof.
18. We are, therefore, of the view that as the assessee's financial statements have been accepted by the Revenue for Asst. Year 2007- 08 and addition made during the year under appeal emanates out of the opening balance of the capital account only and there is no evidence of any unrecorded investment in the case of assessee and, therefore, no addition was called for u/s 69 of the Act of Rs.49,66,695/-. Ld. CIT(A) has rightly deleted the addition. No ITA No. 1567 & 1712/Ahd/2012 15 Asst. Year 2008-09 interference is called for in the order of ld. CIT(A). This ground of Revenue is dismissed.
19. Now we take up ground no.(III) of Revenue's appeal which reads as under :-
(III) The CIT(A) has erred in law and on facts in directing to allow credit for TDS to the Assessee ignoring the provisions of Rule 37BA(4) of the I T Rules, and also ignoring the fact that the Assessee had not filed a valid return of income.
20. Ld. DR supported the order of Assessing Officer.
21. On the other hand, ld. AR submitted that TDS of Rs. 3,96,191/- was deducted on the contract receipts received by the assessee during the year and the same were claimed against tax liabilities for the year but was not allowed by ld. Assessing Officer by following the provisions of Rule 41 of IT Rules with the observation that as the assessee has not filed valid return u/s 139 of the Act. Ld. AR further submitted that when the gross receipts of the assessee has been accepted, all details regarding contract agreements for catering services of various companies were placed on record, then assessee should have been allowed TDS credit of Rs.3,96,191/-.
22. We have heard the rival contentions and perused the material on record. Revenue has challenged the action of ld. CIT(A) for allowing credit of TDS of Rs.3,96,191/-. We find that ld. CIT(A) has allowed the ground of assessee's appeal and has directed the Assessing Officer to give credit of TDS of Rs.3,96,191 vide para 5.3 of his appellate order.
ITA No. 1567 & 1712/Ahd/2012 16Asst. Year 2008-09
23. Before going further let us first go through the provisions of Rule 37BA and Rule 41 of IT Rules which are as follows :-
Rule -37BA. (1) Credit for tax deducted at source and paid to the Central Government in accordance with the provisions of Chapter XVII, shall be given to the person to whom payment has been made or credit has been given (hereinafter referred to as 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. (2) [(i) Where under any provisions of the Act, the whole or any part of the 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 the tax deducted at source, as the case may be, shall be given to the other person and not to the deductee :
Provided that the deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of the other person in the information relating to deduction of tax referred to in sub-rule (1).]
(ii) The declaration filed by the deductee under clause (i) shall contain the name, address, permanent account number of the person to whom credit is to be given, payment or credit in relation to which credit is to be given and reasons for giving credit to such person.
(iii) The deductor shall issue the certificate for deduction of tax at source in the name of the person in whose name credit is shown in the information relating to deduction of tax referred to in sub-rule (1) and shall keep the declaration in his safe custody. (3) (i) Credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable.
(ii) Where tax has been deducted at source and paid to the Central Government and the income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax.
(4) Credit for tax deducted at source and paid to the account of the Central Government shall be granted on the basis of--
(i) the information relating to deduction of tax furnished by the deductor to the income-tax authority or the person authorised by such authority; and
(ii) the information in the return of income in respect of the claim for the credit, subject to verification in accordance with the risk management strategy formulated by the Board from time to time.] Rule -41. (1) A claim for refund under Chapter XIX shall be made in Form No. 30. (2) The claim under sub-rule (1) shall be accompanied by a return in the form prescribed under section 139 unless the claimant has already made such a return to the 61[Assessing Officer].ITA No. 1567 & 1712/Ahd/2012 17
Asst. Year 2008-09 (3) Where any part of the total income of a person making a claim for refund of tax consists of dividends or any other income from which tax has been deducted under the provisions of sections 192 to 194 [, section 194A and section 195], the claim shall be accompanied by the certificates prescribed under section 203. (4) The claim under sub-rule (1) may be presented by the claimant in person or through a duly authorised agent or may be sent by post.
24. Also the provisions of section 148 of the Act will be relevant to be discussed here which are -
[Issue of notice where income has escaped assessment.
148. [(1)] Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, [* * *] as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be pres- cribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 :] [Provided that in a case--
(a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and
(b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to sub-section (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice:
Provided further that in a case--
(a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and
(b) subsequently a notice has been served under clause (ii) of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub-
section (2) of section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice.] ITA No. 1567 & 1712/Ahd/2012 18 Asst. Year 2008-09 [Explanation.--For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section.] [(2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so.]
25. From going through the above provisions, we observe that when the assessee receives notice u/s 148 and is required to file return of income then as per the provisions of section 148 such return is treated at par as if same were required to be furnished u/s 139. Further when we move to the Rule 41 sub-rule(2) provides that the claim of TDS shall be accompanied by return in the form prescribed u/s 139 of the Act. Moving further when we go through the Rule 37BA(4) we find that credit for tax deducted at source and paid to the account of Central Government shall be granted on the basis of information relating to deduction of tax furnished by the deductor to the income-tax authority and the information provided in the return of income. Now when we link up the provisions of section 148 of the Act with Rule 41(2) and Rule 37BA(4) of IT Rules, we find that assessee filed return of income in the prescribed form in compliance with notice u/s 148 of the Act and provided all necessary information relating to TDS to the assessing authority and thereby satisfying all the conditions which are required for claiming refund. We are, therefore, of the view that in the give facts of the case when assessee's revenue has not been questioned and all necessary information in the form of return of income and TDS certificate were before the ld. Assessing Officer then the TDS credit of Rs.3,96,191 ought to have been allowed. Therefore, we find no reason to interfere with the order ITA No. 1567 & 1712/Ahd/2012 19 Asst. Year 2008-09 of ld. CIT(A) and uphold the same. This ground of Revenue is dismissed.
26. Other ground nos. (IV) & (V) of Revenue's appeal are general nature, which need no adjudication.
27. In the result, appeal of assessee is allowed and that of the Revenue is dismissed.
Order pronounced in the open Court on 21st July, 2016 Sd/- sd/-
(Rajpal Yadav) (Manish Borad)
Judicial Member Accountant Member
Dated 21/7/2016
Mahata/-
Copy of the order forwarded to:
1. The Appellant
2. The Respondent
3. The CIT concerned
4. The CIT(A) concerned
5. The DR, ITAT, Ahmedabad
6. Guard File
BY ORDER
Asst. Registrar, ITAT, Ahmedabad
ITA No. 1567 & 1712/Ahd/2012 20
Asst. Year 2008-09
1. Date of dictation: 18/07/2016
2. Date on which the typed draft is placed before the Dictating Member: 20/07/2016 other Member:
3. Date on which approved draft comes to the Sr. P. S./P.S.:
4. Date on which the fair order is placed before the Dictating Member for pronouncement: __________
5. Date on which the fair order comes back to the Sr. P.S./P.S.:
6. Date on which the file goes to the Bench Clerk: 21/7/2016
7. Date on which the file goes to the Head Clerk:
8. The date on which the file goes to the Assistant Registrar for signature on the order:
9. Date of Despatch of the Order: