TaxTMI 
TaxTMI 
2017 (12) TMI 122
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....escribed under section 139 of the I.T. Act. The A.O. recorded reasons under section 147 of the I.T. Act on 2nd November, 2012 and notice under section 148 was issued to the assessee-firm. In response to notice under section 148, assessee filed return of income on 11th March, 2013 declaring total income at Rs. 2,15,986. The case was selected for scrutiny and A.O. issued questionnaire. The assessee furnished written reply. The A.O. found that assessee is deriving income from contractor-ship business. Various details as called for were filed. Books of account and bills/ vouchers were produced and test-checked by the A.O. The A.O. after disallowing certain expenses computed the income at Rs. 3,66,860 vide order dated 21st February, 2014 under section 147/143(3) of the I.T. Act. 3.1. The Ld. Pr. CIT, Rohtak however, was not satisfied with the re-assessment order and issued show cause notice under section 263 of the I.T. Act, dated 28th January, 2016, copy of which is filed at page-47 of the paper book. The Ld. Pr. CIT, Rohtak on perusal of the record found that assessee is being assessed to tax since 2001- 2002 onwards in the status of Individual as well as Firm, having PAN AJYPK7569F ....
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....laim of assessee. The Ld. Pr. CIT found that the decision of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd., 243 ITR 83 is distinguishable on facts. The Ld. Pr. CIT also found that in assessment year under appeal, assessee has disclosed net profit of Rs. 2,15,986 but in subsequent year, the turnover has increased substantially but proper profit has not been shown. The Ld. Pr. CIT on perusal of 26AS also found that Shri Dayanand-Individual is having PAN AAGPN3895C and was having interest income from SBI amounting to Rs. 1,87,488 on which TDS of Rs. 19,322 has also been deducted by SBI. However, assessee-firm has claimed this amount against PAN of the Firm i.e., AADFD4239K. It was also noticed that Shri Dayanand-Individual filed return of income in his individual capacity but has not explained his interest income. The A.O. has failed to examine the transaction mentioned in Form 26AS. The assessment order was therefore, found erroneous and prejudicial to the interests of the Revenue. The same was set aside and A.O. was directed to re-frame the assessment. 4. The assessee is in appeal challenging the order under section 263 of the I.T. Act. The Learned Counsel fo....
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....he I.T. Act and relied upon the decision of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd., vs. CIT 243 ITR 83. Learned Counsel for the Assessee further submitted that the issue of enhancement of income on account of NP and interest was not subject matter of notice under section 263 of the I.T. Act as well as interest earned by the individual and TDS deducted by SBI is also not claimed by the Assessee-Firm in their computation of income filed at page-14 of the PB. He has submitted that show cause notice under section 263 was given only on TDS adjustment. Therefore, the other items taken-up in the impugned order would not survive under Law. He has therefore, submitted that assessment order passed by the A.O. is not erroneous in so far as prejudicial to the interests of the Revenue. He has relied upon the following decisions. 4.1. In the case of CIT vs. Nirav Modi 390 ITR 292 (Bom.) - which has been affirmed by the Hon'ble Supreme Court reported in (2017) 77 taxmann.com 15 (SC) - in which it has been held as under: "Where Assessing Officer after making proper and detailed enquiries, took a view that amount received by assessee as gift from his relatives was a....
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....5 ITR 135 (Del.) (v) Gee Vee Enterprises vs. Addl. CIT, Delhi-1 (1975) 99 ITR 375. (vi) Rampyari Devi Saraogi vs. CIT (1968) 67 ITR 84 (SC) (vii) NIIT vs. CIT (Central) (2015) 60 taxmann.com 313. 5.1. The Ld. D.R. therefore, submitted that Ld. Pr. CIT correctly set aside the re-assessment order and directed the A.O. to frame assessment after due enquiry. 6. We have considered the rival contentions. The whole issue is revolving around the claim of TDS made by the assessee for claiming refund. According to the Revenue Department, the Individual Partner of the Assessee-Firm had taken a Contract which he has transferred to the Assessee-Firm. Once TDS certificate is issued in the name of the individual, then, refund is to be claimed by the individual against the TDS. The assessee however, claimed that the entire contract work was transferred to the Firm and entire work as per contract have been executed by the Firm. According to the assessee, the same system was accepted by the Revenue Department in earlier year as well as in subsequent year. Learned Counsel for the Assessee submitted that this issue was considered in detail in A.Y. 2012-2013 by Ld. CIT(A), Faridabad vide or....
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....d Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the denial of credit of TDS of Rs. 13,01,041/- on the income declared and assessed in the hands of the appellant firm on the basis that TDS has not been deducted in the name of appellant but in the individual capacity of the partner of the appellant. 1.1 That the reasoning the given by the learned Commissioner of Income Tax (Appeals) that 'if any refund is to be claimed by the appellant against this TDS, then only course of action as per law is to file the return of income Sh. Dayanand and claim the refund', is wholly erroneous, misconceived and untenable. 1.2 That various adverse findings recorded in the orders of authorities below are factually incorrect, legally misconceived, contrary to record and thus untenable." 4. In brief, the facts of the case are that the appellant is a firm engaged in the business of civil construction. It filed its return declaring income of Rs. 7,90,480/- on 26.09.2012 with a TDS of Rs. 13,01,041/-. The case was selected for scrutiny on the basis of the mismatch between the TDS shown in AS26 and in the return filed by the appellant. During the course of appel....
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....he leaned CIT (A) in his order at page 8, wherein he held as under: "ii) Whenever a contract is given to another party, by the party which has obtained the contract (sub-contract), provisions of TDS kick in once again. That is to say that whenever there is a sub-contract, the contractor giving the contracts has to once again deduct tax. Apparently this has not been done by the partner of the firm Sh. Dayanand, when the contract in question have been transferred to the firm." 7. After acceptance of the fact that Sh. Dayanand has transferred the contract to firm learned CIT (A) ought, to have directed the assessment of the income in the hands of the firm and also allowed the credit of TDS. Further, the findings of the learned CIT(A) that whenever there is a subcontract, the contractor giving the contracts has to once again deduct tax which is incorrect and against the principles of law as the appellant firm cannot be considered as the sub-contractor of Sh. Dayanand. In the case of Hindustan Ratna JV vs. ITO reported in [2014] 42 taxmann.com 107 (Hyderabad-Trib.) (page 73-84 of paper book), it has been held as under: "22. In view of the above discussion and considering the facts....
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.... any of them acting for all. The above decision was squarely applicable in the case of the assessee as in the instant case also there was an agreement to share the profit and loss of the business of the firm. The business was carried on by all the partners, though the contract work was in the name of one of the partners. Therefore, the Dy. Commissioner (Appeals) was fully justified in allowing registration to the assessee-firm" 9. Above findings are supported by the Circular No. 7/2016 issued by CBDT placed at page 96 -97 of the Paper Book. Denial of credit of TDS of Rs. 13,01,041/- is otherwise against the principle of consistency. In another identical case of M/s Ranbir Singh having PAN No. AAJFR9966M the learned Assessing Officer allowed and issued the refund in the status of the firm for the TDS/TCS deducted in the name of one of partner namely Sh. Ranbir Singh . A copy of the order of assessment dated 10.12.2010 in the case of M/s Ranbir Singh having PAN No. AAJFR9966M is placed at pages 45-47 of paper book alongwith copy of order of granting interest on said refund at pages 44 of paper book. The aforesaid position is accepted in preceding assessment years in assessee's own ....
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....ii) ITA No. 99/Hyd/2010 ITO vs. M/s Limak Devi Singh 13. Any income could not be treated to be taxable just because tax at source has been deducted on it. i) 73 taxmann.com 166 (Mum) ABB Switzerland Ltd. Vs. ADIT(IT) (page 116-127 of Paper Book) 14. In any case, no addition can be made on the basis of Form 26 AS AIR information as has been held in the following judgments: i) ITA No. 4679/D/2012 Assessment Year 2009-10 dated 31.3.2015 ITO v. Sh. Basant Kumar. ii) ITA No. 253/Agra/2013 dated 27.6.2014 ITO v DevendraNath Dwivedi ITA No. 5125/Mum/2013 dated 10.4.2015 M/s Kroner Investments Ltd vs DCIT. iii) ITA No. 735/D/2015 dated 2.8.2016 Vikas Yadav v. ITO iv) 58 SOT 135 (Cut) (Uro) Gobindpada Bhanja Chowdhury v. ITO v) 36 taxmann.com 371 (Guj) Vaghibhai v. Bishnoi v. ITO vi) 352 ITR 273 (Del) Court on its Own Motion v. CIT vii) 365 ITR 143 (All) Rakes Kumar Gupta v. UOI viii) ITANo. 1331/D/2015 Praveen Kumar Jain v ITO dated 22.1.2015 ix) ITA No. 3534/D/2014(Del Tri) Munni Devi vs ITO68 STO 197 (Del) Bir Bahadur Singh Sijawali x) 57 ITR 532 (SC) Parimisetti Setharamamma vs. CIT xi) 159 ITD 329 (Asr) Sh. Amrik Singh vs ITO xii) 108 ITD 115(Ag....
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....ining the books of account and details produced before him and as per history of the assessee, assessed the income in the hands of the Assessee-Firm. The Ld. Pr. CIT in the show cause notice under section 263 of the Act as well as in the impugned order did not dispute this fact that income is assessable in the hands of the assessee for the contract which has taken in the name of the individual. The dispute is only of the refund claimed by the assessee. Therefore, in such circumstances, when entire income is assessed in the hands of the Assessee-Firm and have not been disputed in the impugned order, assessee has rightly made claim for refund of the amount deducted as TDS in the name of the individual. The Rule of Consistency, therefore, clearly apply in the case of the assessee and there should not have been any reason for the Pr. CIT to invoke jurisdiction under section 263 of the I.T. Act. We rely upon the decision of the Hon'ble Supreme Court in the case of Radha Swamy Satsung vs. CIT (1992) 93 ITR 321. The Hon'ble Supreme Court in the case of Malabar Industrial Co., Ltd., vs. CIT (2000) 243 ITR 83 held that where two views are possible and A.O. has taken one view with which the ....
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....tion under section 263 of the I.T. Act or to pass order. It may be noted here that the Pr. CIT without giving notice to the assessee has found that there is understated income disclosed by the assessee. It is well settled Law that assessment cannot be revised on ground which is not mentioned in the show cause notice. We rely upon the decisions of the Hon'ble Delhi High Court in the case of Krishak Bharati Cooperative Ltd., 395 ITR 572 and CIT vs. Contimeters Electricals (P.) Ltd., (2009) 317 ITR 249. Further, when explanation of assessee has not been called for, there is no question of taking any adverse view against the assessee. Further, if Pr. CIT was of the view that contract income is understated, then, he himself should have conducted the enquiry into the matter at the revisional stage and should have called for the explanation of assessee and should have gone into the details and then pass some order. In such circumstances, he should not have restore the matter back to the file of the A.O. The decision relied upon by the Learned Counsel for the Assessee clearly support the submissions of the assessee. 7. As regards the interest earned of Rs. 1,87,488 and TDS deducted by SBI....