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II. Direct Taxes Case Laws:
1. IGL Gemstones Pvt. Ltd. Vs. DCIT, I.T.A. No. 2955/Mum/2013, Date of order: 25.05.2015, ITAT - Mumbai
Mere acceptance by the assessee of the addition does not entitles the department to levy concealment penalty
As per
the provisions of section 194C r.w. definition of “work” given under its
Explanation, the case of the assessee has to be accepted that assessee
could be under bonafide belief for non-deduction of tax from the type of
payments upon which it has been held that assessee is liable to deduct
TDS. Mere acceptance by the assessee of the addition does not entitles
the department to levy concealment penalty. Further, no such allegation
can be imposed upon the assessee to say that did not furnish all the
particulars or it has disclosed inaccurate particulars so as to say that
assessee is liable for concealment penalty. Keeping in view the
entirety of facts and also reasonable belief of the assessee that it is
not entitled for deduction of tax on the payments made to him by it as
the same were excluded from the definition of “work” by the Explanation
to section 194C, we are of the opinion that levy of concealment penalty
in the present case is not justified and deserves to be deleted.
Case
referred: Rushi Builders & Developers vs. ACIT, ITA No.6684/Mum/12
and ITO vs. Kuber Khaini Pvt. Ltd., ITA No.155/Del/2011
(Please click here for judgment)
2. JCIT Vs. M/s. Tirupati Plywood Industries, I.T.A No. 1592/Kol/2012, Date of Pronouncement: 30.04.2015, ITAT - Kolkata
Whether
a disallowance can be made by AO u/s 40(a)(ia) for not deducting TDS
u/s 195 in the absence of PE and business connection of exporter in
India.
Held_No
In
brief, the assessee is engaged in manufacturing of plywood where
imported timber is being used and assessee has imported wood logs from
outside India. There was a survey u/s 133A on assessee’s business
premises. The assessee made payment to importer without deducting TDS
u/s 195 of the Act as its contention was that the Exporter has neither
any PE in India nor has any business connection with Indian importer
except exporting of timber logs rather the Indian party i.e. the
assessee imported the goods for purchase of imported goods. However, the
Ld. AO contended that the assessee was liable to deduct TDS for making
payment to foreign parties u/s 195 of the Act and placed reliance on the
decision of Hon’ble Supreme Court in the case of A. P. Ltd. Vs. CIT
(1999) 739 ITR 587 (SC). Whereas, the CIT(A) deleted the disallowance by
relying on the decision of Honble Supreme Court in the case of GE India
Technology Centre P. Ltd. Vs. CIT (2010) 327 ITR 456 (SC).
The
Hon’ble ITAT held that the issue was squarely covered in favour of
assessee and against revenue. Thus, the appeal of revenue was
accordingly dismissed.
(Please click here for judgment)
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