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TMI Blog2024 (9) TMI 1620X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, we are in full agreement with the contentions of assessee and the case laws relied upon by him are squarely applicable to the facts of the present case. Hence, insofar as non residents are concerned, the order to that extent is clearly time barred. There is a small credit of income to a resident, but the transaction did not crystalize. Assessee appeal allowed. - Shri V. Durga Rao, Judicial Member And Shri K.M. Roy, Accountant, Member For the Assessee : Shri R.K. Ganeriwal For the Revenue : Shri Abhay Y. Marathe ORDER PER K.M. ROY, A.M. The present appeals have been filed by the assessee challenging the impugned orders of even date 20/03/2023, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [ learned CIT(A) ], for the assessment year 2012 13 and 2013 14, uploading order under section 201(1A) of the Act dated 30/09/2021, passed by the ACIT (TDS), Circle 1, Nagpur. ITA no.3/Nag./2024 Assessee s Appeal A.Y. 2012 13 2. In its appeal, the assessee has raised following revised and modified grounds of appeal on the date of hearing: 1. The order passed by learned ACIT(TDS) and order of Honourable CIT(A) is illegal, incorrect, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Power Looms. The assessee filed its return of income for the year under consideration 2013-14 on 29/09/2014, disclosing total taxable income is nil with TDS of ₹ 10,63,979, and refund of ₹ 10,63,979. During eth year, the assessee collected share application money from various applicants as details below. The assessee has also received total amount of ₹ 4,65,79,390, as advance against share application money. The assessee has taken interest provision @ 12% per year amount of ₹ 55,89,527, in his books of account from F.Y. 2012-13 to F.Y. 2018-19. This entry was purely provision and contingent liability nature hence the assessee did not claim this expenditure in her income tax returns. Due to this reason, the assessee has not deposited TDS on the credited interest amount in financial year. The learned A.R. further submitted that the assessee had passed reversal entry in books of account for interest amount of ₹ 55,89,527, per annum and has taken reversed for entire period from F.Y. 2012-13 to F.Y. 2018-19. The total interest amount ₹ 3,91,26,689. The learned A.R. further submitted that the assessee made provision for interest on share application mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciation of facts: 7. We have heard both the sides and perused the material available on record. In this case the admitted facts are that the assessee has purchased a property during the FY 2010-11 relevant to the AY 2011-12 on 7/3/2011. The assessee has paid a sum of Rs. 54,22,000/- out of which Rs. 50,39,500/- was paid to the NRI. As per the provisions of section 195 of the Act, the assessee is required to deduct tax at source on payments made to non-residents. In the instant case, the assessee required to deduct the tax at source on the sums chargeable to capital gains. The assessee has failed to deduct the tax at source, therefore the assessee is liable for payment tax and interest u/s. 201(1)/201(1A) of the Act. The Ld. AO passed order u/s. 201(1)/201(1A) on 27/03/2018 which is after a lapse of five years from the end of the relevant assessment year. There is no time limit provided under the Act for treating the assessee as an assessee in default in respect of payment made to non-resident. As per section 201(3), as rightly pointed out by the Ld. AR it applies to residents and not to non-residents. The identical issue has come up before this Tribunal in the case of Bheemar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mits for the non residents which indicates that the Parliament has accepted the judicial pronouncements for the limitation period already set out by the courts. The Hon ble Delhi High Court also considered the decision of Hon ble Supreme Court in the case of GE India Technology Centre Vs. CIT (2010) (10) SCC 29, wherein, the Hon ble Supreme Court held that the proceedings should be initiated u/s 201/201(1A) within reasonable period and it cannot extend without limitation. After considering the decision of the Hon ble Supreme court in GE India Technology and the Vodafone Essar Mobiles Ltd. the Hon ble Delhi High Court followed its own decision in the case of CIT Vs. NHK Japan Broadcasting Limited (supra) and held that 4 years is the reasonable period for initiating the proceedings u/s 201/201(1A) of IT Act. The Ld. DR relied on the decision of Hon ble Bombay High Court in the case of Mahindra Mahindra Ltd. Considering the Hon ble Supreme court decision in CIT Vs.Vegetable Products Ltd., 88 ITR 192 (SC) and CIT Vs. Karamchand Premchand Ltd (1960) 40 ITR 106, we are also of the view that the decision favourable to the assessee is required to be taken. Accordingly following the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admitting a total taxable income of Rs. 16,16,878/- and offered capital gains of Rs. 15,22,953/-. The AO of the non-resident ITO, Ward12(2), Hyderabad passed the assessment order u/s. 143(3) r.w.s 147 of the Act on 12/6/2019 accepting the return filed by the NRI Smt. Davuluri Sai Swapna. Since the non-resident has discharged her obligation with respect to payment of capital gains tax, the assessee cannot be taxed once again for non-deduction of TDS u/s. 195 of the Act. It is also observed that the seller Smt. Davuluri Sai Swapna is a non-resident from the assessment order passed by AO, Ward-12(2), Hyderabad. Similarly it is also noticed that the AO erred in not adopting the SRO value as prescribed u/s. 50C of the Act while concluding the assessment of the Non-Resident. The reliance placed by the Ld. DR in ITO vs. Shri Rang Infrastructure (P) Ltd (supra) is distinguishable on the fact that the extension of the period of time limit u/s. 201(3) applies only to residents and not to NRIs and hence reliance cannot be placed for the instant case. Respectfully following the judicial precedents as discussed in the earlier paras, we are of the considered view that treating the assessee as an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the levy of TDS on advance Share Capital from resident/ non resident Rs. 11,06,205 + Interest u/s 201(1A) of Rs. 10,06,647 total Rs. 21,12,852/- is incorrect, illegal, bad in law and without natural justice and same is to be deleted. 5. Appellant craves a right to add, modify, alter, or withdraw and of the ground/s of appeal during the course of hearing. PRAYS: Appellant prays before your honor to delete the non-deduction TDS and interest thereon u/s 201(1) and 201(1A) of Rs. 21,12,852/- or the appropriate relief is to be granted as the Honorable ITAT may think fit. 12. Since the facts and circumstances of the issues raised in this appeal for our adjudication are mutatis mutandis identical to the facts and circumstances of the issues decided by us in assessee s appeal being ITA no.3/Nag./2014, for ay 2012 13, vide Para 6 and 7, above, wherein we have decided this issue in favour of the assessee and against the Revenue for the reasons stated supra, consistent with the view taken therein, we set aside the impugned order passed by the learned CIT(A) by allowing the grounds of appeal raised by the assessee for A.Y. 2013 14 as well. 13. We may briefly add here that the learned Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X
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