Transport & Handling Equipments ... vs Department Of Income Tax

आयकर अपील य अधीकरण, यायपीठ - "C" कोलकाता, IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH: KOLKATA (सम )Before ी महावीर संह, यायीक सद य एवं/and ी शामीम याहया, लेखा सद य) [Before Shri Mahavir Singh, JM & Shri Shamim Yahya, AM]

आयकर अपील सं या / I.T.A No. 1187/Kol/2012 नधॉरण वषॅ/Assessment Year: 2005-06

Income-tax Officer, Wd-3(1), Kolkata. Vs. M/s. Transport & Handling Equipments Mfg. Co. Pvt. Ltd. (PAN: AAACT9319A) (अपीलाथ /Appellant) ( यथ /Respondent)

Date of hearing: 15.01.2015 Date of pronouncement: 29.01.2015

For the Appellant: Shri K. L. Kanak, Sr. DR For the Respondent: Shri I. Banerjee, FCA आदेश /ORDER Per Shri Mahavir Singh, JM :

This appeal by revenue is arising out of order of CIT(A) - I, Kolkata in Appeal No. 299/CIT(A)-1/3(1)/10-11 dated 10.05.2012. Assessment was framed by ITO, Ward-3(1), Kolkata u/s. 143(3)/147 of the Income-tax Act, 1961 (hereinafter referred to as "the Act") for Assessment Year 2005-06 vide his order dated 07.12.2010.

2. The only issue in this appeal of revenue is against the order of CIT(A) deleting the addition made by AO on account of rent as per TDS certificate at Rs.13,06,480/- by filing fresh evidence in violation of rule 46A of I. T. Rules, 1962 (hereinafter referred to as the "Rules"). For this, revenue has raised following two grounds:

"1. That the Ld. CIT(A0 has erred in law and on facts by allowing the appeal of the assessee company by accepting the fact that the license charges of Rs.15,48,985/- disclosed in the profit & loss account and the income of Rs.13,06,480/- shown as rent in TDS certificate on which TDS has been deducted u/s. 194I of the Income Tax Act represents the same income and there is a difference in the nomenclature only.

2. That the Ld. CIT(A) has erred in law by admitting fresh evidence in violation of Rule 46A of the Income Tax Rule, 1962."

3. We have heard rival submissions and gone through facts and circumstances of the case. Briefly stated facts are that the assessee is engaged in the business of providing comprehensive logistic services to its clients and these services include subletting its warehouses for rent on license basis providing handling and transportation services, inter and intra warehouse movement of materials, providing utility back up through telephone, internet, 2 ITA No. 1187/K/2012 Transport & Handling Equipments Mfg. & Pvt. Ltd. AY 2005-06

electricity and generator power and administrative services. In the relevant assessment year 2005-06, assessee filed its return of income on 09.12.2005 and the same was processed u/s. 143(1) of the Act. Subsequently, assessment was framed u/s. 143(3) r.w.s. 147 of the act. During the course of assessment proceedings, the AO noticed from return and its enclosure i.e. accounts of the assessee that the assessee has earned rental income at Rs.13,06,480/- as per TDS certificate enclosed with the return of income but the assessee has not accounted for this income in the return of income. Accordingly, in reference to TDS certificates the AO added the sum of Rs.13,06,480/- by giving following findings:

"The assessee's submission has been perused with reference to TDS certificates enclosed with return of income. The parties deducted TDS u/s. 194I treating nature of payment as rent. In the profit & loss account assessee had shown only service charges. No income was shown as rent. The assessee could not substantiate with documentary evidences that rent received from the parties was included with service charge. Only stated that nomenclature in the TDS certificates was wrong. In view of this the assessee's above explanation is not acceptable and tenable. It is clear that the assessee suppressed it's the rental income of Rs.13,06,480/- which is added back to total income."

Aggrieved, assessee preferred appeal before CIT(A), who deleted the addition by stating that the assessee has credited a sum of Rs.15,48,985/- as licence charges in the P&L Account in the final accounts of the FY 2004-05 relevant to this AY 2005-06 and the TDS is deducted on this very license charges and the same income is rent which is subject matter of this appeal. The AO after going through the license agreement and bank statement reflecting income credited in the bank account of the assessee and copies of bills and register deleted the addition for the reason that only nomenclature is different for crediting this income i.e. license charges instead of rental income, otherwise it is the same. According to CIT(A), this is double addition and hence, he deleted the addition. Aggrieved, now revenue is in appeal before us.

4. We have also gone through the P&L Account wherein the assessee has credited the sum of Rs.15,48,985/- as license charges. The assessee has declared client wise details and gross license fee received and corresponding TDS during the year and the total of TDS is Rs.2,94,892/- and gross license fee is Rs.15,48,985/-. Now on query from the Bench, Ld. Sr. DR could not point out that this income added by AO as rental income amounting to Rs.13,06,480/- is not same income as disclosed by assessee in its P&L Account as licence fee. He failed to demonstrate anything from the accounts of the assessee or he could not corroborate this alleged rental income with that of licence fee whereas the assessee's counsel explained the entire gamut of this story and stated that this licence charges in the accounts of 3 ITA No. 1187/K/2012 Transport & Handling Equipments Mfg. & Pvt. Ltd. AY 2005-06

the assessee for FY 2004-05 reflects the rental income of Rs.15,48,985/- received from clients is the disclosure of rent during the FY. The assessee has co-related the entire TDS with the rental income which is declared as licence fee. In view of the above facts, we are of the view that the AO was under mistaken belief that the assessee has not disclosed the rental income whereas actually the assessee has disclosed the same under the head licence fee. The document proves the case. In term of the above, we confirm the order of CIT(A) deleting the addition and this issue of revenue's appeal is dismissed.

5. In the result, appeal of revenue is dismissed.

6. Order is pronounced in the open court on 29.01.2015 Sd/- Sd/-

शामीम याहया, लेखा सद य महावीर संह, यायीक सद य (Shamim Yahya) (Mahavir Singh) Accountant Member Judicial Member

Dated : 29 th January, 2015

व र ठ निज स चव Jd.(Sr.P.S.)

आदेश क त ल प अ े षतः- Copy of the order forwarded to: 1. अपीलाथ /APPELLANT - ITO, Ward-3(1), Kolkata.

2 यथ /Respondent - M/s. Transport & Handling Equipments Mfg. Co. Pvt. Ltd., 2A, Chowringhee Square, Kolkata-69 3. आयकर क मशनर (अपील)/ The CIT(A), Kolkata 4. आयकर क मशनर/ CIT Kolkata

5. वभा गय तनीधी / DR, Kolkata Benches, Kolkata स या पत त/True Copy, आदेशानुसार/ By order,

सहायक पंजीकार/Asstt. Registrar.