O/TAXAP/57/2015 ORDER IN HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 57 of 2015 ================================================================ ASST. CIT CIRCLE 5....Appellant(s) Versus SHIV CONSTRUCTION CO.....Opponent(s) ================================================================ Appearance: MR KM PARIKH, ADVOCATE for Appellant(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE JAYANT PATEL and HONOURABLE MR.JUSTICE S.H.VORA Date : 27/01/2015 ORAL ORDER (PER : HONOURABLE MR.JUSTICE JAYANT PATEL) 1. Revenue has preferred present appeal on following substantial questions of law:- (i) Whether Appellate Tribunal is justified in law and on facts in deciding appeal of revenue on issue which was never raised by Department, on irrelevant aspect of deduction of tax thereby exculpating Assessee from addition amounting to Rs.1,80,54,537/ being difference between contract receipts declared in return of income and contract Page 1 of 5 HC-NIC Page 1 of 5 Created On Wed Sep 30 15:45:05 IST 2015 O/TAXAP/57/2015 ORDER receipts lucid from facet of TDS Certificates ? (ii) Whether Appellate Tribunal is justified in law and on facts in restoring matter to file of Assessing Officer for specific verification of income declared by recipients, relying upon ratio laid down by Hon ble Apex Court in case of Hindustan Coca Cola Beverage Pvt. Ltd. vs. CIT, reported in 293 ITR 226 (SC), which was rendered in context of section 201(1) of Act and principles laid down therein could not be adopted for purpose of interpreting section 40(a)(ia) of Act and also in case of Assessee involving suppression of contractual receipts ? 2. relevant facts are that A.O., made addition of income of Rs.1,78,20,644/- on ground that in TDS Certificate issued by Government for contract to Assessee, payment was shown as made to Assessee, whereas claim of Assessee was that such amount was directly paid to Sub-contractor, Page 2 of 5 HC-NIC Page 2 of 5 Created On Wed Sep 30 15:45:05 IST 2015 O/TAXAP/57/2015 ORDER with whom there was joint venture by Assessee. In appeal CIT (A), partly allowed appeal by granting relief to extent of Rs.1,62,49,087/-. Tribunal in further appeal, at paragraph 5, observed thus:- 5. We have heard rival submissions, perused material available on record and gone through orders of authorities below. We find that both authorities below have treated receipts paid to other seven persons as payments made under sub contract. If payment has been made under sub contract, assessee was required to deduct tax. contention of Ld. Counsel for assessee is that even if it is assumed that payments have been made under sub contract, then also AO has to give clear finding as to how and under what provisions of law assessee is required to deduct tax. It is also contended that in view of amendment in section 201 of Act and also in light of judgement of Hon ble Apex Court rendered in case of Hindustan Coca Cola Beverage Pvt. Ltd. vs. CIT reported at (2007) 293 ITR 226(SC), if recipient has disclosed contract receipts in his return of income and tax has been paid on such receipts under such circumstances, no disallowance is called for. After considering totality of facts, we are considered view that this issue be restored to file of AO to verify whether recipients of payments have declared receipts of their returns of income and paid tax thereon. In case, they have declared and tax has been paid, issue may be decided in light of judgement of Hon ble Apex Court rendered in case of Hindustan Coca Cola Beverage Pvt. Ltd. (supra) and amendment in section 201 of Act. Accordingly, issue is hereby restored to file of AO for decision afresh in light of Page 3 of 5 HC-NIC Page 3 of 5 Created On Wed Sep 30 15:45:05 IST 2015 O/TAXAP/57/2015 ORDER observation made hereinabove. Needless to say that assessee may be given sufficient opportunity to furnish requisite details. Thus, this ground of Revenue s appeal is allowed for statistical purposes. 3. aforesaid shows that based on decision of Apex Court in case of Hindustan Coca Cola Beverage Pvt. Ltd. vs. CIT, reported in 293 ITR 226 (SC), if Sub-contractors have disclosed contract receipts in their Return of Income and have paid tax, no dis-allowance would be called for on principles that there would not be any double taxation of income. Tribunal, for such purpose, directed A.O., to verify whether recipients of payments have declared respective amount paid by assessee in their Return of Income and have paid tax thereon. 4. learned Counsel for Revenue has not been able to show that any inquiry was made earlier by A.O., as to whether recipients of payments namely; Sub-contractors have declared receipts in their Return of Income and have paid tax thereon. Page 4 of 5 HC-NIC Page 4 of 5 Created On Wed Sep 30 15:45:05 IST 2015 O/TAXAP/57/2015 ORDER 5. In our view, Tribunal, being ultimate fact- finding authority, has exercised discretion and has remanded matter, relying upon decision of Apex Court in case of Hindustan Coca Cola Beverage Pvt. Ltd. vs. CIT (supra). We do not find that there is any perversity in exercise of discretion by Tribunal. 6. We do not find any substantial questions of law would arise as sought to be canvassed in present appeal. 7. Under these circumstances, appeal is meritless. Hence, dismissed. (JAYANT PATEL, J.) (S.H.VORA, J.) vinod Page 5 of 5 HC-NIC Page 5 of 5 Created On Wed Sep 30 15:45:05 IST 2015 Asst. CIT Circle-5 v. Shiv Construction Co