Smt.Prasanna Radhakrishnanan Dawson, Calicut V. ITO, Calicut

CO 1/COCH/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8652 (ITAT-COCHIN)
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 07-06-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 27-02-2013
• Court: TRIBUNAL
• Department Lawyers: M ANIL KUMAR; SUSAN GEORGE VARGHESE
• Assessee Lawyers: C B M WARRIER
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO. 29/COCH/2013 ASSESSMENT YEAR : 2009-10 THE I.T.O., WARD-1(2), KOZHIKODE. VS. SMT. PRASANNA RADHAKRISHNAN DAWSON, PROPRIETRIX, M/S. R.K. GAS AGENCY, ENGLISH CHURCH CROSS ROAD, NADAKKAVU, KOZHIKODE-673 011. [PAN: AAIPR 5278H] (REVENUE -APPELLANT) (ASSESSEE-RESPONDENT ) C.O. NO. 01/COCH/2013 (ARSG. OUT OF I.T.A. NO. 29/COCH/2013) ASSESSMENT YEAR : 2009-10 SMT. PRASANNA RADHAKRISHNAN DAWSON, PROPRIETRIX, M/S. R.K. GAS AGENCY, ENGLISH CHURCH CROSS ROAD, NADAKKAVU, KOZHIKODE-673 011. [PAN: AAIPR 5278H] VS. THE I.T.O., WARD-1(2), KOZHIKODE. (ASSESSEE-APPELLANT) (REVENUE-R ESPONDENT) REVENUE BY SMT. SUSAN GEORGE VARGHESE, SR. DR AND SHRI M. ANIL KUMAR, CIT(DR) ASSESSEE BY SHRI C.B.M. WARRIER, CA DATE OF HEARING 05/06/2013 DATE OF PRONOUNCEMENT 07/06/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) -I, KOZHIKODE AND THEY RELATE TO THE ASSESSMENT YEAR 2009-10. I.T.A. NO. 29/COCH/2013 & C.O. NO. 01/COCH/2013 2 2. THE SOLITARY ISSUE URGED IN THE APPEAL FILED BY THE REVENUE IS WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE M ADE U/S. 40(A)(IA) OF THE ACT. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE IS A DEALER OF LPG GAS SUPPLIED BY M/S HPCL. DURING THE COURSE OF SCRU TINY PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS PAID TRANSPOR TATION CHARGES TO THE TUNE OF RS.1,29,84,892/- WITHOUT DEDUCTING TAX AT SOURCE. THE ASSESSING OFFICER NOTICED THAT THE SAID AMOUNT WAS PAID TO A PERSON NAMED MR. SURE SH. THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT MR. SURESH CITED ABOVE, IS HER EMPLOYEE AND THE WORK OF TRANSPORTATION OF GAS CYLINDERS WAS CARRIED OUT THROUGH HIM. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE SAID CLAIM AND ACCORDING LY, TREATED THE PAYMENTS MADE TO MR. SURESH AS THE PAYMENTS MADE TO A CONTRACTOR. SINCE THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE AS PER THE PROVISIONS OF SEC. 194C OF THE AC T, THE ASSESSING OFFICER DISALLOWED THE ENTIRE AMOUNT OF RS.1,29,84,892/- BY INVOKING T HE PROVISIONS OF SEC. 40(A)(IA) OF THE ACT. IN THE APPEAL FILED BY THE ASSESSEE, THE LD. CIT(A) DELETED THE ADDITION BY PLACING RELIANCE ON THE DECISION RENDERED BY THE COCHIN BEN CH OF ITAT IN THE CASE OF M/S. CEE PEE GRANITES PVT. LTD. VS. ACIT IN I.T.A. NOS. 400 & 401/COCH/2011 DATED 14/09/2012. AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT(A), TH E REVENUE HAS FILED THIS APPEAL BEFORE US. 4. THE LD. DR SUBMITTED THAT THE TRIBUNAL HAD DECID ED AN IDENTICAL ISSUE IN THE CASE OF M/S. CEE PEE GRANITES PVT. LTD., REFERRED SUPRA, BY FOLLOWING THE DECISION RENDERED BY THE SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORTS (136 ITD 23). THE LD. DR SUBMITTED THAT THE HONBLE HIGH COURT OF ANDHRA PRADESH HAS GRANTED INTERIM SUSPENSION OF THE DECISION RENDERED IN THE CASE OF MERILYN SHIPPING & TRANSPORTS. THE LD. DR FURTHER SUBMITTED THAT THE DECISION RENDERED BY THE SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORTS WAS NOT ACCEPTED BY H ONBLE HIGH COURTS OF CALCUTTA AND GUJARAT. I.T.A. NO. 29/COCH/2013 & C.O. NO. 01/COCH/2013 3 5. ON THE CONTRARY, THE LD. AR SUBMITTED THAT THE A SSESSING OFFICER HAS MADE THE IMPUGNED ADDITION ON THE GROUND THAT THE ASSESSEE H AS CARRIED OUT THE WORK OF TRANSPORTATION OF GAS CYLINDERS THROUGH A PERSON NA MED MR. SURESH. THE LD. AR SUBMITTED THAT MR. SURESH IS AN EMPLOYEE OF THE ASS ESSEE AND FOR THE SAKE OF ACCOUNTING CONVENIENCE, THE WORK OF TRANSPORTATION WAS CARRIED OUT THROUGH HIM. ACCORDINGLY, THE LD. AR SUBMITTED THAT THERE IS NO CONTRACT BETWEEN THE ASSESSEE AND MR. SURESH AND HENCE THE PROVISIONS OF SEC. 194C AR E NOT APPLICABLE IN THIS CASE. THE LD A.R SUBMITTED THAT THERE IS A CONTRACT BETWEEN T HE ASSESSEE AND M/S HPCL AND HENCE M/S HPCL IS DEDUCTING TAX AT SOURCE ON THE PA YMENTS MADE TO THE ASSESSEE. HE FURTHER SUBMITTED THAT THE ASSESSEE IS GETTING ONLY REIMBURSEMENT OF THE TRANSPORT CHARGES FROM M/S HPCL AND HENCE THE ASSESSEE IS NOT UNDER AN OBLIGATION TO DEDUCT TAX AT SOURCE ON THE PAYMENTS MADE ON BEHALF OF THE SAI D COMPANY. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. AS SUBMITTED BY THE LD. DR, THE LD. CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION RENDERED BY THE TRIBUNAL IN THE CASE OF M/S. CEE PEE GRANITES PVT. LTD.(REFERRED SUPRA), WHICH IN TURN WAS RENDER ED BY FOLLOWING THE DECISION OF THE SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRA NSPORTS (REFERRED SUPRA). WE NOTICE THAT THE HONBLE HIGH COURT OF CALCUTTA, VIDE ITS O RDER DATED 28-03-2013 IN THE CASE OF CIT VS. CRESCENT EXPORT SYNDICATE IN ITAT NO. 20/201 3, HAS HELD THAT THE DECISION RENDERED BY THE SPECIAL BENCH IN THE CASE OF MERILY N SHIPPING & TRANSPORTS IS NOT ACCEPTABLE. WE ALSO NOTICE THAT THE HONBLE HIGH C OURT OF GUJARAT VIDE ITS ORDER DATED 02-05-2013 IN THE CASE OF CIT VS. SIKANDARKHAN N. T UNVAR (TAX APPEAL NO. 905/2012 & ORS.) HAS HELD THAT THE SPECIAL BENCH IN THE CASE O F MERILYN SHIPPING & TRANSPORTS DOES NOT LAY DOWN THE CORRECT LAW. ACCORDINGLY, BOTH TH E HIGH COURTS DID NOT APPROVE THE DECISION RENDERED BY THE SPECIAL BENCH IN THE ABOVE SAID CASE. 7. IN THE CASE OF KANEL OIL & EXPORT INDS. LTD ( 121 ITD 596) (AHD)(TM), THE HONBLE THIRD MEMBER CONSIDERED THE ISSUE, VIZ., WHICH OF T HE DECISION IS REQUIRED TO BE FOLLOWED WHEN THE DECISIONS RENDERED BY THE SPECIAL BENCH OF THE TRIBUNAL AND BY ANY I.T.A. NO. 29/COCH/2013 & C.O. NO. 01/COCH/2013 4 OF HIGH COURT CONTRADICTS WITH EACH OTHER. IN THI S REGARD, THE HONBLE THIRD MEMBER OBSERVED AS UNDER:- ONE IS OF A SPECIAL BENCH OF THE TRIBUNAL, AHMEDAB AD AND THE OTHER IS OF A HIGH COURT, THOUGH NOT THE JURISDICTIONAL HIGH COURT. A SIMPLE ANSWER WOULD BE THAT THE JUDGMENT OF A HIGH COURT, THOUGH NOT OF THE JUR ISDICTIONAL HIGH COURT, PREVAILS OVER AN ORDER OF THE SPECIAL BENCH EVEN TH OUGH IT IS FROM THE JURISDICTIONAL BENCH (OF THE TRIBUNAL) ON THE BASIS OF THE VIEW THAT THE HIGH COURT IS ABOVE THE TRIBUNAL IN THE JUDICIAL HIERARCHY. B UT THIS SIMPLE VIEW IS SUBJECT TO SOME EXCEPTIONS. IT CAN WORK EFFICIENTLY WHEN THER E IS ONLY ONE JUDGMENT OF A HIGH COURT ON THE ISSUE AND NO CONTRARY VIEW HAS BE EN EXPRESSED BY ANY OTHER HIGH COURT. BUT WHEN THERE ARE SEVERAL DECISIONS O F NON-JURISDICTIONAL HIGH COURTS EXPRESSING CONTRARY VIEWS, IT HAS BEEN RECOG NISED THAT THE TRIBUNAL IS FREE TO CHOOSE TO ADOPT THAT VIEW WHICH APPEALS TO IT.. WE HAVE ALREADY NOTICED THAT THE HONBLE HIGH COURT OF CALCUTTA AND THE HONBLE HIGH COURT OF GUJARAT HAVE NOT APPROVED THE DECISION REN DERED BY THE SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS AND NO OTHE R CONTRARY DECISION RENDERED BY ANY OF THE HIGH COURT WAS BROUGHT TO OUR NOTICE. H ENCE, WE ARE INCLINED TO FOLLOW THE DECISIONS RENDERED BY THE HONBLE HIGH COURTS OF CA LCUTTA AND GUJARAT. 7. THE LD. CIT(A) HAS DECIDED THE IMPUGNED ISSUE BY FOLLOWING THE DECISION RENDERED BY THIS BENCH OF TRIBUNAL, WHICH IN TURN P LACED RELIANCE ON THE DECISION RENDERED BY THE SPECIAL BENCH IN THE CASE OF MERILY N SHIPPING & TRANSPORTS ON A LEGAL ISSUE. IN VIEW OF THE DECISIONS RENDERED BY THE HO NBLE HIGH COURTS OF CALCUTTA AND GUJARAT, THE DECISION RENDERED BY THIS BENCH OF THE TRIBUNAL IN THE CASE OF CEE PEE GRANITES (P) LTD (SUPRA) IS NO MORE A GOOD LAW. HE NCE, THE ORDER OF LD CIT(A) IS LIABLE TO BE SET ASIDE AND WE ORDER ACCORDINGLY. 8. IN THE CROSS OBJECTION, THE ASSESSEE HAS ALS O RAISED MANY NEW LEGAL GROUNDS, WHICH APPEAR TO HAVE NOT BEEN URGED BEFORE THE LD C IT(A). FURTHER, THE LD CIT(A) HAS DISPOSED OF THE APPEAL BY CONSIDERING ONLY A LEGAL ISSUE AND HE HAS NOT CONSIDERED THE IMPUGNED ISSUE ON MERITS. HENCE, WE ARE OF THE VIE W THAT THIS ISSUE NEEDS TO BE ADJUDICATED AFRESH AT THE END OF THE LD. CIT(A) AND ACCORDINGLY, WE RESTORE ALL THE MATTERS TO HIS FILE. I.T.A. NO. 29/COCH/2013 & C.O. NO. 01/COCH/2013 5 9. IN THE RESULT, THE APPEAL FILED BY THE REVE NUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PUR POSES. PRONOUNCED ACCORDINGLY ON 07-06-2 013. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 7TH JUNE, 2013 GJ COPY TO: 1. SMT. PRASANNA RADHAKRISHNAN DAWSON, PROPRIETRIX, M/S. R.K. GAS AGENCY, ENGLISH CHURCH CROSS ROAD, NADAKKAVU, KOZHIKODE-673 011. 2. THE INCOME TAX OFFICER,WARD-1(2), KOZHIKODE. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-I, KOZHI KODE. 4.THE COMMISSIONER OF INCOME-TAX, KOZHIKODE 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN