M/s. Navjivan Synthetics, Surat V. The Income tax Officer,Ward-9(3), Surat

CO 35/AHD/2009

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9652 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 3 month(s) 28 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-06-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 24-06-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 02-03-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: J P SHAH
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) C.O. NO: 35/AHD/2009 (ASSESSMENT Y EAR: 2005-06) M/S. NAVJIVAN SYNTHETICS SURVEY NO. 414-415, RESHAMWALA COMPOUND, VASTA DEVDI ROAD, SURAT. V/S INCOME TAX OFFICER, WARD 9(3), SURAT (APPELLANT) (RESPONDENT) PAN: AABFN9913E APPELLANT BY : SHRI J.P. SHAH, A.R RESPONDENT BY : SHRI K.C. MATHEWS SR. D.R. ( )/ ORDER DATE OF HEARING : 24-06-2014 DATE OF PRONOUNCEMENT : 30-06-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS C.O. OF ASSESSEE IS AGAINST THE ORDER OF CI T(A)-V, SURAT DATED 21.10.2008 FOR A.Y. 2005-06. 2. THE FACTS AS CULLED OUT FROM THE MATERIAL ON REC ORD ARE AS UNDER. 3. ASSESSEE IS A FIRM STATED TO BE ENGAGED IN THE B USINESS OF DYEING, FINISHING AND PRINTING JOB WORK OF ART SILK GREY FABRICS. ASS ESSEE FILED ITS RETURN OF INCOME FOR AY 05-06 ON 24.10.2005 DECLARING TOTAL L OSS OF RS NIL. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) C.O NO 35/AHD/2009 . A.Y. 2005-0 6 2 VIDE ORDER DATED 28.12.2007 AND THE TOTAL INCOME WA S DETERMINED AT RS 6,01,040/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) VIDE ORDER DATED 21.10.2008 GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A), REVENUE PREFERRED APPEAL AND ASSESSEE PREFERRED CO BEFORE HON'BLE TRIBUNAL. HON' BLE TRIBUNAL VIDE ORDER DATED 6.7.2012 (ITA NO 226/AHD/2009 AND CO NO 35/AH D/2009) DECIDED THE APPEAL. THEREAFTER ASSESSEE FILED M/A AND THEREAFTE R CO OF ASSESSEE WAS RECALLED VIDE ORDER DATED 9.11.2012 (M/A NO 141/AHD /2012) AND THEREFORE THE PRESENT CO IS NOW BEFORE US. THE GROUND RAISED IN T HE CO OF ASSESSEE READS AS UNDER:- 1. THE CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE OF R S. 2,64,101/- THOUGH THERE WAS NO BREACH OF SECTION 40(A)(IA). 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ON PERUSING THE P&L ACCOUNT, A.O NOTICED THAT ASSESSEE HAD DEBITED TRAN SPORTATION CHARGES OF RS 10,25,950/-. AO HAS NOTED THAT ASSESSEE DID NOT PRO DUCE ANY BILLS/RECEIPTS FOR VERIFICATION EXCEPT SOME CASH VOUCHERS. AO WAS OF THE VIEW THAT THOUGH THE ASSESSEE WAS LIABLE TO DEDUCT TDS ON TRANSPORTA TION CHARGES U/S 194C, ASSESSEE HAD NOT DEDUCTED TDS AT ALL ON THE PAYMENT S. HE ALSO NOTED THAT UPTO 30.9.2004, ASSESSEE WAS NOT LIABLE TO DEDUCT T DS U/S 194C SINCE NO PAYMENT IN EXCESS OF RS 20,000/- WAS PAID TO A SING LE PERSON BUT HOWEVER, AFTER 1.10.2004, THE LAW WAS AMENDED TO PROVIDE FOR DEDUCTION OF TDS WHEN THE AGGREGATE VALUE OF CONTRACT EXCEEDS RS 50,000/- IN A FINANCIAL YEAR. HE FURTHER NOTICED THAT ASSESSEE HAD PAID AGGREGATE AM OUNT OF RS 2,64,101/- TO PARTIES ON WHICH TDS WAS DEDUCTIBLE. SINCE TDS WAS NOT DEDUCTED, AO DISALLOWED THE AMOUNT OF RS 2,64,101 (ON WHICH TDS WAS DEDUCTIBLE) OUT OF THE TOTAL TRANSPORTATION CHARGES U/S 40(A)(IA) OF T HE ACT. AGGRIEVED BY THE ORDER OF AO ASSESSEE CARRIED THE MATTER BEFORE CIT( A). CIT(A) UPHELD THE ORDER OF AO BY HOLDING AS UNDER:- DURING THE PROCEEDINGS BEFORE ME, THE ASSESSEE EXPL AINED THAT THE TRANSPORTATION EXPENSES WERE ACTUALLY INCURRED AND XEROX COPIES OF ALL THE BILLS WERE SUBMITTED. THE ASSESSEE EXPLAINED ITS CASE VIDE ITS LETTER DATED 1 2-12-2007 AND 24-12-2007 AND VIDE SUBMISSION DATED 11-08-2008.M/S. RADHEY TRANSPORT O F CHAR RASTA, JAGADIA, DIST: C.O NO 35/AHD/2009 . A.Y. 2005-0 6 3 BHARUCH 393110 WAS PAID RS. 1,24,414/- BY WAY OF TR ANSPORT CHARGES IS ASSESSED TO INCOME - TAX ON P. A/C NO: ADZPP-8246-K AND M/S. PO OJA ROADWAYS OF CHAR RASTA, JHAGADIA, DIST: BHARUCH 393110 WAS PAID RS.1,07,721 /- AS TRANSPORT CHARGES AND ALSO ASSESSED TO INCOME - TAX BEARING P. A/C NO: AE UPP-7806-H. THE TOTAL OF 2 TRANSPORT AGENCIES COMES TO RS.2,32,135/-(RS.1,24,4 14 + RS.1,07,721). THE TOTAL ADDITION OF RS.2,64,101/- WAS MADE, OUT OF THIS RS. 2,32,135/- AS STATED ABOVE EXPLAINED AND HENCE THE DIFFERENCE OF RS.31,966/- ( RS.2,64,101 - RS.2,32,135), WHICH IS BELOW RS.50,000/- AND HENCE NOT REQUIRED TO DEDU CT TAX. THE ADDITION OF THE SUM OF RS.2,64,101/- HAS THEREFORE, BEEN SOUGHT TO BE DELE TED. I HAVE GONE THROUGH THE RIVAL CONTENTIONS AND APPLI ED MY MIND TO THE ISSUE. I SEE NO MERIT IN THE APPELLANTS ARGUMENT WHO HAS TRIED TO COMPLICATE THE ISSUE AND STRETCHED A SIMPLE LOGIC TOO FAR. THE CRUX OF THE MATTER IS T HAT THE TOTAL PAYMENT ON WHICH TAX WAS TO BE DEDUCTED IS RS 2,64,101/-. THIS HAS NOT B EEN DONE AND THEREFORE THE SAME HAS BEEN JUSTIFIABLY DISALLOWED AS PER PROVISIONS O F SECTION 40 (A)(IA) OF THE ACT. I DO NOT THEREFORE SEE ANY INFIRMITY IN THE AO'S ACTION AND THE SAME IS UPHELD. 5. AGGRIEVED BY THE ORDER OF AO, ASSESSEE IS NOW IN APPEAL BEFORE US. 6. BEFORE US, LD AR REITERATED THE SUBMISSIONS MADE BEFORE AO AND CIT(A). HE FURTHER SUBMITTED THAT ASSESSEE HAS NO CONTRACT WIT H THE TRANSPORTERS AS THE CONTRACT IS BETWEEN GMDC (THE SUPPLIER OF COAL TO T HE ASSESSEE) AND THE TRANSPORTER AND THEREFORE ASSESSEE IS NOT LIABLE TO DEDUCT TDS U/S 194C. THE LD DR ON THE OTHER HAND POINTED TO THE FINDING OF T HE A.O IN THE ASSESSMENT ORDER THAT BEFORE AO ASSESSEE DID NOT PRODUCE THE B ILLS/ RECEIPTS FOR VERIFICATION EXCEPT FOR SOME CASH VOUCHERS. HE FURT HER SUBMITTED THAT ASSESSEE HAD NOT FILED CONFIRMATIONS OF THE TRANSPO RTERS TO SUPPORT ITS CONTENTION THAT THE EVEN THOUGH THE ASSESSEE HAD NO T DEDUCTED TDS FROM PAYMENTS TO TRANSPORTERS BUT THE TRANSPORTERS HAVE ALREADY PAID THE TAXES. HE FURTHER SUBMITTED THAT AO WAS JUSTIFIED IN WORKING OUT THE DISALLOWANCE ONLY OF THOSE CASES WHERE THE TOTAL PAYMENT IN THE FINANCIA L YEAR WAS IN EXCESS OF RS 50,000/-. HE FURTHER SUBMITTED THAT SINCE ASSESSEE HAD FAILED TO DEDUCT TDS, AO WAS JUSTIFIED IN DISALLOWING THE PAYMENT U/S 40( A)(IA) AND THEREFORE THE ORDER OF A.O BE UPHELD. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT DURING THE YEAR ASSESSEE HA D PAID TRANSPORTATION C.O NO 35/AHD/2009 . A.Y. 2005-0 6 4 CHARGES OF RS 10,25,950/- AND NO TDS U/S 194C WAS D EDUCTED BEFORE MAKING THE PAYMENT. IT IS ALSO A FACT THAT THOUGH THE TOTA L PAYMENT OF TRANSPORTATION CHARGES WAS OF RS 10,25,950/-, AO AFTER CONSIDERING THE FACT THAT THE PAYMENT TO 2 PARTIES IN THE YEAR WAS IN EXCESS OF RS 50,000 AND THE AGGREGATE OF SUCH PAYMENTS WAS RS 2,64,101/-DISALLO WED THE SAME U/S. 40(A)(IA) OF THE ACT. BEFORE US, ASSESSEE APART FRO M ORAL SUBMISSIONS HAS NOT BROUGHT ANY MATERIAL ON RECORD TO DEMONSTRATE THAT THERE WAS NO CONTRACT BETWEEN IT AND THE TRANSPORTERS. BEFORE US, THE LD AR HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF AO AND CIT(A) AND THEREFORE WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CI T(A). THUS THIS GROUND OF ASSESSEE IS DISMISSED. 8. IN THE RESULT THE CO OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 30 - 06 - 2014. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AH MEDABAD