ABC Carriers, Bhubaneswar V. ITO, Bhubaneswar

ITA 101/CTK/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7603 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-10-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 25-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY CHARAN ROUT
• Assessee Lawyers: P R MOHANTY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N. S SAINI, ACCOUNTANT MEMBER ITA NO.101/CTK/2014 ASSESSMENT YEAR : 2009 - 2010 ABC CARRIERS, PLOT NO.16A, BJB NAGAR, BHUBANESWAR. VS. ITO, - 1(2), BHUBANESWAR. PAN/GIR NO. AAKFA 1567 C (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI P.R.MOHANTY, AR REVENUE BY : SHRI ABHAY CHARAN ROUT , DR DATE OF HEARING : 21 /10 / 2016 DATE OF PRONOUNCEMENT : 21 /10 / 2016 O R D E R THIS I S AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - BERHAMPUR DATED 16.12.2013 , FOR THE ASSESSMENT YEAR 2009 - 2010 . 2. GROUND NOS.1 & 4 ARE GENERAL IN NATURE AND HENCE, REQUIRE NO ADJUDICATION. 3. IN GROUND NO.2 OF APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD CIT(A) ERR ED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER IN SUSTAINING THE ADDITION OF ENTIRE ALLEGED GROSS BILL OF RS.3,76,371/ - . 2 ITA NO.101/CTK/2014 ASSESSMENT YEAR :2009 - 2010 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS DISCLOSED GROSS RECEIPTS FROM TRANSPORTAT ION BUSINESS AT RS.3,08,53,773/ - BUT AS PER 26AS STATEMENT, THE GROSS RECEIPT OF THE ASSESSEE WAS RS.3,12,30,144/ - . THEREFORE, THE ASSESSING OFFICER ADDED THE DIFFERENTIAL AMOUNT OF RS.3,76,371/ - (RS.3,12,30,144 RS.3,08,53,773/ - ) TO THE INCOME OF THE A SSESSEE AS SUPPRESSED RECEIPTS. 5. ON APPEAL, THE LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 6. LD A.R. OF THE ASSESSEE HAS RELIED UPON THE DECISION OF THE CUTTACK ITAT IN THE CASE OF R.R. CARRYING CORPORATION VS ACIT, 30 DTR 569, WHEREIN, I T WAS HELD THAT IN CASE OF DIFFERENCE BETWEEN THE GROSS RECEIPTS AS SHOWN IN THE ASSESSEES BOOKS AND AS PER TDS CERTIFICATE, ADDITION COULD BE MADE ONLY IN RESPECT OF PROFITS EMBEDDED THEREIN.. 7. ON THE OTHER HAND, LD D.R. RELIED ON THE ORDERS OF LOWER A UTHORITIES. 8. AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT IN THE INSTANT CASE ALSO, THERE IS DIFFERENCE BETWEEN THE GROSS CONTRACT RECEIPTS SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AND AS SHOWN IN FORM 26AS . THE DIFFERENCE IS OF RS.3,76,371/ - , WHICH HAS BEEN TREATED AS INCOME OF THE ASSESSEE IN ITS ENTIRETY. THEREFORE, THE DECISION OF CO - ORDINATE BENCH IN THE CASE OF R.R.CARRYING CORPORATION (SUPRA) IS SQUARELY APPLICABLE TO THE FACTS OF THE ASSESSEES CA SE. I, THEREFORE, SET ASIDE THE ORDERS OF LOWER AUTHORITIES 3 ITA NO.101/CTK/2014 ASSESSMENT YEAR :2009 - 2010 AND DIRECT THE ASSESSING OFFICER TO ASSESS THE INCOME OF THE ASSESSEE THE DIFFERENTIAL AMOUNT OF CONTRACT RECEIPT OF RS.3,76,371/ - @ 0.99% OF THE GROSS CONTRACT RECEIPT AS DISCLOSED BY THE ASSESS EE IN THE RETURN OF INCOME. THUS, THIS GROUND IS ALLOWED. 9. IN GROUND NO.3 OF APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,58,000/ - U/S.40(A)(IA) OF THE ACT. 10. I HAVE HEARD THE RIVAL SUBMISSIONS A ND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS PAID RS.1,58,000/ - TO M/S. PANDA BROTHERS, WHICH INVOLVED LABOUR WORK OF RS.1,19,000/ - AND THUS ULTIMATELY CONSTITUTED A WORK CONTRACT AND THE ASSESSEE WAS REQUIRED TO DEDUCT TDS FROM THE PAYMENTS MADE. SINCE THE ASSESSEE FAILED TO DO SO, THE ASSESSING OFFICER, BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, DISALLOWED RS.1,58,000/ - , WHICH WAS CONFIRMED IN APPEAL BY THE LD CI T(A). 11. BEFORE ME, LD A.R. OF THE ASSESSEE SUBMITTED THAT THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VICTOR SHIPPING SERVICES (P) LTD., (2013) 357 ITR 642(ALL), WHEREIN, IT HAS BEEN HELD THAT FOR DISALLOWING EXPENSES FROM BUSINESS AND PROFE SSION ON THE GROUND THAT TAX HAS NOT BEEN DEDUCTED AT SOURCE, THE AMOUNT SHOULD BE PAYABLE AND NOT IT HAS BEEN PAID BY THE END OF THE YEAR. HE FURTHER SUBMITTED THAT THE SLP FILED AGAINST THE 4 ITA NO.101/CTK/2014 ASSESSMENT YEAR :2009 - 2010 JUDGMENT OF HONBLE ALLAHABAD HIGH COURT HAS BEEN DISMISSED BY T HE HONBLE SUPREME COURT VIDE JUDGMENT DATED 2.7.2014 IN CC NO.(S) 8068/2014. HE SUBMITTED THAT THE ASSESSEE HAS MADE PAYMENTS OF RS.1,58,000/ - TO M/S. PANDA BROTHERS AND NO AMOUNT WAS OUTSTANDING AND PAYABLE. THEREFORE, IN VIEW OF THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF VICTOR SHIPPING SERVI C ES (P) LTD (SUPRA), NO DISALLOWANCE U/S.40(A)(IA) WAS WARRANTED IN THE CASE OF THE ASSESSEE. HE SUBMITTED THAT WHERE THERE ARE CONTRARY DECISIONS OF HONBLE HIGH COURTS ON AN ISSUE AND NONE OF WHICH IS HONBLE JURISDICTIONAL HIGH COURT, THEN THE DECISION IN FAVOUR OF THE ASSESSEE SHOULD BE FOLLOWED IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS.VEGETABLE PRODUCTS LTD., 88 ITR 192 (SC). 12. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT THERE IS NO AMOUNTING OUTSTANDING AND PAYABLE AT THE END OF THE YEAR. THEREFORE, I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. V ICTOR SHIPPING SERVICES (P) LTD(SUPRA) DELETE THE DISALLOWANCE OF RS.1,58,000/ - MADE U/S.40(A)(IA) OF THE ACT. THIS GROUND IS ALLOWED. 5 ITA NO.101/CTK/2014 ASSESSMENT YEAR :2009 - 2010 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 21 /10 /2016 IN THE PRESENCE OF PARTIES. SD/ - ( N. S SAINI ) A CCOUNTANT MEMBER CUTTACK; DATED 21 /10 /2016 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK 1. THE APPELLANT : ABC CARRIERS, PLOT NO.16A, BJB NAGAR, BHUBANESWAR . 2. THE RESPONDENT. ITO, - 1(2), BHUBANESWAR 3. THE CIT(A) - 1 , BHUBANESWAR. 4. CIT , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//