Deputy Commissioner of Income-tax, V. M/s. Praj Industries Ltd., Pune

ITA 1027/PUN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0757 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 08-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 15-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 133A; 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA , AM . / ITA NO. 1 027 /PN/201 4 / ASSESSMENT YEAR : 20 0 7 - 08 THE DY. COMMISSIONER OF INCOME TAX (TDS) - 2 , PUNE . / APPELLANT VS. M/S. PRAJ INDUSTRIES LTD., PRAJ HOUSE, BAVDHAN, PUNE 4110 21 . / RESPO NDENT PAN: AA A CP6090Q / APPELLANT BY : S HRI PANKAJ GARG / RESPONDENT BY : SHRI C.H. NANIWADEKAR / DATE OF HEARING : 08 . 1 2 .2015 / DATE OF PRONOUNCEMENT: 17 .1 2 .2015 DATE OF HEARING : 08 . 1 2 .2015 DATE OF PRONOUNCEMENT: 17 .1 2 .2015 / OR DER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT (A) - V , PUNE , DATED 12 . 0 2 .20 1 4 RELATING TO ASSESSMENT YEAR 20 0 7 - 08 AGAINST ORDER PASSED UNDER SECTION 201(1) & 201(1A ) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1 ) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN HOLDING THAT PROVISIONS OF SECTION 194I ARE NOT APPLICABLE IN RESPECT OF CRANE HIRE CHARGES WITHOUT APPRECIATING THE FACTS THAT AS PER THE AMENDED PROVISIONS OF SECTION 194I W.E.F. 13.07.2006, THE RENT IN RESPECT OF MACHINERY, PLANT OR EQUIPMENT ETC. WERE BROUGHT INTO THE AMBIT OF SECTION 194I. 2) THE A PPELLANT CRAVES LEAVE TO AMEND OR ALTER THE GROUND OF APPEAL OR ADD A NEW GROUND WHICH MAY BE NECESSARY AT THE TIME OF THE HEARING OF THE CASE THEREAFTER . ITA NO. 1 027 /PN/20 1 4 M/S. PRAJ INDUSTRIES LTD. 2 3) THE ORDER OF THE LEARNED CIT(A) BEING ERRONEOUS BE SET ASIDE AND A.OS ORDER RESTORED ON THIS ISSUE. 3. THE LEARNED AUTHORIZED REPRESENTATIVE FOR T HE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN BHARAT FORGE LTD. VS. ADDL.CIT (2013) 154 TTJ 649 . THE ISSUE RAISED IN THE PRESENT APPEAL IS IN RELATION TO APPLICABILITY OF THE PROVISIONS OF SECTION 194I OF THE ACT ON CRANE HIRE CHARGES. 4. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF DISTILLERY AND BREWERY EQUIPMENT AND SUPPLY OF ENGINEERING SOFTWARE, ETC. A TDS SU RVEY UNDER SECTION 133A OF THE ACT WAS CARRIED OUT AT THE PREMISES OF ASSESSEE ON 14.03.2008. DURING THE SURVEY, STATEMENT OF SHRI M.M. KADAM, ASSISTANT MANAGER, ACCOUNTS WAS RECORDED. THE ASSESSING OFFICER NOTED THAT THERE WERE SEVERAL TDS DISCREPANCIES OF SHORT DEDUCTION / NON - DEDUCTION . CONSEQUENT TO WHICH, SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE. THE ASSESSEE WAS GIVEN SHOW CAUSE NOTICE FOR SHORT DEDUCTION UNDER SECTION 194J OF THE ACT OUT OF PROFESSIONAL CHARGES AND INSPECTION CHARGES. THE AS SESSEE FAILED TO FILE AN EXPLANATION, DESPITE SEVERAL OPPORTUNITIES BEING GIVEN. BESIDES THE ISSUE OF SHORT DEDUCTION, THE ASSESSING OFFICER NOTED THAT THERE WAS ISSUE OF NON - PAYMENT OF TAX DEDUCTED AT SOURCE AND ALSO NON - DEDUCTION OF TAX OUT OF CRANE HIR E CHARGES. IN VIEW THEREOF, THE ASSESSING OFFICER HELD THE ASSESSEE LIABLE FOR TAX UNDER SECTION 201(1) AND INTEREST UNDER SECTION 201(1A) OF THE ACT FOR FINANCIAL YEARS 2006 - 07 AND 2007 - 08. THE ASSESSING OFFICER RAISED THE DEMAND UNDER SECTION 201(1) OF THE ACT AT RS. 5,68,437/ - AND INTEREST UNDER SECTION UNDER SECTION 201(1A) OF THE ACT AT RS. 3,06,956/ - RELATING TO FINANCIAL YEAR 2006 - 07 IN RESPECT OF ALL DEFAULTS AND SIMILAR DEMAND UNDER SECTION 201(1) OF THE ACT IN RESPECT OF FINANCIAL YEAR 2007 - 08. H OWEVER, THE PRESENT APPEAL IS IN RELATION TO FINANCIAL YEAR 2006 - 07, ITA NO. 1 027 /PN/20 1 4 M/S. PRAJ INDUSTRIES LTD. 3 HENCE REFERENCE IS MADE TO THE DEMAND RAISED FOR THE PRESENT ASSESSMENT YEAR. 5. THE CIT(A) NOTED THAT IN RESPECT OF CRANE HIRE CHARGES, THE DEMAND WAS RAISED UNDER SECTION 201(1) AND 201(1A) OF THE ACT BY APPLYING THE PROVISIONS OF SECTION 194I OF THE ACT INSTEAD OF SECTION 194C OF THE ACT APPLIED BY THE ASSESSEE. THE ASSESSEE HAD DEDUCTED TAX AT SOURCE @ 2% IN RESPECT OF CRANE HIRE CHARGES. HOWEVER, IN VIEW OF THE AMENDMENT TO THE D EFINITION OF RENT W.E.F. 13.07.2006, AS PER WHICH, RENT INCLUDE S RENT ON PLANT, THE ASSESSING OFFICER APPLIED PROVISIONS OF SECTION 194I OF THE ACT AND WORKED OUT THE DEMAND UNDER SECTION 201(1) OF THE ACT AT RS. 3,09,232/ - AND CHARGED INTEREST UNDER SECTIO N 201(1A) OF THE ACT AT RS. 1,66,985/ - . THE CIT(A) RELYING ON THE RATIO LAID DOWN BY THE PUNE BENCH OF TRIBUNAL IN BHARAT FORGE LTD. VS. ADDL.CIT ( SUPRA), DELETED THE DEMAND RAISED UNDER SECTION 201(1) AND INTEREST CHARGED UNDER SECTION 201(1A) OF THE ACT IN RESPECT OF CRANE HIRE CHARGES . THE RELEVANT PORTION OF THE ORDER OF TRIBUNAL IS REPRODUCED UNDER PARA 7 AT PAGES 4 TO 6 OF THE APPELLATE ORDER. THE BALANCE DEFAULT WAS UPHELD BY THE CIT(A). 6. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN BHARAT FORGE LTD. VS. ADDL.CIT (SUPRA). THE ISSUE ARISING BEFORE US IS WHETHER THE PROVISIONS OF SECTION 194C OF THE ACT ARE TO BE APPLIED TO THE CRANE SERVICES PAID BY THE ASSESSEE OR THE AMENDED PROVISIONS OF SECTION 194I OF THE ACT ARE TO BE APPLIED. THE SAID AMENDMENT CAME INTO EFFECT FROM 13.07.2006 , UNDER WHICH THE DEFINITION OF RENT WAS AMENDED TO INC LUDE THE RENT ON PLANT AS DEFINED IN SECTION 43(3) OF THE ACT. THE YEAR UNDER APPEAL IS FINANCIAL YEAR 2006 - 07 I.E. ITA NO. 1 027 /PN/20 1 4 M/S. PRAJ INDUSTRIES LTD. 4 UP TO 31.03.2006 , HENCE, THE AMENDED PROVISIONS OF SECTION 194I ARE NOT ATTRACTED. THE ASSESSEE WAS DUTY BOUND TO DEDUCT TAX AT SOURCE UND ER THE PROVISIONS OF SECTION 194C OF THE ACT @ 2% OUT OF CRANE HIRE CHARGES. THE ASSESSEE HAD DEDUCTED THE SAID TAX AT SOURCE @ 2%, HENCE, THERE IS NO DEFAULT ATTRIBUTABLE TO THE ASSESSEE IN THIS REGARD. FOLLOWING THE RATIO LAID DOWN BY THE PUNE BENCH OF TRIBUNAL IN BHARAT FORGE LTD. VS. ADDL.CIT (SUPRA), WE UPHOLD THE ORDER OF CIT(A), WHO HAS REPRODUCED THE RELEVANT PORTION OF THE ORDER OF TRIBUNAL AND THE SAME IS NOT BEING REPRODUCED FOR THE SAKE OF BREVITY. UPHOLDING THE ORDER OF CIT(A), WE DISMISS TH E GROUNDS OF APPEAL RAISED BY THE REVENUE. 8 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED ORDER PRONOUNCED ON THIS 17 TH DAY OF DECEMBER , 2015. SD/ - SD/ - (PRADIP KUMAR KEDIA) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 17 TH DECEMBER , 2015 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - V , PUNE ; 4. / THE CIT (TDS) , PUNE ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE