Shri Rochi Ram Khatri, Ujjain V. The ITO Ward 1(1), Ujjain

ITA 105/IND/2013

• Counselvise Citation: 10522714 RSA 2013
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 15-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G S GAUTAM
• Assessee Lawyers: S S DESHPANDE
• Keywords: Additional evidence; Question of law
• Section: 194C

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 105/IND/2013 A.Y.2009-10 ROCHI RAM KHATRI UJJAIN PAN AKPPK-6497E :: APPELLANT VS INCOME TAX OFFICER 1(1) UJJAIN :: RESPONDENT APPELLANT BY SHRI S.S. DESHPANDE RESPONDENT BY SHRI G.S. GAUTAM DATE OF HEARING 20.8.2013 DATE OF PRONOUNCEMENT 20.08.2013 O R D E R PER JOGINDER SINGH , JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER DATED 26.12.2012 OF THE LEARNED CIT(A). THE ONLY G ROUND PRESSED BY THE ASSESSEE AT THE TIME OF HEARING IS THAT THE LEARNED CIT(A) 2 WAS NOT JUSTIFIED IN NOT CONSIDERING THE GROUND THA T THE ASSESSEE IS MAKING THE PAYMENT TO THE LABOURS ON WEEKLY BASI S THROUGH VARIOUS PERSONS AND THERE WAS NO CONTRACT BETWEEN T HE ASSESSEE AND THESE PERSONS. AS SUCH, THE PROVISIONS OF SECTI ON 4(A)(IA) OF THE ACT ARE NOT APPLICABLE. THE REMAINING GROUNDS, RAISED IN THE GROUND OF APPEAL, WERE NOT PRESSED BY THE LEARNED C OUNSEL FOR THE ASSESSEE, THEREFORE, GROUND NOS. 3 AND 4 ARE DISMIS SED BEING NOT PRESSED. 2. DURING HEARING, WE HAVE HEARD SHRI S.S. DESHPAND E, LEARNED COUNSEL FOR THE ASSESSEE, AND SHRI G.S. GAU TAM, LEARNED SENIOR DR. SHRI DESHPANDE SUBMITTED BEFORE US THAT SINCE THE PAYMENT IS ACTUALLY MADE BY THE ASSESSEE TO THE LAB OURS THROUGH THE AGENT, THE PROVISIONS OF SECTION 40(A)(IA) OF T HE ACT ARE NOT APPLICABLE TO THE CASE OF THE ASSESSEE. THE ASSESS EE HAS ALSO FILED AFFIDAVITS FROM THE CLAIMED AGENTS MENTIONING THAT THESE PERSONS ARE WORKING AS AGENTS FOR THE ASSESSEE AND NOT THE CONTRACTORS. ON THE OTHER HAND, THE LEARNED SENIOR DR CONTENDED THAT THIS IS MERELY AN AFTER-THOUGHT, THEREFORE, THE CONCLUSION DRAWN IN THE IMPUGNED IS PERFECTLY IN ORDER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE 3 ASSESSEE DERIVES INCOME FROM MANUFACTURING OF POWER LOOM AND DURING THE RELEVANT PERIOD DEBITED RS.29,60,750/- U NDER THE HEAD WEAVING EXPENSES FOR WEAVING WORK DONE BY TH E WEAVERS AS JOB WORK. AS PER THE REVENUE, NO TAX WAS DEDUCT ED AT SOURCE BY THE ASSESSEE. THE ASSESSING OFFICER VIDE LETTER DATED 14.11.2011 ASKED THE ASSESSEE AS TO WHY THE CLAIMED EXPENSES SHOULD NOT BE DISALLOWED IN CONTRAVENTION TO SECTIO N 40(A)(IA) OF THE ACT. THE ASSESSEE IN ITS REPLY DATED 8 TH DECEMBER, 2011 CLAIMED THAT THE ASSESSEE IS DOING THE BUSINESS OF MANUFACTURING OF CLOTH AND WEAVING WHICH IS DONE BY LABOURS. THE SE LABOURS WERE CLAIMED TO BE DAILY WAGERS AND USED TO MAKE TH E PAYMENT ON WEEKLY BASIS, THEREFORE, THESE CANNOT BE TERMED AS CONTRACT WORK. THE ASSESSEE PLACED RELIANCE ON THE DECISION FROM HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DEWANCHAND (2009) 17 DTR (DEL) 337, WHEREIN IT WAS HELD THAT PAYMENT TO CONTRACTOR VIS-A-VIS DAILY WAGES EMPLOYEE CANNOT BE TERMED AS CONTRACTUAL PAYMENT, HENCE, THE ASSESSEE IS NOT REQUIRED TO DED UCT TAX AT SOURCE U/S 194C. THE LEARNED ASSESSING OFFICER DID NOT ACCEPT THIS PLEA OF THE ASSESSEE ON THE PREMISE THAT SINCE THE WORK WAS GOT DONE THROUGH 12 PERSONS ONLY AND NO OTHER NAME WAS REFLECTED IN THE BOOKS OF ACCOUNTS, THE COMPLETE TR ANSACTION WITH 4 REGARD TO PAYMENT ON ACCOUNT OF WEAVING EXPENSES WA S POSTED AT PAGES 361 TO 669 OF THE CASH BOOK AND PAGES 118 TO 141 OF THE LEDGER. THE ASSESSEE WAS FOUND UNDER DEFAULT FOR NO T DEDUCTING THE TAX AT SOURCE ON WEAVING EXPENSES DEBITED, THUS , THE AMOUNT OF RS.28,87,093/- WAS DISALLOWED AND ADDED BACK TO THE RETURNED INCOME. ON APPEAL, THE LEARNED CIT(A) AFFIRMED THE STAND OF THE LEARNED ASSESSING OFFICER. THE AGGRIEVED ASSESSEE I S IN APPEAL BEFORE THE TRIBUNAL. 3.1 BEFORE US, THE ASSESSEE HAS FILED AFFIDAVITS FR OM 6 PERSONS, NAMELY, SHRI KHUMAN SINGH, SHALIGRAM YADAV, BABULAL SOLANKI, KAMRUDDIN KHAN, MUNNALAL MALVIYA AND SHANKARLAL PAR MAR CLAIMING THAT THESE PERSONS WERE WORKING AS MUKADAM AND WERE GETTING THE WORK DONE ON LABOUR BASIS OF POWER LOOM CLOTH FOR THE ASSESSEE. THEREFORE, THE PROVISIONS OF SECTION 40(A )(IA) ARE NOT APPLICABLE AND FURTHER THERE IS NO LIABILITY OF DED UCTION OF TAX AT SOURCE AS PROVIDED U/S 194C OF THE ACT. BEFORE COMI NG TO ANY CONCLUSION, WE ARE SUMMARISING HEREUNDER THE DETAIL S OF WEAVING EXPENSES PAID TO LABOURS :- 5 S.NO. PARTICULARS AMOUNT PAID DURING THE YEAR AMOUNT REMAINED PAYABLE AS ON 31.3.2012 REMARK 1 MUNNA LAL MALVIYA 263,261 NIL - 2 BABU LAL SOLANKI 2,33,824 NIL - 3 KHUMAN SINGH 4,06,815 NIL - 4 AHMED TEXTILES 2,46,010 NIL - 5 SHANKAR LAL PARMAR 1,50,464 NIL - 6 SUDHIR KHATRI 18,957 NIL BELOW 50,000 7 MAHAKAL TEXTILES 2,87,285 NIL - 8 TAWDE SCREEN PRINTERS 1,48,832 4,110 - 9 METHYL TEXTILES 4,54,117 NIL - 10 SHWETA TEXTILES 30,298 NIL BELOW 50,000 11 ZAKIR BHAI 1,34,184 NIL - 12 MUKESH KUMAR 5,62,300 NIL - 13 OTHERS (KHERCHI) 24,402 NIL BELOW 50,000 TOTAL 29,60,750 4,110 THE ASSESSEE HAS ALSO TAKEN THE PLEA THAT THERE IS NO CONTRACT BETWEEN THE ASSESSEE AND THE LABOURS, THEREFORE, TH E PROVISIONS OF SECTION 194C OF THE ACT ARE NOT ATTRACTED. WE FIN D THAT THE ASSESSEE DEBITED RS. 29,60,750/- UNDER THE HEAD WE AVING EXPENSES FOR WEAVING WORK DONE BY THE WEAVERS ON W HICH NO TAX WAS DEDUCTED BY THE ASSESSEE. THE STAN D OF THE ASSESSEE IS THAT THE WORK IS GOT DONE ON DAILY WAGE S AND PAYMENT IS MADE ON WEEKLY BASIS WHICH IS CALLED HAFTE KE H AFTE, THEREFORE, IT CANNOT BE TERMED AS CONTRACT AS THERE WAS NO 6 AGREEMENT WITH THE ASSESSEE. THE FACT REMAINS THAT THE WEAVING WORK WAS GOT DONE THROUGH THE PERSONS/LABOUR AGAINS T WHICH PAYMENT HAS BEEN MADE AS SUMMARISED ABOVE. BEFORE U S THE ASSESSEE HAS TAKEN A NEW PLEA THAT WEAVING WORK WAS GOT DONE THROUGH AGENTS. THERE IS CATEGORICAL FINDING IN TH E ASSESSMENT ORDER THAT THE WEAVING WORK WAS GOT DONE FROM 12 PERSONS/PARTIES, THE DETAILS OF WHICH HAVE BEEN SUM MARISED AT PAGE 4 OF THE ASSESSMENT ORDER. EVEN BEFORE US THE AFFIDAVITS FROM 6 PERSONS HAVE BEEN FILED AGAINST THE 12 PERSO NS CLAIMED BY THE ASSESSEE. THE MUTE QUESTION TO BE DECIDED IS WH ETHER THE ASSESSEE WAS LIABLE TO DEDUCT TDS ON THE PAYMENTS S O MADE. UNDISPUTEDLY, NO TDS WAS DEDUCTED BY THE ASSESSEE A ND THE COMPLETE TRANSACTION WITH REGARD TO PAYMENT ON ACCO UNT OF WEAVING EXPENSES WAS POSTED IN THE CASH BOOK/LEDGER . THUS, THE CONTENTION OF THE ASSESSEE THAT WEAVING WORK WAS GO T DONE THROUGH AGENTS IS NOT SUBSTANTIATED. SINCE THE ASS ESSEE HAS FAILED TO DEDUCT TAX AT SOURCE ON RS. 28,87,093/-, WE FIND NO INFIRMITY IN MAKING THE ADDITION. 3.2 SO FAR AS ADMISSION OF ADDITIONAL EVIDENCE IN T HE FORM OF AFFIDAVITS FILED BEFORE US FOR THE FIRST TIME IS CO NCERNED, THE SAME CANNOT BE ENTERTAINED BEING NEW FACTS FILED BEFORE US. THE FACTS 7 WHICH ARE NOT EMERGING FROM THE ORDERS OF THE LOWER AUTHORITIES CANNOT BE ENTERTAINED BY THE TRIBUNAL. ONLY IF IT IS A QUESTION OF LAW THEN THE TRIBUNAL IS EMPOWERED TO ENTERTAIN EVE N IF IT IS NOT RAISED BEFORE THE LOWER AUTHORITIES. ACCORDINGLY, T HE FACTS MENTIONED IN THE AFFIDAVIT FILED BY THE ASSESSEE, W HICH ARE CONTRARY TO FACTS ON RECORD AND THE FINDINGS OF THE LOWER AUTHORITIES, CANNOT BE ENTERTAINED AT THIS STAGE. I N THIS VIEW OF THE MATTER, THE AFFIDAVITS FILED BY THE ASSESSEE AR E NOT ADMITTED. THE LEARNED CIT(A) HAS ALREADY DISCUSSED VARIOUS JU DICIAL PRONOUNCEMENTS WHICH ARE NOT BEING REPEATED BEING A MATTER OF RECORD. EVEN OTHERWISE, WE FIND THAT THE ASSESSEE F ILED ITS RETURN ON 8.9.2009 AND THE ASSESSMENT ORDER WAS PASSED ON 16.12.2011, THEREFORE, THERE WAS SUFFICIENT TIME WI TH THE ASSESSEE EITHER TO TAKE PLEA WHICH WAS TAKEN BEFORE US OR TO SUBSTANTIATE HIS CLAIM BY PRODUCING THE CLAIMED AGENTS BUT THAT WAS NOT DONE. IT SEEMS TO BE CLEARLY AN-AFTER THOUGHT TO COME OUT OF THE CLUTCHES OF THE RIGOURS OF THE SECTION. WE FURTHER NOTE THAT FIRST APPEAL WAS FILED BEFORE THE LEARNED CIT(A) AND NO S UCH PLEA WAS TAKEN THERE. EVEN IN PARA 3.2 OF THE ORDER OF THE L EARNED CIT(A) IT HAS BEEN MENTIONED THAT THE LABOUR WORK ON DAILY WA GES BASIS BUT THERE IS NO ARGUMENT LIKE PAYMENT THROUGH AGENT S. IN VIEW OF 8 THESE FACTS, WE ARE OF THE VIEW THAT THE ASSESSEE W AS LIABLE TO DEDUCT TAX ON THE PAYMENTS MADE TO THE WEAVERS DURI NG THE RELEVANT PERIOD WHICH HE HAS FAILED TO DO. WE, THER EFORE, AFFIRM THE CONCLUSION DRAWN IN THE IMPUGNED ORDER. FINALLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COU RT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 20.8.2013. SD SD (R.C.SHARMA) (JOGINDER SINGH ) ACCOUNTANT MEMBER JUDICIAL ME MBER DATED: 21.8.2013 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/-2021