Shri Murtazbhai H. Khanusiyua, Himatnagar V. The Jt. CIT, S.K.Range, Himatnagar

ITA 1059/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5687 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 10-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation

Judgement Text

, * ** *, ,, ,* ** * IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER !# I.T.A. NO.1059/AHD/2014 ( / ASSESSMENT YEAR : 2009-10) SHRI MURTAZBHAI H. KHANUSIYUA 1 ST FLOOR, DIVINE INDIA BUILDING., NEAR RTO OFFICE, HIMATNAGAR. # VS. JOINT COMMISSIONER OF INCOME TAX, S. K. RANGE, HIMATNAGAR. $ # % & # PAN/GIR NO. : ADAPK 7129 D ( !$' / APPELLANTS ) .. ( ($' # RESPONDENTS ) ASSESSEE BY : SHRI SUNIL TALATI, A.R. REVENUE BY : SHRI K. MADHUSUDAN, SR.D.R. ) *+,- / DATE OF HEARING 22/06/2017 ./01+,- / DATE OF PRONOUNCEMENT 27/07/2017 2# O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-VIII, AHMEDABAD , DATED 11/03/2014 , IN THE MATTER OF ASSESSMENT UNDER SECTION(U/S)143(3 ) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER), FOR T HE ASSESSMENT YEAR 2009-10, ON THE FOLLOWING GROUNDS:- ITA NO.1059/ AHD/2014 SHRI MURTAZBHAI H. KHANUSIYUA VS. JCIT ASST.YEAR 2009-10 - 2 - I. LEARNED CIT(A) HAS ERRED IN MAKING AN ADDITION OF RS.12,77,185/-U/S. 40(A)(IA) OF THE INCOME TAX ACT. IT IS SUBMITTED THAT FACTS AND CIRCUMSTANCES OF THE CASE, LOOKING TO THE NATURE AND AMOUNT OF THE PAYMENT AND THE RECIPIENT, THE APPELLANT HAS TO SUBMIT THAT PROVISIONS OF SECTION 40(A)(IA) ARE JUST NOT APPLICABLE. IN VIEW OF THIS, THE ADDITION OF RS.12,77,185/- BE DELETED BOTH ON FACTS AS WELL AS LAW. II. WITH PREJUDICE TO THE ABOVE, LEARNED COMMISSIONER O F INCOME TAX (APPEALS) HAS ERRED IN INCORRECTLY AND ILLEGALL Y HOLDING THAT ASSESSEE WAS LIABLE TO DEDUCT TDS ON THE GROUND THA T HE WAS CONTRACTOR. IT IS SUBMITTED THAT ON THE FACTS AND C IRCUMSTANCES OF THE CASE, IT IS ABSOLUTELY CLEAR THAT APPELLANT IS A SUB-CONTRACTOR AND IS NOT REQUIRED TO DEDUCT TDS UNDER SECTION 194 C OF THE INCOME TAX ACT AS HELD BY HON'BLE INCOME TAX APPELL ATE TRIBUNAL IN HIS OWN CASE. IN VIEW OF THIS, NO DISAL LOWANCE CAN BE MADE U/S. 40(A)(IA). IT IS SUBMITTED THAT DISALLOWA NCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY HON'BLE CIT( A) OF RS.12,77,185/- BE DELETED. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CO NSTRUCTION (ROAD WORK) AND SHOWN TOTAL CONTRACT RECEIPTS OF RS.12,20 ,90,405/- AND SHOWN GROSS PROFIT OF RS.97,79,097/- AND NET PROFIT OF RS .22,38,727/- AFTER DEPRECIATION OF RS.21,82,967/-. THE NET PROFIT SHOW N BY THE ASSESSEE AT RS.44,21,694/- SUBJECT TO DEPRECIATION WORKS OUT AT THE RATE OF 3.62%. IN THE PRECEDING ASSESSMENT YEAR RECEIPTS OF THE ASSES SEE WERE OF RS.12,22,56,992/- AND ITS NET PROFIT SUBJECT TO DEP RECIATION WAS OF RS.38,86,473/- I.E. 3.18%. REGARDING THE NET PROFIT THE ASSESSEE ITA NO.1059/ AHD/2014 SHRI MURTAZBHAI H. KHANUSIYUA VS. JCIT ASST.YEAR 2009-10 - 3 - CONTENDED THAT ASSESSMENTS IN HIS CASE FOR THE A.Y. 2007-08 AND 2008-09 WERE COMPLETED U/S.143(3) AND NOMINAL DISALLOWANCE OF RS.1 LAKH AND RS.75,000/- RESPECTIVELY WERE MADE. 2.2 ON PERUSAL OF THE TAX AUDIT REPORT (COLUMN 27 (B)(I)) IT WAS NOTED THAT THE ASSESSEE HAD NOT DEDUCTED TDS ON SUB -CONTRACT PAYMENTS OF RS.27,25,517/-, WHICH WAS NOT ADDED BACK IN COMP UTATION OF INCOME. THEREAFTER, A SHOW-CAUSE NOTICE WAS ISSUED THAT A S UM OF RS.27,25,513/- MAY NOT BE ADDED TO HIS INCOME. 2.3 THE ASSESSEE VIDE HIS REPLY DATED 29/11/2011 SU BMITTED THAT AS PER CERTIFICATE DATED 21/11/2011 OBTAINED FROM THE CA, TDS HAS NOT BEEN DEDUCTED ON PAYMENT OF RS.12,77,185/- AND ALSO FILE D COPIES OF THE RELEVANT BILLS AND VOUCHERS ETC. ACCORDINGLY THE AM OUNT OF RS.12,77,185/- IS ADDED TO THE INCOME OF THE ASSESS EE U/S.40(A)(IA) OF THE I.T. ACT. 3. AGAINST THE SAID ORDER ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LEARNED CIT(A) WHO DISMISSED THE APPEAL OF THE ASSESSEE. 4. NOW WE HAVE GONE THROUGH THE IMPUGNED ORDER, REL EVANT RECORD AND PAPER BOOK FILED BY THE ASSESSEE. WE HAVE SEEN IN ASSESSMENT ORDER, LEARNED AO IN HIS ORDER, PARA NO.1 HIMSELF H AS MENTIONED THAT ITA NO.1059/ AHD/2014 SHRI MURTAZBHAI H. KHANUSIYUA VS. JCIT ASST.YEAR 2009-10 - 4 - ASSESSEE HAD NOT DEDUCTED TDS ON SUB-CONTRACT PAYME NTS OF RS.27,25,517/-, WHICH WAS NOT ADDED BACK IN COMPUTA TION OF INCOME. ASSESSEE HAS FILED A COPY OF LETTER ISSUED BY AIRP ORT AUTHORITY OF INDIA SHOWING ALLOTMENT OF CONTRACT TO M/S. G.H. VIJAPURA & CO. ASSESSEE HAS ALSO FILED A SUB CONTRACT AGREEMENT BE TWEEN M/S. G.H. VIJAPURA & CO. AND M/S. M.H. KHANSUIYA (PROPRI ETARY FIRM OF THE APPELLANT). ASSESSEE HAS ALSO FILED COPY OF AUDITED ACCOUNTS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. ASSESSEE HAS FILED A DECISION OF COORDINATE BENCH I N HIS OWN CASE IN ITA NO.1856/AHD/2009 FOR ASSESSMENT YEAR 2006-07 , IN THIS CASE, ASSESSEE HAS PERFORMED AS A SUB CONTRACTOR. 5. IN VIEW OF THE ABOVE OBSERVATION, WE ARE OF THE CONSIDERED OPINION THAT SECTION 40(A)(IA) ARE NOT APPLICABLE IN THE CA SE OF ASSESSEE AS HE IS A SUB CONTRACTOR. THEREFORE, GROUND NO.1 IS ALLOWED A ND ADDITION OF RS.12,77,185/- IS DELETED. ITA NO.1059/ AHD/2014 SHRI MURTAZBHAI H. KHANUSIYUA VS. JCIT ASST.YEAR 2009-10 - 5 - 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 27/07/2017 1. DATE OF DICTATION 11/04/2017(DICTATION-PAD 4 PAGE S ATTACHED AT THE END OF THIS APPEAL-FILE) DATE ON WHICH THE TYPED DRAFT IS PLACED SD/- SD/- ( ) 3 4 ( N.K. BILLAIYA ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 27/07/2017 PRITI YADAV, SR.PS !'# $#! # COPY OF THE ORDER FORWARDED TO : 1. !$' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 56, ) 7, / CONCERNED CIT 4. ) 7, 3!4 / THE CIT(A)-, VIII, AHMEDABAD. 5. 89:,56 !-!561 ! / DR, ITAT, AHMEDABAD 6. :;<* # GUARD FILE. % & / BY ORDER, (8,, //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD TRUE COPY