M/s. J.D. Chunder & Co., Kolkata V. ITO, Ward-31(2), Kolkata, Kolkata

ITA 1075/KOL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99751 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 28-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 20-07-2012
• Court: TRIBUNAL
• Department Lawyers: AMITABHA CHOUDHURY
• Assessee Lawyers: S P CHOUDHURY
• Keywords: Retrospective amendment
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOLKATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI M. BALAGANESH, AM ] I.T.A NO. 1 07 5 / KOL /201 2 ASSESSMENT YEAR : 200 9 - 1 0 M/S. J. D. CHUNDER & CO. VS. INCOME - TAX OFFICER, WD - 31(2), KOLKATA. (PAN: AACFJ4125F) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 2 5 .0 8 .2015 DATE OF PRONOUNCEMENT: 14 . 0 9 . 2015 FOR THE APPELLANT: S/ S HRI S. P. CHOUDHURY & SOUMITRA CHOUDHURY, ADVOCATES FOR THE RESPONDENT: S HRI AMITABHA CHOUDHURY, ADDL. CIT ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A) - X I X , KOLKATA IN APPEAL NO. 183 / CIT(A) - X I X /ITO,WD - 31(2)/KOL/11 - 12 DATED 15 . 0 5 .2012 . ASSESSMENT WAS FRAMED BY ITO, WARD - 31(2) , KOLKATA U/S. 143(3) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) FOR AY 200 9 - 1 0 VIDE ITS ORDER DATED 2 1 . 12 .20 1 1 . 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF AO IN MAKING DISALLOWANCE OF JOB CHARGES AMOUNTING TO RS.27,76,823/ - FOR NON - DEDUCTION OF TDS U/S. 194C OF THE ACT THEREBY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE CLAIMED FOLLOWING EXPENSES AMOUNTING TO RS.21,76,823/ - : I) PRINTING CHARGES RS.13,37,030/ - II) BINDING CHARGES RS. 5,46,544/ - III) LAMINATION CHARGES RS. 1,20,247/ - IV) PRO CESSING CHARGES RS. 95,316/ - V) DESIGN & DRAWING CHARGES RS. 77,686/ - RS. 21,76,823/ - THE AO REQUIRED THE ASSESSEE AS TO WHY THESE EXPENSES BE NOT DISALLOWED AS THE ASSESSEE FAILED TO DEDUCT TDS U/S. 194C OF THE ACT AND ACCORDING TO AO , THE PROVISIONS 2 ITA NO.1075/KOL/2012 M/S. J. D. CHUNDER & CO. AY 2009 - 10 OF SECTION 40(A)(IA) OF THE ACT ARE APPLICABLE IN THIS CASE. AS THE ASSESSEE FAILED TO DEDUCT TDS THE AO MADE DISALLOWANCE. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO ALSO CONFIRMED THE ACTION OF AO. AGGRIEVED, NOW ASSESSEE IS IN SECOND APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BEFORE US LD. COUNSEL FOR THE ASSESSEE FIRST OF ALL TRIED TO ARGUE THAT THE ASSESSEE IS NOT LIABLE TO DEDUCT TDS U/S. 194C OF THE ACT FOR THE REASON THAT THESE PRINTING CHARGES, BINDING CHARGES, LAMINATION CHARGES, PROCESSING CHARGES AND DESIGN AND DRAWING CHARGES ARE NOTHING BUT IT INCLUDES SUPPLY OF MATERIAL AND SEC. 194C OF THE ACT HAS BEEN AMENDED AND WHERE SUPPLY CONTRACT IS THERE, THE PROVISIONS OF SECTION 194C OF THE ACT WILL NOT APPLY. BUT WHEN LD. COUNSEL FOR THE ASSESSEE WAS CONFRONTED TO PRODUCE THE EVIDENCE THAT THESE JOB WORK CHARGES ARE INCLUDED IN THE SUPPLY OF MATERIAL, HE FAIRLY CONCEDED THE POSITION BUT HE ONLY MADE A PLEA THAT LET THE ISSUE BE REMITTED BACK TO THE FILE OF AO. IN VIEW OF THE ARGUMENT OF ASSESSEE S COUNSEL THAT THE PAYMENT HAS BEEN TAKEN INTO ACCOUNT BY RECIPIENTS WHILE COMPUTING INCOME OF RESPECTIVE RECIPIENTS AND VERIFICATION OF PAYMENT OF TAX IN RESP ECT OF SUCH INCOME CAN BE VERIFIED BY THE AO. WE FIND THAT THIS ISSUE IS NOW COVERED BY THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SANTOSH KUMAR KEDIA VS. ITO, ITA NO. 1905/KOL/2014, AY 2007 - 08 DATED 04.03.2015, WHEREIN VIDE PARA 10 OF ITS ORDER IT HAS BEEN HELD AS UNDER: 10. SECONDLY, I AM OF THE VIEW THAT THE INSERTION OF SECOND PROVISO TO SEC. 40(A)(IA) OF THE ACT IS CURATIVE AND IT HAS RETROSPECTIVE EFFECT W.E.F. 1 ST APRIL, 2005, BEING A DATE FROM WHICH SEC. 40(A)(IA) OF THE ACT WAS INSERTED BY THE FINANCE (NO. 2) ACT, 2004. IN VIEW OF THIS, I AM OF THE VIEW THAT MATTER NEEDS FRESH ADJUDICATION IN THE LIGHT OF THE FACT THAT THE AO WILL CARRY OUT NECESSARY VERIFICATIO N IN REGARD TO RELATED PAYMENTS HAVING BEEN TAKEN INTO ACCOUNT BY THE RECIPIENT IN COMPUTATION OF ITS INCOME AND VERIFICATION OF PAYMENT OF TAXES IN RESPECT OF SUCH INCOME AND ALSO FILING OF INCOME TAX RETURN BY THE RECIPIENT. IN TERM OF THE ABOVE, THE SE COND ASPECT ARGUED BY LD. COUNSEL IS RESTORED BACK TO THE FILE OF THE AO AND ASSESSEE WILL PROVIDE ALL THE DETAILS IN TERMS OF SECOND PROVISO TO SEC. 40(A)(IA) OF THE ACT. IN TERMS OF THE ABOVE, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE ISSUE BA CK TO THE FILE OF AO IN VIEW OF THE ARGUMENT OF ASSESSEE S COUNSEL FOR VERIFICATION OF PAYMENT OF TAX IN RESPECT OF SUCH INCOME WHETHER THE SAME IS INCLUDED BY THE RECIPIENTS IN THEIR RESPECTIVE RETURNS OF INCOME AND PAID TAXES . IF PAYMENT OF TAX IS MADE BY RESPECTIVE 3 ITA NO.1075/KOL/2012 M/S. J. D. CHUNDER & CO. AY 2009 - 10 RECIPIENTS THEN ADDITION SHOULD BE DELETED. WE DIRECT THE AO ACCORDINGLY. APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5 . IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6 . ORDER IS PRONOUNCED IN THE OPEN COURT ON 14.09.2015. SD/ - SD/ - ( M. BALAGANESH ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 14TH SEPTEMBER , 201 5 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1 . A PPELLANT M/S. J. D. CHUNDER & CO.., 31A, DIXON LANE, KOLKATA - 700014 2 RESPONDENT ITO, WARD - 31(2) , KOLKATA. 3 . THE CIT (A), KOLKATA 4. 5. CIT KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .