ACIT, Patna V. Parmeshwari Enterprises Pvt. Ltd., Patna

ITA 121/PAT/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7773 (ITAT-PATNA)
• Duration Of Justice: 3 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 19-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM BABU
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH, PATNA BEFORE SHRI J.SUDHAKAR REDDY (AM) & SHRI SANDEEP GOSAIN (JM) ITA NO. 121 /PAT/201 4 ASSESSMENT YEARS: 20 06 - 07 ACIT VS. PARMESHWARI ENTERPRISES P. LTD , CIRCLE - 2 , NEAR JAI MATA DEE AUTO PARTS, PATNA. DIDARGANJ, PATNA CITY . (APPELLANT) (RESPONDENT) PAN - AA CCP2622C DEPARTMENT BY : S HRI RAM BABU, DR. ASSESSEE BY : NONE . DATE OF HEARING: - 05 /10 /201 7 DATE OF PRONOUNCEMENT: - 06 / 10 /201 7 ORDER PER SANDEEP GOSAIN, JUDICIAL MEMBER: THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST THE ORDER OF THE CIT (A) - DHANBAD DATED - 11 .0 3 .201 4 PERTAINS TO ASSESSMET YEAR 20 06 - 07 . 2. THE EFFECTIVE ISSUE RAISED IN GROUND S OF APPEAL READ AS UN DER: 1. THE CIT(A) HAS ERRED IN DELETING THE ADDITIONS OF RS.60,34,232/ - OUT OF RS.65,93,263/ - MADE BY THE AO ON ACCOUNT OF DISALLOWANCE U/S40(A) (IA) OF THE INCOME - TAX ACT,1961 FOR FAILURE ON THE PART OF THE ASSESSEE TO DEDUCT TAX UNDER THE PROVISIONS OF SECTION 194C OF THE INCOME - TAX ACT,1961. 2. THE CIT(A) HAS ERRED IN EQUATING THE PRESENT CASE WITH THE CASES MENTIONED IN THE JUDGEMENTS OF HONBLE PUNJAB AND HARYANA HIGH COURT AS THE FACTS OF THIS CASE ARE DIFFERENT AND DISTINGUISHABLE . 2 I TA NO. - 121 / PAT /20 1 4 3 . ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 3. TODAY THE CASE WAS FIXED FOR HEARING BUT NONE APPEARED ON BEHALF OF THE ASSESSEE EVEN IN SPITE OF REPEATED CALLS AND NO ADJOURNMENT APPLICATION HAS BEEN FILED TODAY. ON THE OTHER HAND, THE LD. DR PRESEN T IN THE COURT , AND IS READY FOR ARGUMENT. IN SUCH CIRCUMSTANCES, WE HAVE DECIDED TO PROCEED THE ASSESSEE EX - PARTE AND DECIDE THE APPEAL AFTER HEARING LD. D R AND CONSIDERING THE RECORDS. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMIT ED COMPANY ENGAGED IN THE BUSINESS OF CONSIGNEE AGENT OF IRON AND STEEL. IT FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2006 - 07 SHOWING INCOME OF RS.2,08,267/ - . THE ORDER OF ASSESSMENT U/S143(3) OF INCOME - TAX ACT WAS PASSED DETERMINING THE TOTAL INCOME AT RS.68,01,530/ - BY MAKING OF ADDITIONS OF RS.65,93,263/ - U/S 40(A) (IA) OF THE INCOME - TAX ACT,1961. 5. AGGRIEVED BY THE ORDER, THE ASSESSEE PREFERRED AN APPEAL AGAINST THE ASSESSMETN BEFORE LD. CIT(A). THE LD. CIT(A) AFTER CONSIDERING THE CASE FOR BOTH TH E PARTIES HAD PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE. 6 . AGGRIEVED, BY THE ORDER OF THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE US ON THE GROUND MENTIONED HEREINABOVE. 7 . GROUND NO.3 IS GENERAL IN NATURE NEEDS NO ADJUDICATION. 3 I TA NO. - 121 / PAT /20 1 4 8 . GROUND NOS. 1 & 2 ARE INTER - RELATED AND INTER - CONNECTED AND RELATES TO CHALLENGING THE ORDER OF LD. CIT(A) IN DELETING THE ADDITIONS MADE BY AO ON ACCOUNT OF DISALLOWANCE U/S 40(A) (IA) OF THE INCOME - TAX ACT. THEREFORE, WE THOUGHT IT FIT TO DISPOSE OF THE SAME T HROUGH THE PRESENT CONSOLIDATED ORDER. 9 . WE HAVE HEARD THE COUNSEL FOR BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS OF THE AUTHORITIES BELOW. 10. BEFORE WE DECID E THE MERITS OF THE CASE, IT IS NECESSARY TO EVALUATE AND ANALYS E THE ORDERS PASSED BY THE LD. CIT(A) WHILE DEALING WITH THIS GROUND. THE LD. CIT(A) HAS DEALT WITH TH ESE GROUND S IN PARA NO S . 3 .2 AND 3.3 OF ITS ORDER AND THE SAME IS REPRODUCED BELOW: 3.1 A COPY OF THE ABOVE REPLY WAS SENT TO THE AO FOR SUBMITTING RE MAND REPORT VIDE LETTER DATED 02.11.2011. THE SAME WAS SUBMITTED VIDE LETTER DATED 31.01.2014. IT HAS BEEN STATED THAT SINCE POINT OF LAW WAS INVOLVED IN THE MATTER, THE AO HAD NO COMMENTS TO OFFER. 3.2 I HAVE CONSIDERED THE FACTS OF THE CASE. IT WAS HELD BY THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. UNITED RICE LAND (SUPRA) THAT IN THE ABSENCE OF ANY ORAL OR WRITTEN AGREEMENT, EACH GR CONSTITUTED A SEPARATED CONTRACT AND IF AMOUNT PAYABLE WAS NOT IN EXCESS OF RS.20,000/ - , NO DEDUCTION OF TAX AT SOURCE WAS REQUIRED. SIMILARLY, IT WAS HELD IN THE CASE OF CIT VS. BHAGWATI STEELS 198 TAXMAN 275 BY THE HONBLE PUNJAB AND HARYANA HIGH COURT THAT IN THE ABSENCE OF ANY ORAL OR WRITTEN AGREEMENT WITH THE TRANSPORTERS FOR ANY SPECIFIC PERIOD, PR ICE OR QUANTITY, EACH GR CAN BE TAKEN TO BE A SEPARATE CONTRACT AND TAX DEDUCTION UNDER SECTION 194C WOULD NOT BE REQUIRED IF THE AMOUNT PAID AS PER EACH G.R. WAS LESS THAN RS.20,000/ - . THE DEPARTMENT CARRIED THE MATTER TO THE APEX COURT AND SLR OF THE DEP ARTMENT WAS DISMISSED VIDE ORDER DATED 03.12.2010 SLP (CIVIL) NO.34791 OF 2010 4 I TA NO. - 121 / PAT /20 1 4 AS REPORTED IN 336 ITR 114 (STATUTES). FROM THE COPIES OF ACCOUNTS OF TRANSPORTERS FILED BY THE APPELLANT, IT IS SEEN THAT MOST OF THE AMOUNTS PAID ARE BELOW RS.20,000/ - EXCEPT THE FOLLOWING AMOUNTS: SL. NO. DATE NAME OF THE PAYEE AMOUNT 1. 23.04.2005 MEGHA ROADWAYS 20504 2. 01.05.2005 MEGHA ROADWAYS 20086 3. 01.11.2005 MEGHA ROADWAYS 23807 4. 11.11.2005 MEGHA ROADWAYS 22575 5. 15.12.2005 MEGHA ROADWAYS 24080 6. 25.12.2005 MEGHA ROADWAYS 21791 7. 29.12.2005 MEGHA ROADWAYS 22624 8. 03.01.2006 MEGHA ROADWAYS 22890 9. 24.01.2006 SANDEEP ROADWAYS 21455 10. 25.01.2006 SANDEEP ROADWAYS 21553 11. 02.02.2006 SANDEEP ROADWAYS 22589 12. 08.02.2006 MEGHA ROADWAYS 23618 13. 08.02 .2006 MEGHA ROADWAYS 22008 14. 09.02.2006 MEGHA ROADWAYS 25172 15. 12.02.2006 SANDEEP ROADWAYS 24073 16. 17.02.2006 MEGHA ROADWAYS 25480 17. 18.02.2006 MEGHA ROADWAYS 26411 18. 06.03.2006 MEGHA ROADWAYS 23744 19. 06.03.2006 MEGHA ROADWAYS 24178 20. 09.03.2006 MEGHA ROADWAYS 23058 21. 13.03.2006 MEGHA ROADWAYS 23415 22. 13.03.2006 MEGHA ROADWAYS 23205 23. 15.03.2006 MEGHA ROADWAYS 24171 24. 31.03.2006 MEGHA ROADWAYS 26544 TOTAL 559031 3.3 ACCORDINGLY, A DISALLOWANCE OF RS.5,59,031/ - IS CONFIR MED WHEREAS, THE BALANCE DISALLOWANCE IS DELETED. 5 I TA NO. - 121 / PAT /20 1 4 11 . AFTER HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND HAVING HEARD LD.DR WE FIND THAT THE LD. CIT(A) WHILE DEALING WITH THIS GROUND HAS CONSIDERED THE FACTS OF THE CASE AND RIGHTLY APPR ECIATED THAT , EACH GR CONSTITUTED A SESPARATE CONTRACT AND IF AMOUNT PAYABLE WAS NOT IN EXCESS OF RS.20,000/ - , NO DEDUCTION OF TAX AT SOURCE WAS REQUIRED. THE LD. CIT(A) HAVE ALSO RELIED UPON THE JUDGMENT OF HONBLE HIGH COURT TO THE EFFECT THAT IN THE ABS ENCE OF ANY ORAL OR WRITTEN AGREEMENT WITH THE TRANSPORTERS FOR ANY SPECIFIC PERIOD, PRICE OR QUANTITY, EACH GR CAN BE TAKEN TO BE A SEPARATE CONTRACT AND TAX DEDUCTION U/S 194C WOULD NOT BE REQUIRED IF THE AMOUNT PAID AS PER EACH GR LESS THAN RS.20,000/ - . EVEN FROM THE RECORD , WE FIND THAT NOTHING HAS BEEN BROUGHT ON RECORD BY THE AO TO PROVE THAT THERE WAS ANY ORAL AND WRITTEN CONTRACT WITH THE TRANSPORTER FOR ANY SPECIFIC PERIOD, PRICE OR QUANTIY. THEREFORE, IN THESE CIRCUMSTANCES THE LD. CIT(A) HAS RIG HTLY DELETED THE DISALLOWANCE. 1 2 . NO NEW FACTS, CIRCUMSTANCES OR CONTRARY JUDGMENTS HAVE BEEN PRODUCED BEFORE US IN ORDER TO CONTROVERT OR REBUT THE FINDINGS SO RECORDED. 13 . S O IN THESE CIRCUMSTANCE S , WE ARE UNABLE TO FIND ANY ILLEGALITY OR IRREGULARI TY IN THE FINDINGS OF THE LD. CIT(A). WE THEREFORE, FIND THAT THERE ARE NO GROUND TO INTERFRERE WITH THE FINDINGS OF THE LD. CIT(A) . HENCE, THE 6 I TA NO. - 121 / PAT /20 1 4 GROUND RAISED BY THE REVENUE IS DISMISSED AND THE ORDER PASSED BY THE LD.CIT(A) IS UPHLED. 1 4 . I N THE RESULT, TH E APPEAL FILED BY THE REVENUE IS DISMISSED. O RDER IS PRONOUNCED IN THE OPEN COURT ON 06 TH OCTOBER , 201 7 . SD/ - SD/ - ( J. SUDHAKAR REDDY ) ( SANDEEP GOSAIN ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE OF ORDER: 06 TH OCTOBER , 201 7 . S . S INH A (PS) COPY OF THE ORDER F ORWARDED TO : 1. THE APPELLANT . 2. THE RESPONDENT.: 3. THE CIT(A) - PATNA 4. CIT , PATNA 5. INCOME TAX APPELLATE TRIBUNAL,PATNA 6. GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY