Mohammed Dawood, Hooghly V. ITO, Ward-28(2), Kolkata, Kolkata

ITA 1222/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78333 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 22-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D J MEHTA JCIT SRDR
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 1222 / KOL / 2012 ASSESSMENT YEAR :2007-08 MOHAMMED DAWOOD PROP.OF M/S. DELTA ENGG. & CONSTRUCTION CO., 11, WATGUNJ STREET, KOLKATA 700 023 [ PAN NO.AGPPD 6417 R ] V/S . INCOME TAX OFFICER, WARD-28(2), AAYAKAR BHAWN DAKSHIN, 2, GARIAHAT ROAD, KOLKATA 700 031 / APPELLANT .. / RESPONDENT) /BY APPELLANT SHRI SOMNATH GHOSH, ADVOCATE /BY RESPONDENT SHRI D.J. MEHTA, JCIT, SR-DR /DATE OF HEARING 07-05-2014 /DATE OF PRONOUNCEMENT 07-05-2014 / // / O R D E R PER SHAMIM YAHYA, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XIV, KOLKATA DATED 21-05-20 12 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. THE ISSUE RAISED IS THAT LD. CIT(A) ERRED IN CON FIRMING THE ADDITION OF RS.38,32,700/- U/S. 40(A)(IA) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). ITA NO.1222/KOL2012 A.Y. 2007-08 MD. DAWOOD V. ITO WD.28(2) KOL PAGE 2 3. IN THIS CASE, ASSESSEE IS AN INDIVIDUAL AND WAS ENGAGED IN THE BUSINESS OF HIRING AND TRANSPORTATION AS A CONTRACT OR. ASSESSING OFFICER NOTED THAT ASSESSEE HAS PAID TRANSPORT CHARGES ABOV E THE LIMIT PRESCRIBED IN SECTION 40(A)(IA) OF THE ACT AMOUNTIN G TO RS.38,32,700/-. AO HELD THAT ASSESSEE HAS NOT DEDUCTED TAX AT SOURC E IN VIOLATION TO SECTION 194C OF THE ACT AND HENCE HE DISALLOWED THE EXPENSES U/S. 40(A)(IA) OF THE ACT. 4. UPON ASSESSEES APPEAL IN THIS REGARD, LD. CIT(A ) CONFIRMED THE ADDITION MADE BY ASSESSING OFFICER. 5. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL B EFORE US. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE IS AN INDIVIDUAL AND WAS NOT LIABLE TO MAKE DEDUCTION OF TAX AT SOURCE A S PER THE PROVISION OF SECTION 194C AS APPLICABLE FOR THE PRESENT ASSESSME NT YEAR. IN THIS REGARD, LD. COUNSEL FOR THE ASSESSEE PLACED RELIANC E UPON THE DECISION OF THE TRIBUNAL AS WELL AS THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT WHICH SUPPORT THE PROPOSITION. 7. LD. SR-DR ON THE OTHER HAND, COULD NOT CONTROVER T THIS SUBMISSION OF LD. COUNSEL FOR THE ASSESSEE. 8. UPON CAREFULLY CONSIDERED THE SUBMISSION, WE NOT E THAT ISSUE INVOLVED IS COVERED IN FAVOUR OF ASSESSEE. WE NOTE THAT THIS TRIBUNAL IN THE CASE OF SARWANI BANO V. ITO IN ITA NO.188/KOL/2011 FOR AY 2006- 07 BY ORDER DATED 07-08-2012 HAS HELD AS UNDER:- ITA NO.1222/KOL2012 A.Y. 2007-08 MD. DAWOOD V. ITO WD.28(2) KOL PAGE 3 8. IN VIEW OF THE ABOVE CLEAR PROVISIONS OF SECTIO N 194(1) AS EXISTING IN ASSESSMENT YEARS 2006-07 & 2007-08, I.E . RELEVANT ASSESSMENT YEARS IN THE PRESENT APPEALS, IT IS CLEA R THAT THE ASSESSEE IS UNDER NO OBLIGATION TO DEDUCT TDS ON TH E EXPENDITURE OF ADVERTISEMENT, AS THE ASSESSEE BEING AN INDIVIDU AL, AND THE CLAIM OF THE ASSESSEE IS AS PER PROVISIONS OF LAW. ONCE THE ASSESSEE IS NOT LIABLE TO DEDUCT TDS UNDER THE PROV ISION OF SECTION 194C(1), THE PROVISIONS OF SECTION 40(A)(IA ) FOR MAKING DISALLOWANCE OF EXPENDITURE FOR NON-DEDUCTION OF TD S WILL NOT APPLY. WE FURTHER FIND THAT, IT IS NOT THE CASE OF THE REVENUE THAT THE EXPENSES ARE BOGUS OR UNREASONABLE OR EXCESSIVE BUT THE DISALLOWANCE IS MADE MERELY FOR NON-DEDUCTION OF TD S. ACCORDINGLY, WE ARE OF THE CONSIDERED VIEW THAT CIT (A) HAS RIGHTLY DELETED THE DISALLOWANCE AND WE CONFIRM THE SAME. WE FURTHER FIND THAT THE HONBLE JURISDICTIONAL HIG H COURT IN ITAT NO. 96 OF 2012 IN THE CASE OF CIT V. SHRI RINKU MALLICK VIDE DATED 15-06-2012 HAS HELD AS UNDER:- WE HAVE HEARD THE LEARNED COUNSEL, SMT. SINHA [DAS DE], APPEARING FOR THE APPELLANT, AND WE HAVE GONE THROU GH THE IMPUGNED JUDGMENT AND ORDER. WE ARE OF THE VIEW THA T THIS APPEAL DOES NOT REQUIRE ADMISSION FOR HEARING AS THE APPLI CABILITY OF LAW INVOLVED HEREIN IS ADMITTEDLY SETTLED. IT IS ADMITT ED POSITION THAT THE MATTER RELATES TO THE ASSESSMENT YEAR 2006-07, WHER EAS SECTION 194C(1) HAS BEEN MADE APPLICABLE TO THE INDIVIDUAL ASSESSEE WITH EFFECT FROM 1.6.2007 . THERE IS NO DISPUTE THAT THE RESPONDENT IS AN INDIVIDUAL ASSESSEE. CONSIDERING THE POSITION OF THE LAW, THE LEARNED TR IBUNAL HAS CONSISTENTLY HELD THAT SECTION 194C(1) CANNOT BE MA DE APPLICABLE FOR THE ASSESSMENT YEAR 2006-07.. ON IDENTICAL FACT THE LEARNED TRIBUNAL HAS HELD SO IN THE CASE OF AJAY RAWLA VS. DCIT, CIRCLE-28, KOLKATA [ ITA NO. 353/KOL/2010 DATED 22.6.2011]. IT HAS NOT BEEN SUBMITTED THAT THE AFORESAID JUDGME NT HAS BEEN UPSET BY THIS COURT. IN FACT, ON NARRATION OF UNDIS PUTED FAT, WE DO NOT THINK THAT THE LEARNED TRIBUNAL HAS DECIDED WRO NGLY IN THIS CASE OR IN THE PREVIOUS CASE. ITA NO.1222/KOL2012 A.Y. 2007-08 MD. DAWOOD V. ITO WD.28(2) KOL PAGE 4 RESPECTFULLY, FOLLOWING THE PRECEDENTS AS ABOVE, WE HOLD THAT ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE ON THE IMPUG NED PAYMENTS AND HENCE NO DISALLOWANCE U/S. 40(A)(IA) OF THE ACT WAS REQUIRED. HENCE, WE SET ASIDE THE ORDER OF AUTHORITIES BELOW AND DECIDE THE ISSUE IN FAVOUR OF ASSESSEE. 9. IN THE RESULT, THIS APPEAL FILED BY ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 0 7/05/2014 SD/- SD/- (MAHAVIR SINGH) (SHAMIM YAHYA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 07/05/2014 - - - - .- .- .- .- / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT MOHAMME DAWOOD, C/O SHRI SOMNATH GHOSH , ADVOCATE, SEVEN BROTHERS LODGE, P.O. BUROSIBTHALA, P.S. CHINSURAH, DIST. HOOGHLY 2. / RESPONDENT ITO, WARD-28(2), AAYAKAR BHAWAN DAK SHIN, 2, GARIAHAT ROAD, KOLKAT 700 031 3. 3 / CONCERNED CIT 4. 3- / CIT (A) 5. - , , / DR, ITAT, KOLKATA 6. 9 / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ,