ITO 22(2)-1, MUMBAI V. JITENDRA SINGH RANDHWA, MUMBAI

ITA 1226/MUM/2011

• Counselvise Citation: 122619914 RSA 2011
• Duration Of Justice: 2 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2007-2008
• Appeal Filed On: 10-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 194C

Judgement Text

SHRI JITENDRA SINGH RANDHAWA - 1 - VK;DJ VIHYH; VF/KDJ.K BZ U;K;IHB EQACBZ ESAA IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI JH JKTSUNZ FLAG YS[KK LNL; ,OA JH FOOSD OEKZ] U;KF; D LNL; DS LE{K BEFORE SHRI RAJENDRA SINGH ACCOUNTANT MEMBER AND SH RI VIVEK VARMA JUDICIAL MEMBER VK;DJ VIHY LA[;K /ITA NO. 1226/MUM/2011 FU/KKZJ.K O'KZ @ ASSESSMENT YEAR: - 2007-08 INCOME TAX OFFICER 22[2]-1, R. NO. 419, 4 TH FLOOR, TOWER NO. 6, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI- 400 075. CUKE@ VS. SHRI JITENDRA SINGH RANDHAWA 9, A-WING, SILA ESTATE, AZIZ BAUG, MAHUL ROAD, CHEMBUR, MUMBAI - 74 PAN:- AACPR7533B VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT VIHYKFKHZ DH VKSJ LS @ APPELLANT BY MS. BHAVANA C. YASHROY IZR;FKHZ DH VKSJ LS @ RESPONDENT BY SHRI VALLABHDAS D. PARMAR VKNS'K@ VKNS'K@ VKNS'K@ VKNS'K@ ORDER PER RAJENDRA SINGH, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 13.12.2010 OF CIT(A) FOR THE ASSESSMENT YEAR 2007-0 8. THE DISPUTE RAISED BY THE REVENUE IN THIS APPEAL IS REGARDING ADDITION MADE U/S 40(A)(IA) WHICH HAS BEEN DELETED BY CIT(A). IN THIS APPEAL THE REVE NUE HAS ALSO RAISED THE ISSUE OF ADDITIONAL EVIDENCE ENTERTAINED BY CIT(A). LQUOKBZ DH RKJH[K @ DATE OF HEARING 30-09-2013 ?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT 30-09-2013 SHRI JITENDRA SINGH RANDHAWA - 2 - 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE DURING THE YEAR HAD RECEIVED TRANSPORT CHARGES OF RS.1,64,92,063/- FROM VARIOUS COMPANIES. THE AO NOTED THAT FOR DISCHARGING THE CONTRACTUAL OBLIGATI ON THE ASSESSEE HAD TRANSPORTED THE GOODS THROUGH ITS OWN VEHICLES AS W ELL AS THROUGH HIRED VEHICLES. AO ALSO NOTED THAT THE ASSESSEE HAD PAID VEHICLE HIRING CHARGES TO SUB CONTRACTORS AS PER DETAILS GIVEN BELOW;- NAME OF THE SUB- CONTRACTOR TOTAL TRANSPORT CHARGES PAID/CREDITED TDS NOT DEDUCTED ON THE PAYMENTS M/S SUKHMANI ROADLINES RS. 29,80,000/- RS. 26,80,000/- M/S SUPER BULK CARRIER RS. 36,00,000/- RS. 30,89,66 0/- TOTAL RS. 65,80,000/- RS. 57,69,660/- 2.1 AO OBSERVED THAT THE TURNOVER OF THE ASSESSEE E XCEEDED THE MONETARY LIMITS PRESCRIBED U/S 44AB IN ASSESSMENT YEAR 2006- 07 AND, THEREFORE, THE PROVISIONS OF SECTION 194C WERE APPLICABLE IN CASE OF THE ASSESSEE ON PAYMENTS MADE TO THE SUB-CONTRACTORS. AO, THEREFORE , ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE EXPENDITURE OF RS. 57,69,660/ - ON ACCOUNT OF VEHICLE HIRING CHARGES SHOULD NOT BE DISALLOWED U/S 40(A)(I A). THE ASSESSEE HOWEVER COULD NOT FURNISH ANY EXPLANATION. AO, THEREFORE, A DDED A SUM OF RS. 57,69,660/- TO THE TOTAL INCOME. 3. THE ASSESSEE DISPUTED THE DECISION OF AO AND SUB MITTED BEFORE CIT(A) THAT TAX HAD BEEN DEDUCTED AND PAID TO THE GOVERNME NT. IT WAS ALSO SUBMITTED THAT THE ASSESSEE WAS NOT UNDER ANY OBLIG ATION TO DEDUCT TAX FROM THE TRANSPORT CHARGES PAID TO THE PARTIES. CIT(A) O N EXAMINATION OF RECORDS NOTED THAT THE TAX HAD BEEN DEDUCTED AND PAID AFTER EXPIRY OF TWO YEARS AND, THEREFORE, THE CLAIM COULD NOT BE ALLOWED AS THE TA X HAD NOT BEEN PAID WITHIN THE DUE DATE. IN RELATION TO NON DEDUCTABILITY OF T DS, THE ASSESSEE SUBMITTED THAT IT WAS THE ASSESSEE WHO WAS ENTRUSTED WITH JOB BY THE COMPANIES AND, THEREFORE, THE INDIVIDUALS TO WHOM TRUCK HIRE CHARG ES HAD BEEN PAID WERE SHRI JITENDRA SINGH RANDHAWA - 3 - NOT HIS SUB-CONTRACTORS. IN SUPPORT OF THE CLAIM TH E ASSESSEE PRODUCED THE COPIES OF WORK ORDERS. CIT(A) NOTED THAT THE WORK O RDERS WERE IN THE NAME OF THE ASSESSEE AS PROPRIETOR OF M/S JITENDER ROADLINE S. THE RISK AND COST CLAUSE OF WORK CONTRACT STATED THAT THE ASSESSEE WA S HAVING THE LIABILITY TO BEAR RISK AND THE COST IN CASE OF FAILURE TO MEET T HE TERMS OF CONTRACT. CIT(A), THEREFORE, HELD THAT THE PARTIES TO WHOM THE HIRE C HARGES WERE PAID WERE NOT SUB-CONTRACTORS OF THE ASSESSEE AND, THEREFORE, THE PROVISIONS OF SECTION 194C(2) WERE NOT APPLICABLE. AS REGARDS THE PROVISI ONS OF SECTION 194(C) (1), CIT(A) OBSERVED THAT PROVISIONS WERE APPLICABLE TO INDIVIDUALS AND HUF ONLY FROM ASSESSMENT YEAR 2007-08 AS THE SUB-CLAUSE (K) INSERTED W.E.F 1.6.2007. CIT(A), THEREFORE, HELD THAT THE TDS PROV ISIONS WERE NOT APPLICABLE IN CASE OF THE ASSESSEE AND ACCORDINGLY DIRECTED TH E AO TO DELETE THE ADDITION, AGGRIEVED BY WHICH THE ASSESSEE IS IN APP EAL BEFORE TRIBUNAL. 4. BEFORE US, THE LEARNED AR FOR THE REVENUE ASSAIL ED THE ORDER OF CIT(A). IT WAS SUBMITTED THAT CIT(A) HAD DECIDED THE ISSUE BASED ON FRESH MATERIAL PRODUCED BEFORE HIM IN THE FORM OF WORK ORDERS WHIC H HAD NOT BEEN SUBMITTED BEFORE THE AO. IN FACT, THE ASSESSEE BEFO RE THE AO HAD NOT GIVEN ANY EXPLANATION. THEREFORE, CIT(A) WAS REQUIRED TO GIVE OPPORTUNITY TO AO IN RESPECT OF THE FRESH PLEA BASED ON WORK ORDERS WHIC H HAD NOT BEEN DONE AND, THEREFORE, THE MATTER HAS TO BE SET ASIDE TO T HE FILE OF CIT(A) FOR FRESH ORDER. THE LEARNED AR APPEARING FOR THE ASSESSEE HA D NO SERIOUS OBJECTION IF THE MATTER IS SENT BACK TO CIT(A). 5. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE M ATTER CAREFULLY. THE DISPUTE IS REGARDING ALLOWABILITY OF CLAIM OF DEDUC TION ON ACCOUNT OF TRUCK HIRE CHARGES AGGREGATING TO RS. 57,69,660/- ON WHIC H TAX HAD NOT BEEN DEDUCTED/PAID WITHIN IN THE DUE DATE. THERE IS NO D ISPUTE THAT TAX HAD NOT BEEN DEDUCTED/PAID WITHIN THE DUE DATE. HOWEVER THE ASSESSEE BEFORE THE CTI(A) RAISED THE PLEA THAT TDS PROVISIONS OF SECTI ON 194C WERE NOT APPLICABLE AS THE ASSESSEE WAS AN INDIVIDUAL TO WHO M PROVISIONS OF SECTION 194C(1) WERE APPLICABLE ONLY FROM ASSESSMENT YEAR 2 007-08. FURTHER THE PROVISIONS OF SECTION 194C(2) WERE NOT APPLICABLE A S THE PAYMENT HAD NOT SHRI JITENDRA SINGH RANDHAWA - 4 - BEEN MADE TO SUB-CONTRACTOR. THE ASSESSEE PRODUCED THE COPIES OF WORK ORDERS BEFORE CIT(A) TO SUBSTANTIATE THE CLAIM THAT THE INDIVIDUALS TO WHOM THE TRUCK HIRE CHARGES WERE PAID WERE NOT SUB-CONTR ACTORS OF THE ASSESSEE. CIT(A) DECIDED THE ISSUE BASED ON SUCH FRESH MATERI AL. IN FACT, THE PLEA BASED ON SUCH MATERIAL HAD NOT BEEN MADE BEFORE AO. THEREFORE, THE AO WAS REQUIRED TO BE GIVEN OPPORTUNITY TO THE AO BEFO RE ENTERTAINING SUCH PLEA BASED ON FRESH MATERIAL. WE, THEREFORE, SET ASIDE T HE ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO HIM FOR PASSING A FRESH ORDER AFTER NECESSARY EXAMINATION IN ACCORDANCE WITH LAW AND AFTER ALLOWI NG OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED F OR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 30 -9-201 3 SD/- SD/- (VIVEK VARMA) (RAJENDRA SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER SKS SR. P.S, MUMBAI DATED 30.9.2013 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, I BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI