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

ITA 1308/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49336 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 15-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 17-02-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Assessee Lawyers: DR P DANIEL
• Keywords: Retrospective amendment; Additional evidence; TDS; Set aside
• Section: 143(3); 40(a)(ia); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, I , MUMBAI BEFORE S/SHRI D.K.AGARWAL (JM) AND T.R.SOOD(A.M ) ITA NO.1308/MUM/2010 (ASSESSMENT YEAR:2006-07) INCOME TAX OFFICER 22(2)-1, ROOM NO.419, 4 TH FLOOR, TOWER NO.6, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI-400705 SHRI JITENDRA SINGH RANDHAWA, 9, A-WING, SITA ESTATE, AZIZ BAUG, MAHUL ROAD, CHEMBUR, MUMBAI-400074 PAN:AACPR7533B APPELLANT V/S RESPONDENT C.O. NO.06/MUM/2011 IN ITA NO.1308/MUM/2010 (ASSESSMENT YEAR:2006-07) SHRI JITENDRA SINGH RANDHAWA, 9, A-WING, SITA ESTATE, AZIZ BAUG, MAHUL ROAD, CHEMBUR, MUMBAI-400074 PAN:AACPR7533B INCOME TAX OFFICER 22(2)-1, ROOM NO.419, 4 TH FLOOR, TOWER NO.6, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI-400705SHRI CROSS-OBJECTOR V/S RESPONDENT REVENUE BY : SHRI S.K.SINGH ASSESSEE BY : DR.P.DANIEL O R D E R PER D.K.AGARWAL (JM) THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 2.12.2009 PASSED BY THE LEA RNED ITA NO.1308/MUM/2010 C.O. NO.06/MUM/2011 (ASSESSMENT YEAR:2006-07) 2 COMMISSIONER OF INCOME TAX (A) FOR THE ASSESSMENT YEAR 2006-07 AGAINST WHICH THE ASSESSEE HAS FILED CROSS- OBJECTION. THE APPEAL AND CROSS-OBJECTION ARE DISP OSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE, AN INDIVIDUAL, IS ENGAGED IN THE BUSINESS OF TRAN SPORTATION OF CHEMICALS BY USING HIS OWN VEHICLES AND OTHER H IRED VEHICLES ON CONTRACT BASIS FROM SISTER CONCERN AS W ELL AS FROM OTHER CONCERNS. DURING THE COURSE OF ASSESSME NT PROCEEDINGS, THE AO FROM THE P AND L ACCOUNT AND D ETAILS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, INTER ALIA, OBSERVED THAT THE ASSESSEE HAS PAID HIRE CHARGES TO SISTER CONCERN AND FAILED TO DEDUCT THE TAX UNDER SECTION 194C AND DID NOT DEPOSIT THE SAME WITHIN TIME, THEREFORE, TH E ASSESSEE IS LIABLE FOR DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961( IN SHORT THE ACT) AS UNDER: TOTAL PAYMENT MADE TO SISTER CONCERN NAMELY SUPER BULK CARRIER AND SUKHMANI ROADLINE RS.50,39,000/- LESS : 1. TDS OF RS.7005 PAID @ 1.02 ON RS.686764/- DATED 27.10.2005 2. PAYMENT MADE TO BOTH SISTER CONCERN IN MARCH, 06 OF RS.4,22,000/- PAID IN JUNE RS.11,08,764/- DISALLOWANCE U/S 40(A)(IA) RS.39,30,236/- ITA NO.1308/MUM/2010 C.O. NO.06/MUM/2011 (ASSESSMENT YEAR:2006-07) 3 ACCORDINGLY, THE AO DISALLOWED RS.39,30,236/- UNDE R SECTION 40(1)(IA) OF THE ACT. THE AO AFTER MAKING SOME OTH ER DISALLOWANCES COMPLETED THE ASSESSMENT AT AN INCOM E OF RS.44,96,770/- VIDE ORDER DATED 8.12.2008 PASSED U NDER SECTION 143(3) OF THE ACT. 3. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (A) OBSERVED THAT THE ASSESSEE HAS DEDUCTED TAX AT SOURCE ON THE PAYMENTS, THE DETAILS OF THE CHART REVEAL AS UNDER : MONTH SUPER TDS @1.02% &@ 1.12% SUKH- MANI TDS@ 1.12% TDS PAYABLE TDS PAID AMOUNT APRIL, 05 98200 NIL 150200 NIL NIL MAY,05 97560 NIL 180300 NIL NIL JUNE,05 99550 NIL 156100 NIL NIL JULY,05 98330 NIL 100460 NIL NIL AUG,05 96220 NIL 100300 NIL NIL SEP,05 196904 7005 101200 NIL 7005 22.10.05 7005 OCT,05 50036 NIL 100600 NIL NIL NOV,05 198700 NIL 160550 NIL NIL 28.06.06 10000 DEC,05 202100 NIL 170660 NIL NIL 18.09.06 10922 JAN,06 196550 NIL 160580 NIL NIL 22.07.08 22000 FEB,06 192300 NIL 83565 NIL NIL 29.08.08 10000 MAR,06 512550 15832 1535485 33600 49432 2039000 22837 3000000 33600 56437 59927 THE LEARNED COMMISSIONER OF INCOME TAX (A) AFTER EX AMINING THE DETAILS SUBMITTED BY THE ASSESSEE OBSERVED THAT THE DISALLOWANCE UNDER SECTION 40(1)(IA) SHOULD HAVE BE EN LIMITED TO ONLY RS.25,45,446/- AGAINST THE DISALLOW ANCE OF ITA NO.1308/MUM/2010 C.O. NO.06/MUM/2011 (ASSESSMENT YEAR:2006-07) 4 RS.39,30,236/-/- MADE BY THE AO AS PER THE AMENDED PROVISIONS OF SECTION 40(A)(IA) WHICH HAS BEEN AMEN DED WITH RETROSPECTIVE EFFECT FROM 1.4.2005 AND ACCORDINGLY THE LEARNED COMMISSIONER OF INCOME TAX (A) DIRECTED TH E AO TO RECOMPUTE THE DISALLOWANCE ON THE BASIS OF AMENDED SECTION AND DETAILS SUBMITTED BY THE ASSESSEE REGARDING THE TRANSPORTATION CHARGES PAID, TDS DEDUCTED AND PAID TO THE GOVERNMENT TREASURY. 4. BEING AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (A), THE REVENUE AND ASS ESSEE BOTH ARE IN APPEAL BEFORE US. 5. THE GROUNDS TAKEN BY THE REVENUE READ AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE AD DITION MADE BY THE AO UNDER SECTION 40(A)(IA) FROM RS.39,30,236/- TO RS.25,45,446/- WITHOUT APPRECIATI NG THE FACT THAT THE AO HAS DISALLOWED THE SAID AMOU NT FOR NON-DEDUCTION OF TDS ON PAYMENT OF TRANSPORT CHARGE S TO SISTER CONCERN M/S SUPER CARRIERS AND M/S SUKHMA NI ROADLINES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN RESTRICTING THE ADDIT ION MADE BY THE AO ON THE BASIS OF EVIDENCE SHOWING CHART WI SE DETAILS OF TRANSPORT CHARGES AND TDS DEDUCTED /PAI D DURING THE COURSE OF APPELLATE PROCEEDINGS WHICH IS DEFERENT FROM THE DETAILS SUBMITTED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ITA NO.1308/MUM/2010 C.O. NO.06/MUM/2011 (ASSESSMENT YEAR:2006-07) 5 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) FAILED TO CALL FOR A REMAND REP ORT FROM THE AO WITHOUT APPRECIATING THE FACTS BROUGHT ON R ECORD BY THE AO AND ENTERTAINING ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A OF THE IT RULES, 1962. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A ) ON THE ABOVE BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED 6. THE GROUNDS TAKEN BY THE ASSESSEE IN THE CROSS- OBJECTION READ AS UNDER : 1. THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE UNDER SECTION 40(A)(IA) OF RS.25,45,44 6/- WHEN THE ASSESSEE WAS NOT LIABLE TO DEDUCT TAX UND ER SECTION 194C(1) OF THE IT ACT, 1961. 2. THE RESPONDENT PRAYS THAT THE ORDER OF THE AO AND CIT(A) BE REVERSED AND THE ADDITION SUSTAINED BE DELETED 7. AT THE TIME OF HEARING, BOTH THE PARTIES HAVE AG REED THAT THE DISALLOWANCE UNDER SECTION 40(A)(IA) HAS NOT BEEN EXAMINED IN VIEW OF THE PROVISIONS OF SECTION 194C (2) OF THE ACT ACCORDING TO WHICH THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX AT SOURCE ON THE PAYMENTS MADE TO LORRY OWNERS FOR LORRY HIRED, THEREFORE, IN THE INTERESTS OF JUSTICE THE I SSUE MAY BE SET ASIDE TO THE FILE OF THE LEARNED COMMISSIONER O F INCOME TAX (A). IN SUPPORT, THE ASSESSEE HAS ALSO RELIED ON THE DECISION OF THE TRIBUNAL IN MYTHRI TRANSPORT CORP ORATION V/S ACIT (2010) 1 ITR (TRIB) 290) (VISAKHAPATNUM). ITA NO.1308/MUM/2010 C.O. NO.06/MUM/2011 (ASSESSMENT YEAR:2006-07) 6 8. WE HAVE CAREFULLY HEARD THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. WE FIND MERIT IN THE SUBMISSIONS OF THE LEARNED COUNSE L FOR THE ASSESSEE THAT THE ISSUE HAS NOT BEEN EXAMINED IN T HE LIGHT OF PROVISIONS OF SECTION 194C(2) OF THE ACT. 9. IN MYTHRI TRANSPORT CORPORATION(SUPRA), THE ISSU E BEFORE THE TRIBUNAL WAS AS UNDER (PAGE 299) : 'WHETHER THE VEHICLES HIRED BY THE ASSESSEE IN EXEC UTION OF THE TRANSPORT CONTRACT CAN BE TERMED AS A `SUB- CONTRACT' AND CONSEQUENTLY THE ASSESSEE IS LIABLE TO DEDUCT TAX FROM THE PAYMENT MADE FOR SUCH VEHICLES UNDER SECTION 194C(2) OF THE ACT ?' THE TRIBUNAL AFTER EXAMINING THE PROVISIONS OF THE ACT HAS HELD AS UNDER (PAGE 302) : ..HENCE, IN OUR CONSIDERED OPINION, IT CANNOT BE SAID THAT THE PAYMENTS MADE FOR HIRED VEHICLES WOULD FA LL IN THE CATEGORY OF PAYMENT TOWARDS A SUB-CONTRACT WIT H THE LORRY OWNERS. IN THAT CASE THE ASSESSEE IS NOT LIAB LE TO DEDUCT TAX AT SOURCE, AS PER THE PROVISIONS OF SECT ION 194C(2), ON THE PAYMENTS MADE TO THE LORRY OWNERS F OR LORRY HIRE. CONSEQUENTLY, THE PROVISIONS OF SECTION 40(A)(IA) SHALL NOT APPLY TO SUCH PAYMENTS. 10. WE FURTHER FIND THAT IN THE CROSS-OBJECTION, THE ASSESSEE ADMITTEDLY HAS RAISED THE GROUND WHICH WAS NOT ITA NO.1308/MUM/2010 C.O. NO.06/MUM/2011 (ASSESSMENT YEAR:2006-07) 7 TAKEN BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (A). THIS BEING SO AND KEEPING IN VIEW THE RATIO OF THE DECISION OF THE HONBLE MADHYA PRADESH HIGH COURT IN CIT V /S TOLLARAM HASSOMAL (2008) 298 ITR 22(MP), WHEREIN IT HAS BEEN HELD THAT THE TRIBUNAL HAVING PERMITTED ADDITI ONAL GROUNDS TO BE RAISED FOR THE FIRST TIME, SHOULD HAV E REMANDED THE CASE TO THE CIT(A), CONSIDER IT FAIR AND REASON ABLE THAT THE MATTER SHOULD GO BACK TO THE FILE OF THE LEARNE D COMMISSIONER OF INCOME TAX(A) AND ACCORDINGLY WE SE T ASIDE THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INC OME TAX (A) ON THIS ACCOUNT AND RESTORE ALL THE ISSUES RAIS ED BEFORE US BY THE REVENUE AND ASSESSEE TO HIS FILE TO DECI DE THE SAME AFRESH IN THE LIGHT OF OUR OBSERVATIONS HEREIN ABOVE AND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPPORT UNITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS TAKEN BY THE REVENUE AND ASSESSEE ARE THEREFORE PARTLY ALLOWED F OR STATISTICAL PURPOSES. 11. IN THE RESULT, THE REVENUES APPEAL AND ASSESSE ES CROSS-OBJECTION ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 24TH DAY OF JUNE, 2011. SD/- SD/- (T.R.SOOD) (D.K.AGARWAL) ACCOUNTANT MEMBER JUDICIAL MEM BER MUMBAI, DATED 24TH JUNE, 2011 ITA NO.1308/MUM/2010 C.O. NO.06/MUM/2011 (ASSESSMENT YEAR:2006-07) 8 SRL: COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILE. BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI ITA NO.1308/MUM/2010 C.O. NO.06/MUM/2011 (ASSESSMENT YEAR:2006-07) 9 DATE INITIALS 1. DRAFT DICTATED ON 15.6.2011 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 16.6.2011 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM 5. APPROVED DRAFT COMES TO THE SR. PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO AR 10. DATE OF DISPATCH OF ORDER