DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE, Sikar V. M/S SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD., Sikar

ITA 1329/JPR/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4719 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 28-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KARANI DAN
• Keywords: TDS
• Section: 40(a)(ia)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 1329/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2014-15 THE DCIT, CIRCLE, SIKAR. CUKE VS. M/S SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD., NH-11, PALASANA, DISTT. SIKAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABAS 0852 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI KARANI DAN (JCIT) FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 06/08/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 07/08/2019 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF DATED 11.09.2018 OF THE LD. CIT(A)-3, JAIPUR FOR THE ASSE SSMENT YEAR 2014-15. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITI ON OF RS. 2,81,93,209/- MADE U/S 40(A)(IA) OF THE ACT BY THE AO AND HOLDING THEREBY THAT PAYMENT OF RS. 2,81,93,209/- M ADE TO VARIOUS MILK SOCIETIES ON ACCOUNT OF MILK PRICE DIF FERENCE, IS NOT LIABLE FOR TDS U/S 194H, IGNORING THE SUBSTANCE OF THE MATTER THAT ITA NO. 1329/JP/2018 DCIT VS M/S SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SA HAKARI SANGH LTD. 2 SUCH MILK SOCIETIES PROVIDE SERVICE OF FACILITATING PURCHASE OF MILK BY THE ASSESSEE FROM CATTLE OWNERS AND ARE LIABLE F OR TDS? (II) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEN D, WITHDRAW OR INSERT ANY GROUND OR GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2. WE HAVE HEARD THE LD. DR AS WELL AS THE LD. AR A ND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE AO HAS MADE DI SALLOWANCE U/S 40(A)(IA) OF THE ACT IN RESPECT OF THE PAYMENTS MAD E TO PRIMARY COOPERATIVE SOCIETY FOR PURCHASE OF MILK AND THE DI FFERENCE WAS TREATED AS COMMISSION WAS LIABLE FOR TDS U/S 194H OF THE I. T. ACT. THE LD. CIT(A) DELETED THE SAID DISALLOWANCE MADE BY THE AO BY FOLLOWING THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE. T HE RELEVANT FINDING OF THE LD. CIT(A) IN PARA 4.3 IS AS UNDER:- 4.3 I HAVE CAREFULLY CONSIDERED THE MATERIAL BEFOR E ME. I FIND THAT THE SAME ISSUE ALREADY DECIDED IN THE APPELLAN T OWN CASE BY THE HONBLE ITAT JAIPUR BENCH WHILE DECISION THE IT A NO. 82 TO 86/JP/2015 ORDER DATED 04.03.2016 AS UNDER:- WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE A SSESSEE PURCHASED MILK FROM THE PRIMARY SOCIETY NOT FROM TH E CATTLE OWNERS. THE PAYMENTS ARE MADE TO THE PRIMARY SOCIET Y. THE PRICE OF THE MILK IS DECIDED ON THE BASIS OF FATS BY THE ASSESSEE, THE MILK IS PROCESSED IN THE PLANT OF THE ASSESSEE BUT AT THE STAGE OF TESTING, THE RISK AND REWARD IS WITH THE PRIMARY SO CIETY. THE ASSESSEE PAID 3% ON COST OF THE PURCHASE PRICE OF M ILK TO THE PRIMARY SOCIETY. THE RELATIONSHIP BETWEEN THE ASSES SEE AND PRIMARY SOCIETY IS PRINCIPAL TO PRINCIPAL BASIS. IT IS UNDISPUTED FACT ITA NO. 1329/JP/2018 DCIT VS M/S SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SA HAKARI SANGH LTD. 3 THAT THE PURCHASE PRICE AND PURCHASE DIFFERENCE HAS BEEN CLAIMED BY THE ASSESSEE UNDER TWO HEADS BUT EXPENSES DEBITE D UNDER THE PURCHASE DIFFERENCE IS COST OF GOODS PURCHASED. BY RESPECTFULLY FOLLOWING THE COORDINATE BENCH DECISION IN ASSESSEE S OWN CASE FOR A.Y. 2008-09 WE HOLD THAT THE ASSESSEE IS NOT L IABLE TO DEDUCTION TDS U/S 194H OF THE ACT. ACCORDINGLY, ASS ESSEES APPEAL IS ALLOWED AND REVENUES APPEAL IS DISMISSED . 26. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED THE FACTS TO THIS ASSESSMENT YEAR IS ALSO IDENTICAL . THEREFORE FOLLOWING THE ABOVE DECISION OF THE HONBLE ITAT JA IPUR BENCH IN THE APPELLANT OWN CASE AS DISCUSS ABOVE I AM THE VI EW THAT APPELLANT IS NOT LIABLE TO DEDUCT TAX AT SOURCE U/S 194H OF THE IT ACT. HENCE I DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS. 2,81,93,209/-/ THIS GROUND IS ALLOWED. THUS, THE LD. CIT(A) REFERRED TO THE DECISION OF TH IS TRIBUNAL DATED 04.03.2016 FOR THE ASSESSMENT YEARS 2006-07 TO 2010 -11. WE FURTHER NOTE THAT THE TRIBUNAL IN ASSESSEES OWN CASE FOR T HE ASSESSMENT YEARS 2008-09, 2012-13 & 2013-14 HAS ALSO DELETED THE IDE NTICAL DISALLOWANCE MADE BY THE AO. THE TRIBUNAL FOR THE ASSESSMENT YEA R 2013-14 VIDE ORDER DATED 11.01.2017 IN ITA NO. 950/JP/2016 HAS A GAIN CONSIDERED THIS ISSUE IN PARA 2.1 TO 2.4 ARE AS UNDER:- 2.1 AT THE OUTSET OF HEARING, THE LD. AR OF THE AS SESSEE RELIED ON RECENT ORDER DATED 14-09-2016 OF THE ITAT, COORDINA TE BENCH, JAIPUR IN ASSESSEE'S OWN CASE IN ITA NO. 33/JP/2016 FOR THE ASSESSMENT YEAR 2012- 13 WHICH HAS BEEN DECIDED AGA INST THE REVENUE. FOR THE SAKE OF CONVENIENCE, THE OBSERVATI ON OF ITAT JAIPUR BENCH IN THE CASE OF THE ASSESSEE IS AS UNDE R:- ITA NO. 1329/JP/2018 DCIT VS M/S SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SA HAKARI SANGH LTD. 4 2.1 AT THE OUTSET OF THE HEARING, THE LD. AR OF T HE ASSESSEE SUBMITTED THAT THE ISSUES RAISED BY THE REVENUE IN THIS APPEAL ARE COVERED VIDE ORDER DATED 04-03-2016 OF ITAT COO RDINATE BENCH IN ASSESSEE'S OWN CASE (IN ITA NO. 87/JP/2015 FOR THE ASSESSMENT YEAR 2011-12 AND IN ITA NO. 96/JP/2015 O F REVENUE FOR THE ASSESSMENT YEAR 2011-12). THE LD. AR FURTHE R SUBMITTED THAT THE LD. CIT(A) HAS GRANTED THE RELIEF TO THE A SSESSEE ON THE BASIS OF DECISION OF THE ITAT COORDINATE BENCH IN A SSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2008-09 IN ITA NO. 277 /JP/2013 ASSESSEE AND IN ITA NO. 383/JP/2013 REVENUE BY OB SERVING AT PARA 4.3. OF HIS ORDER WHICH IS REPRODUCED AS UNDER :- 4.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSION O THE LD. AR . AO MADE THE DISALLOWANCE OF RS. 1,77,66,242/- BY HOLDING THAT PAYMENT OF MILK PRICE PURCHASE DIFFERENCE TO MILK SOCIETIES IS PAYMENT OF COMMISSI ON AND THEREFORE, ASSESSEE IS LIABLE FOR DEDUCTION OF TAX AT SOURCE U/S 194H WHICH IT FAILED TO DEDUCT. THE LD. AR ARGUED T HAT TOTAL BILL FOR MILK PURCHASE AND MARGIN IS RAISED BY THE SOCIE TIES ITSELF AND MILK PRICE PURCHASE DIFFERENCE REPRESENTS MARGIN OF PROFIT. FURTHER, THE SIMILAR DISALLOWANCE WAS MADE IN A.Y. 2008-09 WHICH HAS BEEN DELETED BY THE HON'BLE ITAT VIDE ITS ORDER DATED 14-07- 2015. IT IS SEEN THAT THE HON'BLE ITAT IN ASSESSEE' S OWN CASE FOR A.Y. 2008- 09 WHEREIN SIMILAR DISALLOWANCE WAS MADE , DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER:- APROPOS PAYMENT OF MILK PRICE DIFFERENCE, THE ASS ESSEE SOCIETY DOES NOT PURCHASE MILK FROM CATTLE OWNER AS MISTAKE NLY HELD BY LD. AO. SINCE THE LIABILITY HAS BEEN FASTENED UNDER MISCONCEPTION OF FACTS, WE HOLD THAT THIS PAYMENT ALSO IS NOT LIA BLE U/S 194H OF THE ACT. IN VIEW THEREOF, SECOND GROUND OF THE ASSE SSEE WITH REGARD TO DISALLOWANCE U/S 40(A)(IA) STANDS ALLOWED . RESPECTFULLY FOLLOWING THE SAME, THE DISALLOWANCE MADE BY THE AO IS DELETED. ITA NO. 1329/JP/2018 DCIT VS M/S SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SA HAKARI SANGH LTD. 5 2.2 THE LD. DR RELIED ON THE ORDER OF THE AO. 2.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORD THAT IN THE CASE OF THE ASSESSEE, RELIEF HAS BEEN GRANTED B Y THE LD. CIT(A) ON THE BASIS OF THE DECISION OF ITAT COORDIN ATE BENCH IN ASSESSEE'S OWN CASE (SUPRA). HENCE, RESPECTFULLY FO LLOWING THE DECISION OF COORDINATE BENCH IN ASSESSEE'S OWN CASE (SUPRA), WE DISMISS THE APPEAL OF THE REVENUE. 2.2 IN THIS APPEAL OF THE ASSESSEE, THE LD. CIT(A) DELETED THE DISALLOWANCE MADE BY THE AO U/S 40(A)(IA) OF THE AC T BY OBSERVING AS UNDER:- 4.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSION OF THE LD. AR. AO MADE THE DISALLOWANCE OF RS. 1,69,68,809/- BY HOLDING THAT PAYMENT OF MILK PRICE PURCHASE DIFFERENCE TO MILK SOCIETIES IS PAYMENT OF COMMISSI ON AND THEREFORE, ASSESSEE IS LIABLE FOR DEDUCTION OF TAX AT SOURCE U/S 194H WHICH IT FAILED TO DEDUCT. THE LD. AR ARGUED T HAT TOTAL BILL FOR MILK PURCHASE AND MARGIN IS RAISED BY THE SOCIE TIES ITSELF AND MILK PRICE PURCHASE DIFFERENCE REPRESENTS MARGIN OF PROFIT. FURTHER, THE SIMILAR DISALLOWANCE WAS MADE IN A.Y. 2008-09 WHICH HAS BEEN DELETED BY THE HON'BLE ITAT VIDE ITS ORDER DATED 14-07- 2015. IT IS SEEN THAT THE HON'BLE ITAT IN ASSESSEE'S OWN CASE FOR A.Y. 2008-09 WHEREIN SIMILAR DISALLOWANCE WAS MADE, DECI DED THIS ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER :- APROPOS PAYMENT FOR MILK PRICE DIFFERENCE, THE AS SESSEE SOCIETY DOES NOT PURCHASE MILK FROM CATTLE OWNER AS MISTAKE NLY HELD BY LD. AO. SINCE THE LIABILITY HAS BEEN FASTENED UNDER MISCONCEPTION OF FACTS, WE HOLD THAT THIS PAYMENT ALSO IS NOT LIA BLE U/S 194H OF THE ACT. IN VIEW THEREOF, SECOND GROUND OF THE ASSE SSEE WITH REGARD TO DISALLOWANCE U/S 40(A)(IA) STANDS ALLOWED . ITA NO. 1329/JP/2018 DCIT VS M/S SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SA HAKARI SANGH LTD. 6 SIMILARLY, THE HON'BLE ITAT VIDE ORDER DATED 4-03-2 016 FOR A.Y. 2006-07 TO 2010-11 IN PARA NO. 25 HELD THAT ASSESSE E IS NOT LIABLE FOR DEDUCTION OF TDS. I HAVE GONE THROUGH THE ORDER OF THE ITAT AND FACT S OF THE CASE BEFORE ME. THERE WERE NO CHANGE IN THE FACTS OF BOT H THE YEAR. THUS BY RESPECTFULLY FOLLOWING THE ORDER OF ITAT, S INCE THE ASSESSEE IS NOT LIABLE FOR DEDUCTIONS OF TAX AT SOU RCE U/S 194H, THE DISALLOWANCE MADE BY THE AO U/S 40(A)(IA) IS DE LETED. 2.3 DURING THE COURSE OF HEARING, THE LD. DR RELIED ON THE ORDER OF THE AO. 2.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORDS THAT IN THE CASE OF THE ASSESSEE, RELIEF HAS BEEN GRANTED B Y THE LD. CIT(A) ON THE BASIS OF THE DECISION OF ITAT COORDIN ATE BENCH IN ASSESSEE'S OWN CASE (SUPRA). HENCE, RESPECTFULLY FO LLOWING THE DECISION OF COORDINATE BENCH IN ASSESSEE'S OWN CASE (SUPRA), WE DISMISS THE APPEAL OF THE REVENUE. ACCORDINGLY, IN VIEW OF THE CONSISTENT VIEW TAKEN B Y THE TRIBUNAL ON THIS ISSUE IN ASSESSEES OWN CASE WE DO NOT FIND ANY REA SONS TO INTERFERE WITH THE IMPUGNED ORDER OF THE LD. CIT(A). IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/08/2019. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 07/08/2019. ITA NO. 1329/JP/2018 DCIT VS M/S SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SA HAKARI SANGH LTD. 7 * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- DCIT, CIRCLE, SIKAR. 2. IZR;FKHZ@ THE RESPONDENT- M/S SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD., SIKAR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1329/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR