ITO 24(3)(4), MUMBAI V. VINOD DATTA, MUMBAI

ITA 1346/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9156 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2007-2008
• Appeal Filed On: 14-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KU MAR SR
• Assessee Lawyers: JIGNESH R SHAH
• Section: 194C

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F : MUMBAI .. , ! / H.L. KARWA, PRESIDENT #$% &'(), $.. / NARENDRA KUMAR BILLAIYA, AM $ ! BEFORE SHRI H.L.KARWA, PRESIDENT AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA.NO.1346/MUM/2011 *# + *# + *# + *# + / / / / ASSESSMENT YEAR :2007-2008 I.T.O. 24 (3) (4) R.NO. 706, C-11, 7 TH FLOOR, B.K.C. BANDRA (E), MUMBAI 400 051. # # # # / VS. SHRI VINOD DATTA PROP. M/S. SHRE TRANSLINKS & RELIABLE INFOTRANS, 2D, 618, DHEERAJ VALLEY, SAI BABA NAGAR, GOREGAON (E), MUMBAI ,- $. .//0 ./ PAN AEGPD-8206-H ( -1 / // / APPELLANT) ( 23-1 / RESPONDENT) -1 4 $ FOR APPELLANT : SHRI MANOJ KUMAR (SR.A.R.) 23-1 5 4 $ /FOR RESPONDENT : SHRI JIGNESH R. SHAH # 5 6. / / / / DATE OF HEARING : 05.12.2012 78+ 5 6. / DATE OF PRONOUNCEMENT : 07.12.2012 9$: / ORDER PER H.L.KARWA, PRESIDENT THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A)-34, MUMBAI DATED 10.12.2010 RELATING TO THE ASSESSMENT YEAR 2007- 2008. THE ONLY GROUND RAISED BY THE REVENUE IN THIS APPEAL READS AS UNDER : 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION O F RS.58,29,628/- U/S. 40(A)(IA), WITHOUT APPRECIATING THE FACT THAT THE TRANSPORTATION OF GOODS OF ANOTHER PERSON ITSEL F CONSTITUTES A CONTRACT HENCE TDS ON THIS PAYMENT NEEDS TO BE MADE . 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE IS A PROPRIETOR OF SHREY TRANSLINKS AND RELIABLE INFOTRANS AND IS ASSE SSED AS AN INDIVIDUAL UNDER THE INCOME TAX ACT, 1961. WHILE FRAMING THE ASSESSM ENT, THE ASSESSING OFFICER DISALLOWED RS.58,29,628/- UNDER SECTION 40(A)(IA) O F THE INCOME TAX ACT, 1961 (IN SHORT ACT). DURING THE YEAR UNDER CONSIDERATI ON THE ASSESSEE CLAIMED EXPENDITURE IN RESPECT OF TRANSPORTATION CHARGES AT RS.94,12,389/-. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN AS TO WHY THE TRANSPORTATION CHARGES PAID SHOULD NOT BE DISALLOWED UNDER SECTION 40(A)(IA) OF THE ACT, AS NO TDS WAS DEDUCTED WHILE MAKING THE PAYMENT. THE EXPL ANATION GIVEN BY THE ASSESSEE WAS NOT FOUND SATISFACTORY AND THEREFORE, THE ASSESSING OFFICER MADE A DISALLOWANCE OF RS.58,29,628/- OUT OF RS.61,18,68 8/- HOLDING THAT THE SAID PAYMENTS ARE LIABLE FOR TDS AS PER SECTION 194C OF THE ACT. 3. ON APPEAL, THE CIT(A) DELETED THE ADDITION OF RS .58,29,628/- STATING THAT THERE WAS NO DEFAULT OF THE ASSESSEE IN NOT DEDUCTI NG TDS UNDER SECTION 194C OF THE ACT, AND HENCE, THE REVENUE IS IN APPEAL BEF ORE THE TRIBUNAL. 4. AT THE VERY OUT SET, SHRI JIGNESH R. SHAH, LEARN ED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE ARISING IN THIS A PPEAL IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY T HE DECISION OF I.T.A.T. VISAKHAPATNAM SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORTS VS. ADDL. CIT (2012) 136 ITD 23 (VISAKHAPATNAM) (S.B.), WHEREIN IT HAS BEEN HELD THE WORD PAYABLE USED IN SECTION 40(A)(IA) OF THE I.T. ACT, 1961 IS TO BE GIVEN ITS NATURAL MEANING AND, GOING BY THE STRICT INTERP RETATION, IT IS TO BE HELD THAT SECTION 40(A)(IA) OF THE ACT IS APPLICABLE ONLY TO EXPENDITURE WHICH IS PAYABLE AS ON 31 ST MARCH OF EVERY YEAR AND CANNOT BE INVOKED TO DISAL LOW THE AMOUNTS 3 WHICH HAVE ALREADY BEEN PAID DURING THE PREVIOUS YE AR, WITHOUT DEDUCTING TAX AT SOURCE. 5. IN THE INSTANT CASE, THE ENTIRE EXPENDITURE IN R ESPECT OF TRANSPORTATION CHARGES WAS PAID DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. AS PER BALANCE SHEET AS ON 31 ST MARCH, 2007 THERE ARE NO LIABILITIES WHICH MEANS THAT THE ASSESSEE HAS PAID THE TRANSPORTATION CHARGES BEFORE THE END OF THE FINANCIAL YEAR RELEVANT TO TH E ASSESSMENT YEAR UNDER CONSIDERATION. 6. EVEN IN PARA 5.3 OF THE ASSESSMENT ORDER, THE AS SESSING OFFICER HAS ADMITTED THIS FACT THAT THE TRANSPORTATION CHARGES CLAIMED BY THE ASSESSEE HAD BEEN PAID BEFORE THE END OF THE FINANCIAL YEAR. THU S IN VIEW OF DECISION OF I.T.A.T. VISAKHAPATNAM SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORTS (SUPRA), WE ARE OF THE VIEW THAT THERE W AS NO JUSTIFICATION IN MAKING THE DISALLOWANCE OF RS.58,29,628/- BY ASSESSING OFF ICER UNDER SECTION 40(A)(IA) OF THE ACT. IN THAT VIEW OF THE MATTER, WE DO NOT S EE ANY MERIT IN THE APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE C IT(A)-34, MUMBAI DATED 10 TH DECEMBER, 2010. CONSEQUENTLY, THE APPEAL STANDS DI SMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ; 6< /, 5 = .;/ 5 /6 >( ORDER PRONOUNCED IN THE OPEN COURT ON 07.12.2012. 9$: 5 8+ . $ = ?9#< 07 TH DECEMBER, 2012 8 5 @ SD/- SD/- (N.K.BILLAIYA) (H L KARWA) $. 9, $. 9, $. 9, $. 9, / ACCOUNTANT MEMBER ! / PRESIDENT MUMBAI; ?9# DATED 07 TH DECEMBER, 2012 .*#../ VBP, SR. PS 4 9$: 5 2*6AB C$B+6 9$: 5 2*6AB C$B+6 9$: 5 2*6AB C$B+6 9$: 5 2*6AB C$B+6/ COPY OF THE ORDER FORWARDED TO : 1. -1 / THE APPELLANT 2. 23-1 / THE RESPONDENT. 3. CIT(A) - 3 4 , MUMBAI 400 021. 4. D / CIT-24, MUMBAI 5. BE@ 2*6*# , , / DR F BENCH 6. @F / GUARD FILE 9$:# 9$:# 9$:# 9$:# / BY ORDER, 3B6 2*6 //TRUE COPY// G GG G/ // /> / > / > / > / ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI