Pushpa Ghansyamdas Bansal, Nashik V. Income-tax Officer,

ITA 1359/PUN/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2673 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 30-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: DHEERAJ KUMAR JAIN
• Section: 40A(3); 80C; 143(3); 194C

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KU MAR KEDIA , AM . / ITA NO. 1 3 59 /PN/201 4 / ASSESSMENT YEAR : 20 09 - 1 0 PUSHPA GHANSHYAMDAS BANSAL, G - 1, PRESTIGE POINT, NASHIK ROAD, NASHIK 422101 . / APPELLANT PAN: A GRPB5196R VS. THE INCOME TAX OFFICER , WARD 1( 1 ) , NASHIK . / RESPONDENT / APPELLANT BY : NONE / RESPONDENT BY : SHRI DHEERAJ KUMAR JAIN / DATE OF HEARING : 15 . 0 2 .201 6 / DATE OF PRONOUNCEMENT: 24 . 0 2 .201 6 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - I , NASHIK , DATED 12 . 0 5 .20 1 4 RELATING TO ASSESSMENT YEAR 20 09 - 1 0 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE AC T) . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX, (APPEAL) - I, NASHIK IS NOT JUSTIFIED IN ITA NO. 1 3 59 /PN/20 1 4 PUSHPA GHANSHYAMDAS BANSAL 2 CONFIRMING THE DISALLOWANCE MADE BY THE AO OF RS.10,34 ,294/ - BY INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE ACT. 2. WITHOUT PREJUDICE TO OTHER GROUNDS OF APPEALS AND ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX, (APPEAL) - I, NASHIK HAS ERRED IN HOLDING THAT APPELLANT'S CASE IS NOT COVERED UNDER ANY OF THE EXCEPTIONS MENTIONED IN RULE 8 DD OF THE INCOME TAX RULES PARTICULARLY WHEN THE TOWN IS NOT SERVED BY ANY BANK TO THE PAYEE. 3. WITHOUT PREJUDICE TO OTHER GROUNDS OF APPEALS AND ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX, (APPEAL) - I, NASHIK HAS ERRED IN HOLDING THAT APPELLANT'S CASE IS NOT COVERED UNDER ANY OF THE EXCEPTIONS MENTIONED IN RULE 8 DD OF THE INCOME TAX RULES PARTICULARLY WHEN THE PAYMENTS WERE MADE TO THE DRIVERS OF THE TRUCK AS AGENT OF THE APPELLANT TO MAKE PAYMENT TO RESPECTIVE TRUCK OWNERS. 4. WITHOUT PREJUDICE TO OTHER GROUNDS OF APPEALS AND ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX, (APPEAL) - I, NASHIK HAS ERRED IN HOLDING THAT APPELLANT'S CASE IS NOT COVERED UNDER ANY OF THE EXCEPTIONS MENTIONED IN RULE 8 DD OF THE INCOME TAX RULES PARTICULARLY WHEN SOME OF THE PAYMENTS ARE MADE ON HOLIDAYS. 5. WITHOUT PREJUDICE TO OTHER GROUNDS OF APPEALS AND ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX, (APPEAL) - I, NASHIK IS NOT JUSTIFIED IN DOUBTING THE GENUINENESS OF PAYMENT WHEN GENUINENESS OF PAYMENT WAS NOT IN DISPUTE. 6. WITHOUT PREJUDICE TO OTHER GROUNDS O F APPEALS AND ON THE BASIS OF FACTS 6. WITHOUT PREJUDICE TO OTHER GROUNDS O F APPEALS AND ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX, (APPEAL) - I, NASHIK IS NOT JUSTIFIED IN NOT ALLOWING THE DEDUCTION OF BASIC LIMIT OF RS.20,000/ - WHILE CONFIRMING THE DISALLOWANCE MADE BY THE AO BY IN VOKING THE PROVISIONS OF SECTION 40A(3) OF THE ACT. 7. ON THE BASIS OF FACTS AND IN THE CIRCUM STANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX, (APPEAL) - I, NASHIK IS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF DEDUCTION U/S. 80 C OF THE ACT MADE BY THE AO OF RS.35,900/ - ON ACCOUNT OF TUITION FEES PAID IN RESPE CT OF GRANDCHILDREN OF THE APPELLANT. 8 . ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX, (APPEAL) - I, NASHIK IS NOT JUSTIFIED IN CONFIRMING THE DISA LLOWANCE MADE BY THE AO OF RS.55,050/ - ON ACCOUNT OF HANDLING CHARGES PAID TO MR. BALU MALODE BY INVOKING PROVISIONS OF SECTION 40(A)(IA) OF THE ACT PARTICULARLY WHEN THE ENTIRE PAYMENT WAS MADE DURING THE YEAR AND NO AMOUNT WAS PAYABLE AS ON 3 1 .03.2009. W ITHOUT PREJUDICE TO ABOVE, THE COMMISSIONER OF INCOME TAX, (APPEAL) - I, NASHIK IS NOT JUSTIFIED IN NOT ALLOWING THE BASIC LIMIT OF RS.50,000/ - FOR APPLICABILITY OF PROVISIONS OF SECTION 194C OF THE ACT. 9. WITHOUT PREJUDICE TO GROUND OF APPEAL NO. 8 AND O N THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX, (APPEAL) - I, NASHIK IS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO OF RS.55,050/ - ON ACCOUNT OF HANDLING CHARGES PAID TO MR. BALU MALODE BY INVOKING P ROVISIONS OF SECTION 40(A)(IA) OF THE ACT PARTICULARLY WHEN THE SAME IS IN NATURE OF SALARY AS THERE WAS EMPLOYER ITA NO. 1 3 59 /PN/20 1 4 PUSHPA GHANSHYAMDAS BANSAL 3 EMPLOYEE OR MASTER AGENT RELATIONSHIP BETWEEN MR. MALODE AND APPELLANT. 10. THE APPELLANT CRAVES FOR ADDITION TO, DELETION, ALTERATION, MODI FICATION, CHANGE ANY OF THE GROUNDS CON FIRM ING THE ABOVE MENTIONED PENALTY. 2. DESPITE SERVICE OF NOTICE, NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY APPLICATION WAS MOVED FOR ADJOURNMENT , HENCE, WE PROCEED TO DECIDE THE PRESENT APPEAL AFTER HEARING T HE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE . 3. THE ISSUE IN GROUNDS OF APPEAL NO.1 TO 6 RAISED BY THE ASSESSEE IS AGAINST THE DISALLOWANCE MADE UNDER SECTION 40A(3) OF THE ACT AT RS.10,34,294/ - . 4. BRIEFLY, THE FACTS RELATING TO THE ASSESSE E ARE THAT, THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF TRANSPORTATION AND HAD HIRED TRANSPORT VEHICLES FROM VARIOUS TRANSPORTERS LOCATED AT NASHIK AS WELL AS OUTSIDE NASHIK. THE ASSESSING OFFICER NOTED FROM THE PERUSAL OF THE ACCOUNTS OF ASSESSEE THAT CA SH PAYMENTS OF MORE THAN RS.20,000/ - WERE MADE ON VARIOUS OCCASIONS TO VARIOUS TRANSPORTERS. THE TOTAL CASH PAYMENT S AMOUNTED TO RS.10,34,294/ - . THE ASSESSING OFFICER WAS OF THE VIEW THAT THE CASH PAYMENTS WERE IN CONTRAVENTION OF PROVISIONS OF SECTION 4 0A(3) OF THE ACT AND HENCE, THE ADDITION OF RS.10,34,294/ - WAS MADE IN THE HANDS OF ASSESSEE. 5. THE EXPLANATION OF THE ASSESSEE BEFORE THE CIT(A) WAS THAT THE SAID CASH PAYMENTS WERE MADE BECAUSE TRANSPORTERS WERE LOCATED OUTSIDE NASHIK AND DID NOT HAV E THE BANK ACCOUNT IN NASHIK. HE FURTHER STATED THAT THE CASH WAS REQUIRED FOR DRIVERS OF THE TRANSPORTERS FOR VARIOUS EXPENSES SUCH AS FUEL , P AYMENT OF TOLLS AND REPAIRS, ETC. ANOTHER CONTENTION RAISED BY THE ASSESSEE ITA NO. 1 3 59 /PN/20 1 4 PUSHPA GHANSHYAMDAS BANSAL 4 WAS THAT ALL CASH PAYMENTS WERE GEN UINE AND ALSO THE TDS WAS DEDUCTED WHEREVER APPLICABLE. THE CIT(A) NOTED THAT THE CASH PAYMENTS HAVE BEEN MADE TO VARIOUS TRANSPORTERS INCLUDING THOSE LOCATED IN NASHIK. HE FURTHER COMMENTED THAT THE ASSESSEE WAS TO MAKE PAYMENT ON AGREED RATE FOR HIRING THE SERVICES OF THE TRANSPORTERS. THE CIT(A) WAS OF THE VIEW THAT PROVIDING CASH TO THE DRIVERS / STAFF OF THE VEHICLES FOR EXPENSES SUCH AS FUEL, TOLL, FOOD, ETC. WAS THE RESPONSIBILITY OF THE HIRED TRANSPORTERS AND NOT THE ASSESSEE AND WHENEVER VEHICLE IS HIRED BY A PERSON, THE TRANSPORTERS GIVE CASH TO ITS DRIVERS FOR PETROL, TOLL, UNFORESEEN REPAIRS, ETC. IN VIEW THEREOF, THE DISALLOWANCE OF RS.10,34,294/ - WAS UPHELD. 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7. DESPITE SEVERAL OPPO RTUNITIES HAVE GIVEN TO THE ASSESSEE TO ARGUE THE APPEAL FROM DATE TO DATE, BUT NONE HAS REPRESENTED THE ASSESSEE, EXCEPT FOR FILING THE ADJOURNMENT APPLICATIONS FROM DATE TO DATE. IN VIEW OF THE SMALLNESS OF ISSUE RAISED IN THE PRESENT APPEAL, THE APPEAL WAS HEARD AND IS BEING DISPOSED OF. 8. THE ISSUE RAISED VIDE GROUNDS OF APPEAL NO.1 TO 6 IS WITH REGARD TO DISALLOWANCE MADE UNDER SECTION 40A(3) OF THE ACT. THE REQUIREMENT S OF THE SAID SECTION ARE THAT WHERE ANY CASH PAYMENT IS MADE OVER AND ABOVE R S.20,000/ - , THEN SUCH CASH PAYMENTS ARE NOT TO BE ALLOWED AS DEDUCTION IN THE HANDS OF ASSESSEE. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE TOTAL CASH PAYMENTS MADE BY THE ASSESSEE WERE RS.10,34,294/ - . THE ASSESSEE W AS ENGAGED IN TRANSPORT BUSINESS AND WAS HIRING VEHICLES FROM VARIOUS TRANSPORTERS BOTH WITHIN NASHIK ITA NO. 1 3 59 /PN/20 1 4 PUSHPA GHANSHYAMDAS BANSAL 5 AND OUTSIDE NASHIK. THE EXPLANATION OF THE ASSESSEE VIS - - VIS CASH PAYMENTS TO DRIVERS OF TRANSPORTERS VEHICLES WAS THAT THE PAYMENTS WERE MADE IN ORDER TO LOOK AFTER VARIOUS EXPENSES ON ROA D. HOWEVER, THE CLAIM OF THE ASSESSEE WAS REJECTED BY BOTH THE AUTHORITIES BELOW AS THE RESPONSIBILITY OF THE CASH EXPENDITURE TO BE INCURRED ON ROAD WAS OF THE TRANSPORTERS, FOR WHICH THE TRANSPORTERS ARE SUPPOSED TO HANDOVER CASH TO THE DRIVERS OF THE VEHICLES. THE ASSESSEE ON THE OTHER HAND, FURTHER CLAIMED THAT THE TDS PROVISIONS WERE COMPLIED WITH WHEREVER APPLICABLE. IN THE ENTIRETY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WE FIND SOME FORCE IN THE CLAIM OF TH E ASSESSEE. HOWEVER, IN THE ABSENCE OF ANY DETAILS BEING AVAILABLE BEFORE US, WE DEEM IT FIT TO RESTORE THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER TO D ECIDE AS PER FACT AND LAW. THE ASSESSEE IS DIRECTED TO FILE THE NECESSARY EVIDENCE THAT THE CASH W AS GIVEN TO THE DRIVERS FOR MEETING VARIOUS EXPENSES AND ALSO TO EXPLAIN HOW THAT CASH WAS REIMBURSED BY THE TRANSPORTERS, SINCE THE ONUS OF INCURRING THE SAID EXPENDITURE WAS ON TRANSPORTERS. THE ASSESSEE IS FURTHER DIRECTED TO FURNISH COMPLETE DETAILS I N THIS REGARD BEFORE THE ASSESSING OFFICER, WHO SHALL VERIFY THE CLAIM OF ASSESSEE AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW. THE GROUNDS OF APPEAL NO.1 TO 6 RAISED BY THE ASSESSEE ARE THUS, ALLOWED FOR STATISTICAL PURPOSES. 9. THE ISSUE IN GROUND OF A PPEAL NO.7 IS AGAINST THE CLAIM OF DEDUCTION UNDER SECTION 80C OF THE ACT AGAINST THE AMOUNT PAID ON ACCOUNT OF TUITION FEES IN RESPECT OF GRAND CHILDREN OF THE ASSESSEE. THE SAID CLAIM WAS REJECTED BEING OUTSIDE THE PROVISIONS OF THE ACT. WE FIND NO MER IT IN THE AFORESAID GROUND OF APPEAL RAISED BY THE ASSESSEE SINCE NO DEDUCTION IS TO BE ALLOWED UNDER SECTION 80C OF THE ACT ON ACCOUNT OF TUITION FEES PAID IN RESPECT OF GRAND ITA NO. 1 3 59 /PN/20 1 4 PUSHPA GHANSHYAMDAS BANSAL 6 CHILDREN OF THE ASSESSEE. THE GROUND OF APPEAL NO.7 RAISED BY THE ASSESSEE IS THUS, DISMISSED. 10. NOW, COMING TO THE GROUNDS OF APPEAL NO.8 AND 9 RAISED BY THE ASSESSEE I.E. DISALLOWANCE MADE BY INVOKING PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AMOUNTING TO RS.55,050/ - . 11. THE ASSESSEE HAD PAID SUM OF RS.55,050/ - TO ONE MR. BA LU MALODE AS HANDLING CHARGES . THOUGH THE PAYMENT WAS MADE ON VARIOUS DATES AND EACH PAYMENT WAS LESS THAN RS.20,000/ - , TOTAL AGGREGATING AMOUNT WAS MORE THAN RS.50,000/ - . THE CONTENTION OF THE ASSESSEE WAS THAT SINCE THE TOTAL PAYMENT WAS LESS THAN RS.7 5,000/ - , THE PROVISIONS OF SECTION 194C WERE NOT ATTRACTED. THE CLAIM OF THE ASSESSEE WAS REJECTED SINCE THE FIGURE OF RS.75,000/ - WAS SUBSTITUTED FOR RS.50,000/ - W.E.F. 01.07.2010 . THE SECOND CONTENTION OF THE ASSESSEE THAT THE AMOUNT WAS PAID AND WAS N OT PAYABLE ON THE CLOSE OF THE YEAR, WAS ALSO REJECTED. 12. THE ASSESSEE IS IN APPEAL AGAINST THE AFORESAID FINDINGS OF AUTHORITIES BELOW. 13. WE FIND NO MERIT IN THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THIS REGARD. THE YEAR UNDER APPEAL BEFORE US IS ASSESSMENT YEAR 2009 - 10 , UNDER WHICH AS PER SECTION 194C OF THE ACT, WHERE CASH PAYMENT IS MADE IN VARIOUS INSTALLMENTS AGGREGATING MORE THAN RS.50,000/ - , THEN THE REQUIREMENT OF THE ACT IS TO DEDUCT TAX AT SOURCE. THE ASSESSEE HAS FAILED TO DEDUCT TAX AT SOURCE AND HENCE, THE SAID EXPENDITURE IS DISALLOWABLE UNDER SECTION 40(A)(IA) OF THE ACT. THE SECOND CLAIM OF THE ASSESSEE THAT THE AMOUNT HA S BEEN PAID DURING ITA NO. 1 3 59 /PN/20 1 4 PUSHPA GHANSHYAMDAS BANSAL 7 THE YEAR AND NOTHING IS PAYABLE AT THE CLOSE OF THE YEAR, ALSO DOES NOT STAND IN VIEW OF DECISION OF PUNE BENCH OF TRIBUNAL IN VARIOUS CASES. HENCE, THE GROUNDS OF APPEAL NO.8 AND 9 ARE DISMISSED. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. 14 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AS INDI CATED ABOVE. ORDER PRONOUNCED ON THIS 24 TH DAY OF FEBRU ARY , 201 6 . SD/ - SD/ - (PRADIP KUMAR KEDIA) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 24 TH FEBR UARY , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE A PPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - I, NASHIK ; 4. / THE CIT - I, NASHIK ; 5. , , , - / DR SMC , ITAT, PUNE; / BY ORDER , // T RUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE