The ITO, Ward 1 (3), RAJKOT-GUJARAT V. Shri Rajesh A Boricha, RAJKOT-GUJARAT

ITA 1369/RJT/2010

• Counselvise Citation: 136924914 RSA 2010
• Duration Of Justice: 2 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-07-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 31-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: D M RINDANI F
• Keywords: Capital expenditure
• Section: 143(3); 194C; 37; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT BEFORE SHRI T K SHARMA, JM AND SHRI D K SRIVASTAVA, AM ITA NO. 1369 /RJ T/201 0 ASSESSMENT YEAR : 200 7 - 0 8 ITO, WARD - 1(3 ), RAJKOT V. SHRI RAJESH A BORICHA MANDEEP CHAMBERS KUVADAVA ROAD, RAJKOT PAN: AGMPB 7158 E DATE OF HEARING : 23 .0 7 .2013 DATE OF PRONOUNCEMENT : 13 . 0 9 .2013 REVENUE BY : SHRI AVINASH KUMAR, SR. DR ASSESSEE BY : SHR I D M RINDANI, F CA ORDER D. K. SRIVASTAVA : THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - I, RAJKOT ON 22 . 10 .201 0 , ON THE FOLLOWING GROUNDS: - 1. THE LD. CIT (A) HAS ERRED ON FACTS AND LAW IN DELETING THE DISALLOWANC E MADE AS UNDER: - ( I ) U/S 40(A)(IA) OF THE ACT (194C) RS.80,41,529/ - TOTAL RS.80,41,529/ - 2. ON THE FACTS OF THE CASE , THE LD. CIT (A) OUGHT TO HAVE UPHELD THE ORDER OF THE A SSESSING O FFICER . 3 . IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. CIT (A) MA Y BE SET - ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. 2. THE APPEAL FILED BY THE REVENUE WAS EARLIER DISMISSED BY THIS TRIBUNAL BY ITS ORDER DATED 03.08.2012 WITH THE FOLLOWING OBSERVATIONS: - 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE RECORD AVAILABLE BEFORE US AND ALSO GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND THE TRIBUNAL DECISION CITED BY THE LD AR OF THE ASSESSEE. SINCE IN THE BALANCE SHEET SUBMITTED BY THE LD AR AS ON 31.03.2007, NO AMOUNT IS OUTSTANDING AS PAYABLE IN RESPE CT OF TRUCK FREIGHT EXPENSE DISALLOWED BY THE AO U/S 40(A)(IA), NO DISALLOWANCE COULD BE MADE AS PER THIS DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL CITED BY THE LD AR OF THE ASSESSEE HAVING BEEN RENDERED IN THE CASE OF MERILYN SHIPPING & TRANSPORT (SUP RA). 2 1369 - RJT - 2010 SHRI RAJESH A BORICHA RESPECTFULLY FOLLOWING THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL, WE DECLINE TO INTERFERE IN THE ORDER OF THE LD. CIT(A). 3. THE AFORESAID ORDER PASSED BY THIS TRIBUNAL WAS CHALLENGED BY THE REVENUE BEFORE THE HONBLE HIGH COURT. BY ITS JUDG MENT DATED 02.05.2013 IN CIT V. RAJESH A BORICHA, TAX APPEAL NO.832 OF 2012, THE HONBLE HIGH COURT HAS SET ASIDE THE AFORESAID ORDER PASSED BY THIS TRIBUNAL AND RESTORED THE MATTER TO THE FILE OF THIS TRIBUNAL FOR FRESH CONSIDERATION OF OTHER ISSUES, IF ANY, REGARDING DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT. PURSUANT TO THE AFORESAID DIRECTIONS GIVEN BY THE HONBLE HIGH COURT, THE APPEAL WAS LISTED FOR HEARING ON 05.06.2013, 08.07.2013 AND 23.07.2013. THE HEARING TOOK PLACE ULTIMATELY ON 23.07.20 13. 4. THE ASSESSEE IS AN INDIVIDUAL. HE IS ENGAGED IN THE BUSINESS OF CARRYING OUT TRANSPORT CONTRACT S UNDER THE NAME OF STYLE OF SHRI KRISHNA KRUPA ROADWAYS AT RAJKOT . HE FILED HIS RETURN OF INCOME ON 31.10.2007 RETURNING TOTAL INCOME AT RS.1,73,540/ - . THE RETURN WAS ACCOMPANIED BY TAX AUDIT REPORT IN WHICH THE NATURE OF BUSINESS OF THE ASSESSEE HAS BEEN DESCRIBED AS TRANSPORT CONTRACTORS. THE AUDITED TRADING AND PROFIT & LOSS ACCOUNT FOR THE YEAR UNDER APPEAL WAS FILED ALONG WITH THE RETURN OF INCOME IN WHICH TRUCK RENT INCOME AMOUNTING TO RS.84,13,537/ - AND TRUCK RENT EXP. A MOUNTING TO RS.80,41,529/ - HAVE BEEN SHOWN. IT IS EVIDENT FROM THE AUDITED TRADING AND PROFIT & LOSS ACCOUNT THAT THE ASSESSEE HA S CLAIMED DEDUCTION FOR A SUM OF RS.80,41,529/ - BEING TRUCK RENT EXP. THE ASSESSING OFFICER NOTICED THAT TAX WAS NOT DEDUCTED AT SOURCE OUT OF THE AFORESAID PAYMENTS AS REQUIRED BY SECTION 194C. HE THEREFORE CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY THE PAYMENT OF RS.80,41,529/ - MADE TO TRUCK OW NERS/DRIVERS/LORRY OWNERS FOR CARRIAGE OF GOODS WITHOUT DEDUCTING AT SOURCE AS REQUIRED BY SECTION 194C SHOULD NOT BE DISALLOWED IN VIEW OF THE PROVISIONS OF SECTION 40(A)(IA) . IT IS STATED IN PARAGRAPH 4.1 OF THE ASSESSMENT ORDER THAT THE ASSESSEE DID NOT FILE ANY EXPLANATION INSPITE OF OPPORTUNITY GIVEN BY THE ASSESSING OFFICER TO HIM. THE ASSESSING OFFICER THEREFORE PROCEEDED TO EXAMINE THE MATTER ON MERIT. HE NOTICED THAT EIGHT CONSIGN O RS , NAMELY, (I) BANSAL PARIVAHAN (INDIA PVT LTD); (II) KIRAN HYDRAUL IC NEEDS PVT LTD; (III) LALJI MULJI TRANSPORT CO LTD; (IV) OM 3 1369 - RJT - 2010 SHRI RAJESH A BORICHA HOUSE HOLD APPLIANCE; (V) KHEDUT SOLVEX PVT LTD; (VI) J N ENTERPRISE; (VII) JAYPEE TRADING CO AND (VIII) V TRANS (INDIA) LTD . HA VE PAID AMOUNTS AGGREGATING TO RS.84,13,357/ - TO THE ASSESSEE FOR USING THE SERVICES OF THE ASSESSEE FOR CARRIAGE OF THEIR GOODS. THE ASSESSING OFFICER ALSO NOTICED THAT ALL THE AFORESAID CONSIGNORS HAD DEDUCTED TAX AT SOURCE AMOUNTING TO RS.95,813/ - OUT OF THE AFORESAID PAYMENTS AGGREGATING TO RS.84,13,357/ - MADE BY THE M TO THE ASSESSEE. THE ASSESSING OFFICER FURTHER NOTICED THAT THE ASSESSEE HAD ENGAGED THE SERVICES OF VARIOUS PERSONS FOR TRANSPORTING THE GOODS OF THE CONSIGNORS TO THE ADDRESSES OF THE CONSIGNE E S BUT DID NOT DEDUCT THE TAX AT SOURCE OUT OF THE PAYMENTS AGGREGATING TO RS.80,41,529/ - MADE BY THE ASSESSEE TO THEM. HE THEREFORE INVOKED SECTION 40(A)(IA) AND DISALLOWED THE IMPUGNED EXPENDITURE WITH THE FOLLOWING OBSERVATIONS: - 5.2 IT MAY BE MENTIONED THAT TDS IS MANDATORY U/S 40(A)(IA) OF THE ACT AND UNDER THE SAID SECTION, THE AMOUNT OF EXPENDITURE IS NOT DEDUCTIBLE AS EXPENDITURE IN COMPUTING THE INCOME CHARGEABLE UNDER THE PROFIT AND GAIN FROM BUSINESS OR PROFESSION. THEREFORE, SUB - CLAUSE (IA) OF CLAUSE (A) OF SECTION 40 OF THE IT ACT PROVIDES THAT AMOUNT S PAYABLE TO A CONTRACTOR OR SUB - CONTRACTOR, BEING RESIDENT, FOR CARRYING OUT ANY WORK, ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII - B AND IF SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION HAS NOT BEEN PAID, DURING THE PREVIOUS YEAR OR IN TH E SUBSEQUENT YEAR BEFORE EXPIRY OF TIME PRESCRIBED UNDER SUB SECTION (1) OF SECTION 200, THE SAID AMOUNTS SHALL NOT BE DEDUCTED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFIT & GAINS OF BUSINESS OR PROFESSION. 5.3 IT MAY BE MENTIONED THAT DUR ING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS RECEIVED TRANSPORT RECEIPT OF RS.84,13,357/ - FROM DIFFERENT PERSONS (1) BANSAL PARIVAHAN (INDIA PVT LTD) FOR RS.71,61,521/ - (2) KIRAN HYDRAULIC NEEDS PVT LTD FOR RS.54,000/ - , (3) LALJI MULJI TRANSPORT CO L TD FOR RS.1,16,030/ - , (4) OM HOUSE HOLD APPLIANCE FOR RS.21,300/ - , (5) KHEDUT SOLVEX PVT LTD FOR RS.23,933/ - , (6) J. N. ENTERPRISE FOR RS.1,14,450/ - , (7) JAYPEE TRADING CO. FOR RS.64,823/ - AND (8) V. TRANS (INDIA) LTD. FOR 4 1369 - RJT - 2010 SHRI RAJESH A BORICHA RS.8,57,480/ - . THESE SEVEN PAYEE HAVE DEDUCTED TDS OF RS.95,813/ - ON TOTAL PAYMENT OF RS.84,13,357/ - . IN TURN THEY HAVE ISSUED FORM NO.16A WHICH HAVE BEEN FILED BY THE ASSESSEE WITH THE RETURN OF INCOME AND THE ASSESSEE HAS CLAIMED REFUND ON THE SAME. 5.4 NOW, THE FOLLOWING COLUMN IN FOR M NO.16A SHALL BE VERY PERTINENT AND CRUCIAL IN ISSUE UNDER REV IEW : NAME & ADDRESS OF THE PERSON TO : SHRI KRISHNA KRUPA ROADWAYS WHOM PAYMENT MADE OR IN : RAJKOT WHOSE ACCOUNT ITS CREDITED : 5.5 THUS, THE ABOVE COLUMN OF FORM NO.16A CLEARLY PR OVES THAT THE PAYMENT HAS BEEN RECEIVED BY THE ASSESSEE, WHICH CLEARLY ESTABLISHES THAT THE ASSESSEE IS NOT A MERE COMMISSION AGENT BUT TRANSPORT CONTRACTOR. HAD HE BEEN COMMISSION AGENT, THE PAYEE PARTY WOULD HAVE PAID BY AMOUNT TO THE TRANSPORT CONTRACTO R AND AS A COMMISSION AGENT, THE ASSESSEE WOULD HAS JUST RECEIVED THE COMMISSION AMOUNT OF, SAY RS.300/ - OR RS.500/ - PER DEAL. BUT, THE SCENARIO IS VERY CLEAR IN THIS CASE. THE ASSESSEE IS A TRANSPORT CONTRACTOR, AND THEREBY HE DIRECTLY RECEIVED PAYMENT FR OM THE ABOVE 7 PARTIES. BUT, WHILE INCURRING THE EXPENDITURE, THE ASSESSEE HAD NOT DEDUCTED TDS U/S 194C OF THE IT ACT, WHICH HE WAS SUPPOSED TO DO AND THEREBY THE ASSESSEE HAS MADE DEFAULT BY NON COMPLYING THE PROVISIONS OF TDS. 5. THE ASSESSEE CHALLENG ED THE AFORESAID DISALLOWANCE MADE BY THE AO BEFORE THE LD . CIT(A). IT WAS SUBMITTED BEFORE THE LD . CIT(A) THAT THE ASSESSEE WAS A MERE TRANSPORT COMMISSION AGENT AND THEREFORE HE WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE OUT OF THE PAYMENTS MADE BY HIM TO VARIOUS TRUCK OWNERS/DRIVERS ETC. BY HIS LETTER DATED 28.07.2010, THE LD . CIT(A) CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER. THE RELEVANT PORTION OF THE SAID LETTER DATED 28.07.2010 SENT BY THE LD . CIT(A) TO THE ASSESSING OFFICER READS AS UNDER: - 2. IN THIS CASE, MAJOR ADDITION HAS BEEN MADE U/S 40(A)(IA) FOR NON - DEDUCTION OF TAX FROM TRANSPORT PAYMENTS. ADDITION WAS MADE BECAUSE NO REPLY WAS RECEIVED FROM THE ASSESSEE. 5 1369 - RJT - 2010 SHRI RAJESH A BORICHA 3. AT THE APPELLATE STAGE, A NEW ADVOCATE APPEARED AND HE HAS FILED A REPLY STATING THAT THE ASSESSEE IS ONLY A TRANSPORT COMMISSION AGENT AND HIS INCOME IS FROM COMMISSION ONLY AND ENTRIES FOR PAYMENT AND RECEIPTS WERE MADE SIMPLY FOR THE PURPOSE OF RECONCILING THE TDS CERTIFICATES. CASE RECORDS AND PAST RECORDS OF THE ASSESSEE A LSO SHOW THAT HE WAS BASICALLY A COMMISSION AGENT FOR ARRANGING VEHICLES FOR OTHERS AND THE ASSESSEE HIMSELF DOES NOT OWN ANY VEHICLE. 4. IN VIEW OF THE ABOVE, SUBMISSIONS OF THE ASSESSEE ARE BEING SENT TO YOU ALONG WITH THE DETAILS FOR SUBMISSION OF A F ACTUAL REPORT BY YOU REGARDING THE CLAIM OF THE ASSESSEE AND NATURE OF BUSINESS OF THE ASSESSEE. 4. FOR THE PURPOSE OF SENDING THIS REPORT, YOU ARE AUTHORIZED TO MAKE ENQUIRIES, AS DEEMED FIT BY YOU. 6. IN REPLY, THE ASSESSING OFFICER SUBMITTED HIS REMA ND REPORT DATED 07.10.2010 TO THE LD . CIT(A) WHICH READS AS UNDER: - 2. WITH REFERENCE TO THE ABOVE, IT IS SUBMITTED AS UNDER: - (A) THE ASSESSEE, AN INDIVIDUAL, IS ENGAGED IN TRANSPORT CONTRACT BUSINESS. THE CASE WAS SELECTED FOR SCRUTINY WITH DUE PERMI SSION OF HONBLE CHIEF COMMISSIONER OF INCOME TAX, RAJKOT. THE REASON FOR SEEKING PERMISSION IS THAT THE ASSESSEE WAS REQUIRED TO DEDUCT TDS ON TRUCK RENT EXPENSES OF RS.80,41,529/ - , WHICH WAS NOT MADE. (B) THE ASSESSMENT ORDER WAS MADE U/S 143(3) OF THE I.T. ACT, 1961. FOR FURTHER CLARIFICATION OF THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE YOU R HONOUR, WHICH WAS FORWARDED BY YOUR ESTEEMED OFFICE VIDE LETTER DATED 18/08/2010, THE ASSESSEE WAS REQUESTED TO ATTEND PROCEEDINGS. THE AR OF THE ASSESSEE ATTENDE D PROCEEDINGS ON 05/10/2010. (C) AR OF THE ASSESSEE SUBMITTED HIS POINT OF VIEW. HE PRESSED ON THE ISSUE THAT THE ASSESSEE WAS NOT A TRANSPORT CONTRACTOR BUT HE WAS A COMMISSION AGENT. 6 1369 - RJT - 2010 SHRI RAJESH A BORICHA (D) THE ABOVE POINTS PRESSED BY THE AR OF THE ASSESSEE ARE NO T ACCEPT ABLE. FIRST OF ALL, THE CASE WAS SELECTED FOR SCRUTINY AFTER DUE PERMISSION GRANTED BY HONBLE CHIEF C.I.T., RAJKOT. THE MAIN ISSUE FOR SEEKING PERMISSION WAS NON DEDUCTION OF TDS ON TRUCK RENT EXPENSES CLAIMED BY THE ASSESSEE. FURTHER, THE ASSESSEE HAS DI RECTLY RECEIVED PAYMENT FROM 7 PARTIES. THE SAID PARTIES HAD DEDUCTED TDS U/S 194C(1). BUT, WHILE INCURRING EXPENDITURE, THE ASSESSEE, HE BEING THE SUB - CONTRACTOR, HAS NOT DEDUCTED TDS U/ 194C(2). THE CLAIM OF THE ASSESSEE THAT HE WAS MERELY A COMMISSION A GENT AND NOT A TRANSPORT SUB - CONTRACTOR CANNOT BE ACCEPTED AS THE INCOME SHOWN BY HIM WAS NOT DUE TO COMMISSION INCOME BUT WERE DUE TO CONTRACT RECEIPTS. HENCE THE ENTIRE EXPENSES OF RS.80,41,529/ - WERE DISALLOWED U/S 40(A)(IA) OF THE ACT AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. ( E ) ON THE BASIS OF THE ABOVE REPORT, IT IS HUMBLY REQUESTED TO YOUR HONOUR THAT THE FINDINGS GIVEN IN THE ASSESSMENT ORDER MAY KINDLY BE UPHELD AND PLEA OF THE ASSESSEE MAY KINDLY BE REJECTED. 7. BY HIS ORDER DATED 2 2.10.2010 , THE LD . CIT(A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS: - 3.3 I HAVE CAREFULLY CONSIDERED THE ISSUE. AS STATED IN THE LETTER ADDRESSED TO THE A.O., THE RECORDS OF THE ASSESSEE CLEARLY ILLUSTRATES THAT THE APP ELLANT IS A TRANSPORT AGENT, WHO WORKS ON COMMISSION BASIS AND ARRANGES TRANSPORTS FOR OTHERS. THE FREIGHT PAYMENT IS MADE BY THE CONSIGNEE, I.E. THE PERSON TO WHOM GOODS ARE SENT, AND THE ASSESSEE GETS ONLY HIS COMMISSION. IN THE BOOKS OF ACCOUNTS, THE AS SESSEE HAS SHOWN GROSS RECEIPTS AND PAYMENTS MADE BY VARIOUS CONSIGNEES WITH A VIEW TO RECONCILE THE AMOUNT OF TAX DEDUCTED AT SOURCE. BUT, THAT, IN ITSELF, WOULD NOT CHANGE THE NATURE OF BUSINESS OF THE ASSESSEE, WHICH REMAINS OF A COMMISSION AGENT. IT HA S BEEN HELD BY THE APEX COURT IN THE CASE OF CHOWRINGHEE SALES BUREAU (P) LTD. VS. CIT (87 ITR 542) THAT THE ENTRIES IN BOOKS OF ACCOUNTS DO NOT DETERMINE THE CHARACTER AND NATURE OF RECEIPT AND 7 1369 - RJT - 2010 SHRI RAJESH A BORICHA THE CHARACTER OF TRANSACTION MUST IN EVERY CASE DEPEND UPON A LL RELEVANT FACTS AND CIRCUMSTANCES. IF THE SAME IS PROPERLY EXAMINED, IT IS APPARENT FROM THE RECORDS OF THE CASE THAT THE ASSESSEE IS ACTUALLY WORKING AS A TRANSPORT COMMISSION AGENT. IN THE CASE OF TRANSPORT COMMISSION AGENTS IN VARIOUS CASES, IT HAS BE EN HELD BY THE HONBLE ITAT, RAJKOT BENCH THAT LIABILITY TO DEDUCT TAX FROM SUCH FREIGHT, WHICH IS ACTUALLY PAID BY THE CONSIGNEE, WOULD NOT ARISE IN THE HANDS OF THE PERSON, WHO ARRANGES TRANSPORT ON COMMISSION BASIS. IN THE CASE OF ITO, WARD - 2(4), PORBAN DAR VS. SHRI SHARADKUMAR POPATLAL MAJITHIYA, IN ITA NO.569/RJT/2008, THE HONBLE ITAT HAS, VIDE ITS ORDER DATED 26/5/2009, UPHELD THE VIEW OF THE TH E N CIT(APPEALS) THAT, IN SUCH A SITUATION, THERE IS NO LIABILITY OF DEDUCTION OF TAX AT SOURCE AND THE PROVI SIONS OF SECTION 40(A)(IA) WOULD NOT BE APPLICABLE. THE HONBLE ITAT, KOLKATA BENCH HAS, IN THE CASE OF MRS. KAVITA CHUG VS. ITO, REPORTED IN 45 DTR (KOL) (TRIB) PAGE 146, HAS TAKEN A SIMILAR VIEW. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE HON BLE ITAT, RAJKOT BENCH, AS DISCUSSED ABOVE, THE ASSESSEE WAS NOT LIABLE TO DEDUCT ANY TAX, AS HE WAS MERELY A COMMISSION AGENT FOR ARRANGING TRANSPORT. IN SUCH A SITUATION, WHEN THERE WAS NO LIABILITY TO DEDUCT TAX, TH E PROVIS I ONS OF SECTION 40(A)(IA) WOUL D NOT BE APPLICABLE. ACCORDINGLY, THE DISALLOWANCE OF RS.80,41,529/ - IS DELETED. 8. IN SUPPORT OF APPEAL, THE LD . DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ASSESSMENT ORDER AND THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER BEFORE THE LD . CIT(A). 9. IN REPLY, THE LD . AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUPPORTED THE ORDER PASSED BY THE LD . CIT(A). HIS SUBMISSIONS, IN BRIEF, WERE THREE - FOLD. ONE, T HE ASSESSEE WAS NOT A CONTRACTOR BUT A MERE TRANSPORT AGENT AND THEREFORE HE WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE OUT OF THE PAYMENTS MADE BY HIM TO VARIOUS TRUCK OWNERS/DRIVERS FOR TRANSPORTING THE GOODS OF THE CONSIGN O RS TO THE PREMISES OF THE CONSIGNEES. TWO, T HE PAYMENTS MADE BY THE ASSESSEE TO TRUCK OWNERS/DRIVERS WERE IN THE NATURE OF DI RECT COSTS AND THEREFORE ELIGIBLE FOR DEDUCTION U/S 28 OF THE INCOME - TAX ACT AND NOT UNDER SECTIONS 30 - 38 OF THE 8 1369 - RJT - 2010 SHRI RAJESH A BORICHA INCOME - TAX ACT. IN TH IS CONNECTION, HE REFERRED TO THE OPENING WORDS OF S ECTION 40 AND SUBMITTED THAT THE DISALLOWANCE CONTEMPLATED BY SECTION 40 WOULD APPLY IN RESPECT OF THOSE EXPENSES ALONE WHICH F E LL UNDER SECTIONS 30 - 38 AND NOT TO THE EXPENSES FALLING UNDER SECTION 28. THREE, T HE ASSESSEE WAS AN INDIVIDUAL AND THEREFORE THE PROVISIONS REGARDING THE DEDUCTION OF TAX AT SOURCE WOULD NOT APPLY TO HIM. THE LD . AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ALSO RELIED UPON THE WRITTEN SUBMISSIONS FILED BEFORE THE LD . CIT(A) , A COPY OF WHICH HAS BEEN FILED BEFORE THIS TRIBUNAL ALSO. HE HAS FILED COPY OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2010 - 11 IN WHICH THE NATURE OF THE BUSINESS OF THE ASSESSEE HAS BEEN MENTIONED AS COMMISSION BUSINESS IN TRANSPORT. HE HAS ALSO FILED SAMPLE COPIES OF GOODS CONSIGNMENT NOTE S ISSUED BY THE ASSESSEE AND COPY OF AUDITED ACCOUNTS ALONG WITH AUDIT REPORT FOR THE YE AR UNDER APPEAL. IN SUPPORT OF HIS SUBMISSIONS, HE HAS RELIED UPON FOLLOWING AUTHORITIES : I . ITO V. RAMA NAND & CO., 163 ITR 702 (HP) II . MYTHRI TRANSPORT CORP. V. ACIT, TTJ (VISHAKHA) 970 III . DATTA DIGMBER SAHAKARI KAMGAR SANSTHA V. ACIT, 77 TTJ(PUNE) 540 IV . DCIT V. SATISH AGRAWAL & CO., 124 TTJ (ASR) 542 V . R.R. CARRYING CORP. VS. ACIT, 126 TTJ (CKT) 240 VI . CIT V. UNITED RICE LAND LTD., 217 CTR (P&H) 332 VII . PARAS TRANSPORT CO. V. ITO, 92 TTJ (AGRA) 607 VIII . TEJA CONSTRUCTIONS V. ACIT (HYD), 36 DTR (HYD)(TRIB) 220 IX . MRS. KAVITA CHUG V. ITO, 134 TTJ (KOL) 103 10. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CONSIDERED THEIR SUBMISSIONS . IN ITS JUDGMENT DATED 02.05.2013 IN THE ASSESSEES OWN CASE, I.E., CIT V. RAJESH A BORICHA, TAX APPEAL NO.832 OF 2012, THE HONBLE JURISDICTIONAL HI GH COURT HAS OBSERVED THUS: SECTION 40(A)(IA) PROVIDES THAT IN CASE OF ANY INTEREST, COMMISSION OR BROKERAGE, RENT, ROYALTY, FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICES PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB - CON TRACTOR FOR CARRYING OUT ANY WORK ON WHICH TAX IS DEDUCTIBLE AT SOURCE AND SUCH TAX HAS NOT BEEN DEDUCTED OR AFTER DEDUCTION HAS NOT BEEN PAID BEFORE THE DUE DATE, SUCH AMOUNTS SHALL NOT BE DEDUCTED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFIT S AND GAINS OF BUSINESS OR PROFESSION IRRESPECTIVE OF THE PROVISIONS CONTAINED IN SECTIONS 30 TO 38 OF THE ACT. TWO PROPOSITIONS CLEARLY EMERGE FROM THE AFORESAID OBSERVATIONS OF THE HONBLE HIGH COURT: ONE , THE DISALLOWANCE UNDER SECTION 40(A)(IA) IS AT TRACTED IN RESPECT OF AMOUNTS OUT OF 9 1369 - RJT - 2010 SHRI RAJESH A BORICHA WHICH TAX IS DEDUCTIBLE AT SOURCE AND SUCH TAX IS EITHER NOT DEDUCTED OR AFTER DEDUCTION IS NOT PAID BEFORE THE SPECIFIED DATE; AND , TWO, THE DISALLOWANCE U/S 40(A)(IA) C AN BE MADE IRRESPECTIVE OF THE PROVISIONS CONTAIN ED IN SECTIONS 30 - 38 OF THE INCOME - TAX ACT. 11. IT IS THE CASE OF THE ASSESSEE THAT PAYMENTS MADE TO T RUCK OWNERS/DRIVERS ARE IN THE NATURE OF DIRECT COSTS AND THEREFORE THEY ARE DEDUCTIBLE WHILE COMPUTING THE PROFITS U/S 28. ACCORDING TO HIM, PAYMENTS I N RESPECT OF SUCH DIRECT COSTS CANNOT BE CONST RUED AS EXPENDITURE UNDER S ECTIONS 30 - 38 OF THE INCOME - TAX ACT. IT IS CONTENDED THAT DISALLOWANCE CONTEMPLATED BY SECTION 40 IS RESTRICTED TO THOSE EXPENSES ONLY WHICH FALL UNDER SECTIONS 30 - 38 OF THE INCOME - TA X ACT AND NOT TO THOSE EXPENSES WHICH FALL U/S 28 OF THE INCOME - TAX ACT. IN SUPPORT OF HIS SUBMISSIONS, HE HAS FILED EXTRACTS FROM PP. 4520 - 4526 OF SAMPATH IYENGAR'S LAW O F INCOME TAX 11 TH EDITION. 12. SECTION 28 IS THE CHARGING SECTION IN RESPECT OF P ROFITS AND GAINS OF BUSINESS OR PROFESSION. CLAUSE ( I ) OF SECTION 28 PROVIDES THAT THE PROFITS AND GAINS OF ANY BUSINESS OR PROFESSION WHICH WERE CARRIED ON BY THE ASSESSEE AT ANY TIME DURING THE PREVIOUS YEAR WOULD BE CHARGEABLE TO INCOME - TAX ACT UNDER TH E HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION. SECTION 29 OF THE INCOME - TAX ACT PROVIDES THAT THE INCOME REFERRED TO IN SECTION 28 SHALL BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS CONTAINED IN SECTIONS 30 - 43D OF THE INCOME - TAX ACT. SECTION 37 OF T HE INCOME - TAX ACT PROVIDES : ANY EXPENDITURE (NOT BEING EXPENDITURE OF THE NATURE DESCRIBED IN SECTIONS 30 TO 36 AND NOT B EING IN THE NATURE OF CAPITAL EXPENDITURE OR PERSONAL EXPENSES OF THE ASSESSEE), LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAIN S OF BUSINESS OR PROFESSION'. IN THE STATUTORY FRAMEWORK OF SECTION 37, WE ARE UNABLE TO ACCEPT THE SUBMISSION OF THE ASSESSEE THAT THE IMPUGNED EXPENSES IN RESPECT OF WHICH DEDUCTION HAS BEEN CLAIMED DO NOT FALL U/S 37 AND THEREFORE THEY ARE OUTSIDE THE SCOPE OF DISALLOWANCE CONTEMPLATED BY SECTION 40(A)(IA) FOR THE FOLLOWING REASONS: 10 1369 - RJT - 2010 SHRI RAJESH A BORICHA (I) IN INDIAN MOLASSES CO. (P) LTD. V. CIT, 37 ITR 66 (SC), IT HAS BEEN HELD THAT EXPENDITURE IS WHAT IS PAID OUT OR AWAY AND IS SOMETHING WHICH IS GONE IRRETRIEVABLY. TO B E A PAYMENT WHICH IS MADE IRRETRIEVABLY THERE SHOULD BE NO POSSIBILITY OF THE MONEY FORMING, ONCE AGAIN, A PART OF THE FUNDS OF THE ASSESSEE. THE IMPUGNED EXPENDITURE INCURRED BY THE ASSESSEE FULLY ANSWERS THE AFORESAID FEATURES OF EXPENDITURE AND HENCE IS FULLY COVERED BY THE TERM ANY EXPENDITURE USED IN SECTION 37 . (II) T HE USE OF PHRASE ANY EXPENDITURE IN SECTION 37 IS WIDE AND COMPREHENSIVE ENOUGH TO INCLUDE ALL FORMS OF EXPENDITURE IRRESPECTIVE OF WHETHER THEY ARE DIRECT OR INDIRECT EXPENDITURE. THE TERM EXPENDITURE HAS BEEN DEFINED AT PAGE 577 OF BLACK'S LAW DICTIONARY - 6 TH EDITION AS S PENDING OR PAYMENT OF MONEY, THE ACT OF SPENDING, DISBURSING , OR LAYING OUT OF MONEY; PAYMENT. THE TERM EXPENSE IS ALSO DEFINED AT THE SAME PAGE OF THE D ICTIONARY AS T HAT WHICH I S EXPENDED, LAID OUT OR CONSUMED. AN OUTLAY ; CHARGE; COST; PRICE. THE EXPENDITURE OF MONEY, TIME, LABOR, RESOURCES , AND THOUGHT. THAT WHICH IS EXPENDED IN ORDER TO SECURE BENEFIT O R BR ING ABOUT A RESULT. BUSINESS E XPENSE IS ALSO DEFINED AT THE SAME PAGE OF THE SAME D ICTIONARY AS O NE WHICH IS DIRECTLY RELATED TO ONES BUSINESS AS CONTRASTED WITH EXPENSES INCURRED FOR PERSONAL AND FAMILY REASONS. IT IS THUS CLEAR THAT THE TERM ANY EXPENDITURE USED IN S ECTION 37 IS WIDE ENOUGH TO INCLUDE ALL OUTLAYS, CH ARGES, COSTS, PRICES WHICH ARE LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS IRRESPECTIVE OF WHETHER IT IS IN THE NATURE OF DIRECT OR INDIRECT EXPENDITURE /COSTS . THERE ARE NO WORDS IN SECTION 37 FROM WHICH IT CAN BE INFERRED THAT THE PROVISIONS OF SECTION 37 ARE INTENDED TO COVER INDIRECT COSTS/ EXPENDITURE ALONE . THE PHRASE ANY EXPENDITURE IN SECTION 37 CANNOT, BY ANY LINGUISTIC TOOL OF INTERPRETATION, BE INTERPRETED TO MEAN IND IRECT COSTS/ EXPENDITURE ALONE . WORD ANY HAS DIV ERSITY OF MEANING AND IS GENERALLY EMPLOYED IN LEGISLATIONS TO INDICATE ALL OR EVERY. THE USE OF THE WORD ANY IN THE SAID PHRASE SHOWS THAT THE TERM EXPENDITURE IS INTENDED TO BE WIDE AND COMPREHENSIVE ENOUGH TO COVER ALL FORMS OF 11 1369 - RJT - 2010 SHRI RAJESH A BORICHA EXPENDITURE I RRESPE CTIVE OF WHETHER THEY ARE IN THE NATURE OF DIRECT COSTS/EXPENDITURE OR INDIRECT COSTS/ EXPENDITURE OR IN THE FORM OF ANY OTHER OUTLAY . (III) THE AFORESAID VIEW IS ALSO SUPPORTED BY THE JUDGMENT OF THE HONBLE SUPREME COURT IN ATTAR SINGH GURUMUKH SINGH V . ITO, 191 ITR 667 (SC) IN WHICH IT HAS BEEN HELD THAT T HE PAYMENTS MADE FOR PURCHASES WOULD ALSO BE COVERED BY THE WORD 'EXPENDITURE' AND SUCH PAYMENTS CAN BE DISALLOWED IF THEY ARE MADE IN CASH IN THE SUMS EXCEEDING THE AMOUNT SPECIFIED UNDER SECTION 40A (3). ON EXACTLY SAME PRINCIPLES, THE IMPUGNED PAYMENTS MADE BY THE ASSESSEE WOULD CONSTITUTE EXPENDITURE WITHIN THE MEANING OF SECTION 37 FOR THE PURPOSE OF DISALLOWANCE U/S 40(A)(IA). (I V ) SINCE SECTION 37 SPECIALLY DEALS WITH ANY EXPENDITURE, THE G ENERAL PROVISIONS OF SECTION 28 WOULD NOT APPLY TO THOSE EXPENSES WHICH ARE SPECIALLY COVERED BY SECTION 37. IMPUGNED EXPENDITURE IS COVERED BY SECTION 37 AND HENCE ITS DEDUCTIBILITY HAS TO BE SEEN U/S 37 READ WITH SECTION 40 AND NOT UNDER SECTION 28. 1 3 . WE SHALL NOW DEAL WITH THE OTHER SUBMISSION OF THE ASSESSEE THAT THE DISALLOWANCE OF EXPENSES CONTEMPLATED BY SECTION 40(A)(IA) IS LIMITED TO ONLY THOSE EXPENSES WHICH FALL UNDER SECTIONS 30 TO 38 . THERE ARE THREE PRINCIPAL REASONS WHICH PERSUADE US TO HO LD THAT THE SCOPE OF DISALLOWANCE OF EXPENSES CONTEMPLATED BY SECTION 40(I)(IA) IS NOT LIMITED TO THOSE EXPENSES ALONE WHICH FALL U/S 30 - 38 BUT COVERS ALL THOSE EXPENSES WHICH ARE SPECIFI CALLY ENUMERATED IN SECTION 40 . THEY ARE AS UNDER: (I) T HE SUBJECT MATTER OF DISALLOWANCE UNDER SUB - CLAUSE (IA) OF CLAUSE (A) OF SECTION 40 IS , INTER - ALIA, THE AMOUNTS PAYABLE TO A CONTRACTOR OR A SUB - CONTRACTOR FOR CARRYING OUT ANY WORK O UT OF WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII - B AND SUCH TAX HAS EITHER NOT BE EN DEDUCTED OR AFTER DEDUCTION HAS NOT BEEN PAID BEFORE THE SPECIFIED DATE. THEREFORE, THE AMOUNTS PAYABLE TO A CONTRACTOR OR SUB - CONTRACTOR CANNOT BE ALLOWED AS DEDUCTION UNLESS TAX HAS BEEN DEDUCTED OUT OF SUCH AMOUNTS PAYABLE TO A 12 1369 - RJT - 2010 SHRI RAJESH A BORICHA CONTRACTOR OR S UB - CONTRACTOR. T H E LANGUAGE OF SUB - CLAUSE (IA) OF CLAUSE (A) IS UNAMBIGUOUS AND UNEQUIVOCAL IN THAT THE PAYMENTS MADE TO A CONTRACTOR OR A SUB - CONTRACTOR CAN NOT BE ALLOWED AS DEDUCTION UNLESS TAX OUT OF SUCH PAYMENTS IS DEDUCTED AT SOURCE AND, AFTER DEDUCT ION, PAID TO THE GOVERNMENT WITHIN THE SPECIFIED TIME LIMIT. IF SUCH PAYMENTS WERE INTENDED TO BE KEPT OUTSIDE THE SCOPE OF DISALLOWANCE CONTEMPLATED BY SECTION 40, THEN THERE WAS NO REASON FOR SPECIFICALLY SUBJECTING THEM TO DISALLOW ANCE U/S 40(A)(IA). ( I I) AS APPARENT FROM THE OPENING WORDS OF SECTION 40 AND ALSO HELD BY THE HONBLE JURISDICTIONAL HIGH COURT, THE PROVISIONS OF SECTION 40(A)(IA) BAR DEDUCTION OF CERTAIN TYPES OF E X PENSES IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION IRRESPECTIVE OF THE PROVISIONS CONTAINED IN SECTIONS 30 TO 38 OF THE ACT. IN OUR OPINION, THE LEGAL EFFECT OF THE OPENING WORDS OF SECTION 40 IS THAT THE EXPENSES IN RESPECT OF WHICH DISALLOWANCE IS CONTEMPLATED BY SECTION 40 W OULD NOT BE ELIGIBLE FOR DEDUCTION EVEN IF THEY ARE OTHERWISE ELIGIBLE FOR DEDUCTION U/S 30 TO 38. THEY CANNOT THEREFORE BE INTERPRETED AS SUGGESTING THAT ONLY THOSE EXPENSES WHICH ARE ADMISSIBLE FOR DEDUCTION U/S 30 TO 38 ALONE WOULD BE CONSIDERED FOR DIS ALLOWANCE U/S 40. TO SAY THAT THE EXPENSES ENUMERATED IN SECTION 40 SHALL BE DISALLOWED U /S 40 IF THE CONDITIONS SPECIFIED THEREIN ARE SATISFIED IRRESPECTIVE OF THEIR ADMISSIBILITY FOR DEDUCTION U/S 30 TO 38 IS ONE PROPOSITION AND TO SAY THAT ONLY THOSE EX PENSES WHICH FALL U/S 30 TO 38 ALONE WOULD BE CONSIDERED FOR DISALLOWANCE U/S 40 IS A QUITE DIFFERENT PROPOSITION. BOTH OF THEM DO NOT MEAN ONE AND THE SAME THING. OPENING WORDS OF SECTION 40 DO NOT RESTRICT OR LIMIT THE SCOPE OF EXPENSES CONTEMPLATED FOR DISALLOWANCE BY IT BUT RATHER ENLARGES THE SAME IN THE SENSE THAT THE DISALLOWANCE OF SUCH EXPENSES AS CONTEMPLATED BY SECTION 40 WOULD BE MADE IRRESPECTIVE OF THE IR ELIGIBILITY FOR DEDUCTION UNDER SECTIONS 30 TO 38. THEY SIMPLY OVER - RIDE THE PROVISIONS OF SECTIONS 30 TO 38 AND NOT THAT THEY RESTRICT THE SCOPE OF EXPENSES SPECIFICALLY ENUMERATED FOR 13 1369 - RJT - 2010 SHRI RAJESH A BORICHA DISALLOWANCE U/S 40 TO THOSE EXPENSES ALONE WHICH FALL UNDER SECTIONS 30 TO 38. ( I I I ) WITHOUT PREJUDICE TO THE AFORESAID, THE OPENING WORDS OF SECTION 40 CAN NOT BE INTERPRETED SO AS TO LIMIT THE AMBIT AND SCOPE OF SPECIAL PROVISIONS CONTAINED IN CLAUSE (A)(IA) OF SECTION 40 OF THE INCOME - TAX ACT. IT IS EQUIVALENT TO SAYING THAT IN SPITE OF THE PROVISIONS IN THE NON - OBSTANTE CLAUSE CONTAINED IN SECTION 40, THE SPECIAL PROVISIONS CONTAINED IN CLAUSE (A)(IA) OF SECTION 40 WILL STILL HAVE ITS FULL OPERATION OR THAT THE PROVISION INDICATED IN THE NON - OBSTANTE CLAUSE WILL NOT BE AN IMPEDIMENT FOR THE OPERATION OF THE AFORESAID CLAUSE. THE AFORESAID VIEW IS WELL - SUPPO RTED BY THE PRINCIPLES EMERGING FROM SEVERAL JUDGMENTS OF THE HONBLE SUPREME COURT SOME OF WHICH ARE PARAYANKANDIYAL ERAVATH KALLIANI AMMA V. K DEVI, AIR 1996 SC 1963, 1975, R S RAGHUNATH V. STATE OF KARNATAKA, (1992) 1 SCC 335, 346 - 47; CHANDAVARKAR SITA RATNARAO V. ASHALATA S GAURAM, AIR 1987 SC 117, 134. 1 4 . IN VIEW OF THE AFORESAID, WE ARE UNABLE TO ACCEPT THE SUBMISSION OF THE ASSESSEE THAT THE IMPUGNED PAYMENTS ARE NOT IN THE NATURE OF EXPENDITURE WITHIN THE MEANING OF SECTION 37 OR THAT THE SCOPE OF DISALLOWANCE CONTEMPLATED BY SECTION 40(A)(IA) IS RESTRICTED TO THOSE EXPENSES WHICH FALL U/S 30 TO 38 . IN OUR VIEW, THE SCOPE OF DISALLOWANCE CONTEMPLATED BY SECTION 40 COVERS ALL THOSE EXPENSES WHICH ARE SPECIFI CALLY ENUMERATED THEREIN. THE IMPUGNED E XPENSES CLAIMED BY THE ASSESSEE AS DEDUCTION ARE SPECIFIED IN SECTION 40(A)(IA) AND THEREFORE THEY ARE WELL WITHIN THE SCOPE OF DISALLOWANCE CONTEMPLATED BY SECTION 40(A)(IA) IRRESPECTIVE OF THEIR ELIGIBILITY FOR DEDUCTION UNDER SECTIONS 30 TO 38. 1 5 . I T IS ONE OF THE SUBMISSIONS ON BEHALF OF THE ASSESSEE , WHICH HAS ALSO BEEN ACCEPTED BY THE LD. CIT(A), THAT THE ASSESSEE IS A MERE TRANSPORT COMMISSION AGENT AND THEREFORE THE PROVISIONS OF SECTION 40(A)(IA) /194C ARE NOT APPLICABLE TO HIM. THERE IS NOTHING IN SECTION 40(A)(IA) /194C TO SUGGEST THAT IT IS NOT APPLICABLE TO AN ASSESSEE WHO IS A TRANSPORT AGENT OR COMMISSION AGENT . WE SHALL DEAL WITH TH IS ASPECT A LITTLE LATER. FOR THE PRESENT, WE SHALL EXAMINE THE ISSUE AS TO WHETHER 14 1369 - RJT - 2010 SHRI RAJESH A BORICHA THE ASSESSEE, AS CONTENDED BY HIM, IS A COMMISSION AGENT. T HE ASSESSEE HAS NEITHER PROVED THAT HE IS AN AGENT OF THE CONSIGNORS NOR HAS HE SHOWN ANY INCOME FROM COMMISSION AGENCY BUSINESS. IN THIS CONNECTION, WE MAY FRUITFULLY REFER TO THE OBSERVATIONS MADE BY LORD HERSCHELL IN KEN NEDY V. DC TRAFFORD 1897 A.C. 180 THAT 'NO WORD IS MORE COMMONLY AND CONSTANTLY ABUSED THAN 'AGENT' '. THE USE OF THE WORD 'AGENT' IN ITSELF REALLY MEANS VERY LITTLE. COBBLER MENDING SHOES OF A MAN, SERVANT RENDERING SERVICES TO HIS MASTER, A SHOPKEEPER SE LLING THE GOODS MANUFACTURED BY OTHERS TO HIS CUSTOMERS , DRIVER DRIVING THE CAR OF HIS MASTER AND CONTRACTOR EXECUTING THE JOB AWARDED TO HIM BY THE CONTRACTEE ARE NOT AGENTS. A PERSON WHO CLAIMS TO BE AGENT MUST ESTABLISH THAT HE IS CLOTHED WITH NECESSARY AUTHORITY BY ANOTHER (PRINCIPAL) TO BIND HIM AND MAKE HIM (PRINCIPAL) ANSWERABLE TO THE THIRD PERSONS AND THUS ESTABLISHING A PRIVITY OF CONTRACT BETWEEN THAT THIRD PERSON AND THE PRINCIPAL. A COMMISSION AGENT IS ONE WHO TRANSACTS BUSINESS FOR AND ON BEHA LF OF HIS PRINCIPAL FOR WHICH HE IS PAID COMMISSION. IN THE MATTER BEFORE US, T HE ASSESSEE HAS PLACED NO EVIDENCE ON RECORD TO ESTABLISH THAT HE HAD THE REQUISITE AUTHORITY TO BIND THE CONSIGNORS OF HIS DEALINGS WITH THIRD PARTIES OR THAT THE CONSIGNORS WE RE LIABLE TO THIRD PARTIES FOR THE ACTIONS OF THE ASSESSEE. THERE IS NOTHING ON RECORD TO SHOW THAT THE ASSESSEE WAS ACTING AS AGENT FOR AND ON BEHALF OF THE CONSIGNORS IN HIS DEALINGS WITH THE TRUCK OWNERS/DRIVERS ENGAGED BY HIM. THE ASSESSEE HAS ENTERED INTO CONTRACTS IN HIS OWN RIGHT FIRSTLY WITH THE CONSIGNORS TO TRANSPORT THEIR GOODS AND THEREAFTER SUB - CONTRACTED THE SAID WORK IN HIS OWN RIGHT TO THE TRUCK OWNERS/DRIVERS . BESIDES, T HERE IS NO PRIVITY OF CONTRACT BETWEEN THE CONSIGNORS AND THE TRUCK OWN ERS/DRIVERS. SECONDLY , H E HAS SHOWN THE AMOUNTS RECEIVED FROM CONSIGNORS AS HIS OWN CONTRACT RECEIPTS FROM TRANSPORT BUSINESS AND ALSO CLAIMED DEDUCTION IN RESPECT OF AMOUNTS PAID TO TRUCK OWNERS/DRIVERS AS HIS OWN EXPENDITURE. THIS FACT ALSO GOES AGAINST THE SUBMISSION OF THE ASSESSEE THAT HE IS A MERE COMMISSION AGENT. THIRDLY, THE ASSESSEE HIMSELF HAS NOT DISCLOSED ANY COMMISSION INCOME FROM COMMISSION AGENCY BUSINESS. HE HAS DECLARED NET PROFIT FROM HIS BUSINESS AS TRANSPORT CONTRACTOR , WHICH CONFIRMS T HE VIEW THAT THE ASSESSEE WAS RUNNING HIS OWN BUSINESS AS TRANSPORT CONTRACTOR IN HIS OWN RIGHT AND NOT AS AGENT . FOURTHLY , THE NATURE OF 1 5 1369 - RJT - 2010 SHRI RAJESH A BORICHA BUSINESS OF THE ASSESSEE HAS BEEN SHOWN BY THE TAX AUDITOR IN THE TAX AUDIT REPORT AS THAT OF A TRANSPORT CONTRACTOR A ND NOT AS COMMISSION AGENT . F IFTHLY , THE ASSESSMENT ORDER ALSO DESCRIBES THE NATURE OF BUSINESS OF THE ASSESSEE AS THAT OF A TRANSPORT CONTRACTOR. SIXTHLY, THE SERVICES OF THE ASSESSEE WERE UTILIZED BY CONSIGNORS FOR WHICH AMOUNTS AGGREGATING TO RS.84,13,3 57/ - WERE PAID BY THEM TO THE ASSESSEE OUT OF WHICH TAX AMOUNTING TO RS.95,813/ - WAS DEDUCTED BY THEM AT SOURCE. THE AFORESAID PARTIES ALSO THUS TREATED THE ASSESSEE AS A TRANSPORT CONTRACTOR AND NOT AS THEIR AGENT AS THEY, IN THAT CASE, WOULD HAVE PAID ON LY COMMISSION TO THE ASSESSEE. S EVENTHLY , SAMPLE COPIES OF GOOD S CONSIGNMENT NOTES FILED BY THE ASSESSEE BEFORE THIS TRIBUNAL SHOWS THAT THE ASSESSEE HAS NOT SIGNED ANY OF THE AFORESAID GOODS CONSIGNMENT NOTES AS AGENT OF THE CONSIGNORS. ALL OF THEM HAVE B EEN SIGNED BY THE ASSESSEE IN HIS OWN RIGHT. IN THE FACE OF SUCH MATERIALS AVAILABLE ON RECORD, WE ARE UNABLE TO HOLD THAT THE ASSESSEE WAS A TRANSPORT COMMISSION AGENT. IN OUR CONSIDERED VIEW, HE WAS ENGAGED IN THE BUSINESS AS TRANSPORT CONTRACT OR AND NOT AS COMMISSION AGENT AS HELD BY THE LD. CIT(A) . 1 6 . THE FACT AS TO WHETHER THE ASSESSEE IS A COMMISSION AGENT OR NOT IS COMPLETELY IRRELEVANT IN DECIDING THE ISSUE OF DISALLOWANCE OF EXPENDITURE U/S 40(A). A PPLICABILITY OF SECTION 40(A)(IA) DOES NOT DEPE ND UPON AS TO WHETHER THE ASSESSEE IS A TRANSPORT COMMISSION AGENT OR NOT. IT HAS NOTHING TO DO WITH THE NATURE OF BUSINESS OF THE ASSESSEE. I T IS THE EXPENDITURE PER SE , AND NOT THE NATURE OF BUSINESS IN WHICH EXPENDITURE IS INCURRED , WHICH IS THE SUBJECT MATTER OF DISALLOWANCE U/S 40(A)(IA) AND THEREFORE ITS APPLICABILITY CANNOT BE DEFEATED ON THE GROUND THAT THE ASSESSEE IS A TRANSPORT COMMISSION AGENT. EVEN IF A TRANSPORT COMMISSION AGENT CLAIMS DEDUCTION OF EXPENSES ENUMERATED IN SECTION 40(A)(IA) , THE IR ADMISSIBILITY WOULD NEED TO BE EXAMINED WITH REFERENCE TO THE PROVISIONS OF SECTION 40(A) (IA) . ITS PLAIN AND SIMPLE ON PERUSAL OF AUDITED ACCOUNTS OF THE ASSESSEE THAT T HE ASSESSEE HAS CLAIMED THE IMPUGNED EXPENDITURE AS DEDUCTION IN COMPUTING HIS PROF ITS . THE SAID EXPENDITURE REPRESENTS AMOUNTS PAID TO THE TRUCK OWNERS/DRIVERS FOR CARRIAGE OF GOODS. 16 1369 - RJT - 2010 SHRI RAJESH A BORICHA 1 7 . IN TH E STATUTORY FRAMEWORK OF SECTION 40(A)(IA) , THE RELEVANT ISSUE THAT DESERVES TO BE CONSIDERED IS WHETHER THE ASSESSEE WAS REQUIRED TO DEDUCT T AX AT SOURCE OUT OF IMPUGNED PAYMENTS MADE BY HIM TO TRUCK OWNERS/DRIVERS FOR CARRIAGE OF GOODS U/S 194C . IF HE WAS REQUIRED TO DEDUCT TAX AT SOURCE OUT OF SUCH PAYMENTS MADE TO THE TRUCK OWNERS/DRIVERS AND HAS FAILED TO DEDUCT SUCH TAX AT SOURCE OR, AFTER DEDUCTION, HAS FAILED TO PAY THE SAME WITHIN THE SPECIFIED PERIOD, THE DISALLOWANCE CONTEMPLATED BY SECTION 40(A)(IA) WOULD BE ATTRACTED IN TERMS OF THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE ASSESSEES OWN CASE. WE ARE CONCERNED WITH AY 2007 - 08. FIRST T WO SUB - SECTIONS OF SECTION 194C AS THEY EXISTED AT THE RELEVANT POINT OF TIME ARE RELEVANT FOR DECIDING THE ISSUE UNDER APPEAL. THEY READ AS UNDER: PAYMENTS TO CONTRACTORS AND SUB - CONTRACTORS. 194C. (1) ANY PERSON RESPONSIBLE FOR PAYING A NY SUM TO ANY RESIDENT (HEREINAFTER IN THIS SECTION REFERRED TO AS THE CONTRACTOR) FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK) IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND ( A ) THE CENTRAL GOVERNMENT OR ANY STATE GOVERNMENT; OR ( B ) ANY LOCAL AUTHORITY; OR ( C ) ANY CORPORATION ESTABLISHED BY OR UNDER A CENTRAL, STATE OR PROVINCIAL ACT; OR ( D ) ANY COMPANY; OR ( E ) ANY CO - OPERATIVE SOCIETY; OR ( F ) ANY AUTHORITY, CONSTITUTED IN INDIA BY OR UNDER ANY LAW, ENGAGED EITHER FOR THE PURPOSE OF DEALING WITH AND SATISFYING THE NEED FOR HOUSING ACCOMMODATION OR FOR THE PURPOSE OF PLANNING, DEVELOPMENT OR IMPROVEMENT OF CITIES, TOWNS AND VILLAGES, OR FOR BOTH; OR ( G ) ANY SOCIETY REG ISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 (21 OF 1860) OR UNDER ANY LAW CORRESPONDING TO THAT ACT IN FORCE IN ANY PART OF INDIA; OR ( H ) ANY TRUST; OR ( I ) ANY UNIVERSITY ESTABLISHED OR INCORPORATED BY OR UNDER A CENTRAL, STATE OR PROVI NCIAL ACT AND AN INSTITUTION DECLARED TO BE A UNIVERSITY UNDER SECTION 3 OF THE UNIVERSITY GRANTS COMMISSION ACT, 1956 (3 OF 1956) ; OR ( J ) ANY FIRM; OR ( K ) ANY INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNO VER FROM THE BUSINESS OR PROFESSION CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE ( A ) OR CLAUSE ( B ) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANCIAL YEAR IN WHICH SUCH SUM IS CREDITED OR PAID TO THE ACCOUNT OF THE CONTRACTOR, SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO 17 1369 - RJT - 2010 SHRI RAJESH A BORICHA ( I ) ONE PER CENT, IN CASE OF ADVERTISING, ( II ) IN ANY OTHE R CASE TWO PER CENT, OF SUCH SUM AS INCOME - TAX ON INCOME COMPRISED THEREIN: PROVIDED THAT NO INDIVIDUAL OR A HINDU UNDIVIDED FAMILY SHALL BE LIABLE TO DEDUCT INCOME - TAX ON THE SUM CREDITED OR PAID TO THE ACCOUNT OF THE CONTRACTOR WHERE SUCH SUM IS CREDIT ED OR PAID EXCLUSIVELY FOR PERSONAL PURPOSES OF SUCH INDIVIDUAL OR ANY MEMBER OF HINDU UNDIVIDED FAMILY. (2) ANY PERSON (BEING A CONTRACTOR AND NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY) RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE SUB - CONTRACTOR) IN PURSUANCE OF A CONTRACT WITH THE SUB - CONTRACTOR FOR CARRYING OUT, OR FOR THE SUPPLY OF LABOUR FOR CARRYING OUT, THE WHOLE OR ANY PART OF THE WORK UNDERTAKEN BY THE CONTRACTOR OR FOR SUPPLYING WHETHER WH OLLY OR PARTLY ANY LABOUR WHICH THE CONTRACTOR HAS UNDERTAKEN TO SUPPLY SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE SUB - CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO ONE PER CENT OF SUCH SUM AS INCOME - TAX ON INCOME COMPRISED THEREIN: PROVIDED THAT AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSION CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE ( A ) OR CLAUSE ( B ) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANCIAL YEAR IN WHICH SUCH SUM IS CREDITED OR PAID TO THE ACCOUNT OF THE SUB - CONTRACTOR, SHALL BE LIABLE TO DEDUCT INCOME - TAX UNDER THIS SUB - SECTION. EXPLANATION I. XXXXX X EXPLANATION II . XXXXXX EXPLANATION III. FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION WORK SHALL ALSO INCLUDE ( A ) ADVERTISING; ( B ) BROADCASTING AND TELECASTING INCLUDING PRODUCTION OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING; ( C ) CARRIAGE OF GOODS AND PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN BY RAILWAYS; ( D ) CATERING. 1 8 . SUB - SECTION (1) OF SECTION 194C REQUIRES A PERSON RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT (REFERRED TO AS THE CONTRACTOR IN SECTION 194C) FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK) IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND SPECIFIED PERSON TO DEDUCT TAX AT SOURCE @ 2% (1% IN CASE OF ADVERTISING) WHILE S UB - SECTION (2) OF SECTION 194C LAYS DOWN THAT WHEN A CONTRACTOR MAKES PAYMENT OF ANY SUM TO A RESIDENT SUB - CONTRACTOR IN PURSUANCE OF A CONTRACT MADE WITH HIM FOR CARRYING OUT THE WHOLE OR ANY PART OF THE WORK UNDERTAKEN BY THE CONTRACTOR, OR, FOR SUPPLYING ANY LABOUR, THE CONTRAC TOR 18 1369 - RJT - 2010 SHRI RAJESH A BORICHA SHALL DEDUCT AN AMOUNT EQUAL TO 1% OF SUCH SUM AS INCOME - TAX ON THE INCOME COMPRISED. 1 9 . A PERSON OR COMPANY THAT UNDERTAKES A CONTRACT TO PERFORM A SERVICE OR DO A JOB IS CALLED A CONTRACTOR. SUCH UNDERTAKING MAY BE EXPRESS OR IMPLIED. ACCORDING T O SECTION 2 OF THE INDIAN CONTRACT ACT, E VERY PROMISE AND EVERY SET OF PROMISES, FORMING THE CONSIDERATION FOR EACH OTHER, IS AN AGREEMENT WHILE CONTRACT AS DEFINED IN THE SAME SECTION MEANS AN AGREEMENT ENFORCEABLE BY LAW. SECTION 9 OF THE INDIAN CONTRA CT ACT PROVIDES THAT CONTRACTS CAN EITHER BE EXPRESS OR IMPLIED. AN EXPRESS CONTRACT IS ONE WHERE THE PROPOSAL OR ACCEPTANCE OF ANY PROMISE IS MADE IN WORDS WHILE IMPLIED CONTRACT IS ONE WHERE SUCH PROPOSAL OR ACCEPTANCE IS MADE OTHERWISE THAN IN WORDS. EV EN IF THERE IS NO EXPRESS CONTRACT, A CONTRACT MAY STILL EXIST BY IMPLICATION, I.E., A CONTRACT CONSISTING OF OBLIGATIONS ARISING FROM THE MUTUAL AGREEMENT AND INTENT TO PROMISE, WHICH HAVE NOT BEEN EXPRESSED IN WORDS. AN IMPLIED CONTRACT ENVISAGED BY SECT ION 9 OF THE INDIAN CONTRACT ACT CAN BE INFERRED FROM THE FACTS AND CIRCUMSTANCES THAT INDICATE A MUTUAL INTENTION TO CONTRACT. CIRCUMSTANCES MAY EXIST WHICH, ACCORDING TO THE ORDINARY COURSE AND COMMON UNDERSTANDING, DEMONSTRATE SUCH AN INTENT THAT IS SUF FICIENT TO SUPPORT THE FINDING OF AN IMPLIED CONTRACT. CHAPTER V OF THE INDIAN CONTRACT ACT TREATS CERTAIN RELATIONS RESEMBLING THOSE CREATED BY A CONTRACT A S CONTRACTS ENFORCEABLE IN LAW. THE INDIAN CONTRACT ACT THUS ENVISAGES FOUR TYPES OF CONTRACTS , NAM ELY, (1) CONTRACTS MADE IN WRITING, (2) CONTRACTS MADE ORALLY, (3) CONTRACTS BY IMPLICATION OR IMPLIED CONTRACTS AND (4) QUASI CONTRACTS. THUS THE CONTRACT S ENVISAG ED BY SECTION 194C ARE NOT LIMITED TO WRITTEN CONTRACTS ALONE; THEY INCLUDE ORAL CONTRACTS A ND IMPLIED CONTRACTS ALSO. ALL PAYMENTS MADE IN PURSUANCE OF A CONTRACT IRRESPECTIVE OF WHETHER IT IS A WRITTEN CONTRACT, ORAL CONTRACT, IMPLIED CONTRACT AND QUASI CONTRACT ARE WELL COVERED BY SECTION194C OF THE INCOME - TAX ACT. THE CASE OF THE ASSESSEE FAL LS WITHIN THE AFORESAID PARAMETERS. 20 . DEFINITION OF WORK AS GIVEN IN SECTION 194C INCLUDES CARRIAGE OF GOODS AND PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN BY RAILWAYS : EXPLANATION III(C) . 19 1369 - RJT - 2010 SHRI RAJESH A BORICHA PERUSAL OF MATERIALS AVAILABLE ON RECORD, AND MORE PARTICU LARLY THE COPIES OF GOODS CONSIGNMENT NOTES SUBMITTED BY THE ASSESSEE, SHOWS THAT THE CONSIGNORS HAD ENTRUSTED THE WORK OF CARRIAGE OF THEIR GOODS TO THE ASSESSEE, WHICH THE ASSESSEE, IN TURN, HAD SUB - CONTRACTED TO TRUCK OWNERS/DRIVERS. IT IS THUS A CLEAR CASE WHERE THE WORK OF CARRIAGE OF GOODS OF THE CONSIGNORS WAS UNDERTAKEN BY THE ASSESSEE AS A CONTRACTOR , WHICH WAS SUBSEQUENTLY SUB - CONTRACTED BY HIM TO THE SUB - CONTRACTORS BEING TRUCK OWNERS/DRIVERS. THE ASSESSEE WAS A CONTRACTOR IN HIS CONTRACTUAL RELA TIONSHIP WITH THE CONSIGNORS IN AS MUCH AS HE HAD UNDERTAKEN TO TRANSPORT THEIR GOODS. THE SAID CONTRACT ED JOB WAS SUBSEQUENTLY SUB - CONTRACTED BY THE ASSESSEE PURSUANT TO WHICH SUB - CONTRACTORS BEING TRUCK OWNERS/DRIVERS CARRIED OUT THE JOB SUB - CONTRACTED B Y THE ASSESSEE TO THEM. 21 . PROVISIONS OF SUB - SECTION (2) OF SECTION 194C ALSO APPLY TO AN INDIVIDUAL WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSION CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE ( A ) OR CLAUSE ( B ) OF SECTION 44AB DURING THE RELEVANT FINANCIAL Y EAR. T OTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSION CARRIED ON BY THE ASSESSEE IN THE YEAR UNDER APPEAL EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE ( A ) OR CLAUSE ( B ) OF SECTION 44AB . IT IS FOR THIS REASON THAT THE ASSESSEE HAS FILED TAX AUDIT REPORT AS REQUIRED BY SECTION 44AB. IN TH IS VIEW OF THE MATTER, THE PROVISIONS OF SECTION 194C(2) APPLY WITH EQUAL FORCE TO HIM. 2 2 . ON CAREFUL CONSIDERATION OF ALL THE MATERIALS AVAILABLE ON RECORD, WE ARE OF THE OPINION THAT THE CASE OF THE ASSESSEE IS FULLY COVERED BY THE PROVISIONS OF SECTI ON 194C(2). THE GOODS RECEIVED BY THE ASSESSEE FROM CONSIGNORS FOR THEIR CARRIAGE WERE SENT THROUGH TRUCK OWNERS HIRED BY THE ASSESSEE . T HERE WAS NO PRIVITY OF DIRECT CONTRACT BETWEEN THE TRUCK OWNERS HIRED BY THE ASSESSEE AND THE CONSIGNORS. I T WAS THE AS SESSEES RESPONSIBILITY TO TRANSPORT THE GOODS RECEIVED FROM THEM FOR WHICH PURPOSE THE ASSESSEE HIRED THE SERVICES OF THE TRUCK OWNERS, OBVIOUSLY AS SUB - CONTRACTORS. THE ASSESSEE WAS REQUIRED TO DEDUCT TAX AT SOURCE OUT OF PAYMENTS MADE BY HIM TO SUCH TRU CK OWNERS/DRIVERS IN TERMS OF SECTION 194C(2) BUT HE DID NOT DO SO AND HENCE THE PROVISIONS OF SECTION 40(A)(IA) WERE RIGHTLY INVOKED BY THE AO FOR MAKING THE IMPUGNED DISALLOWANCE. IN IDENTICAL FACT 20 1369 - RJT - 2010 SHRI RAJESH A BORICHA SITUATION, THE HONBLE RAJASTHAN HIGH COURT HAS TAKEN SI MILAR VIEW IN SHREE CHOUDHARY TRANSPORT COMPANY V. ITO, 225 CTR (RAJ.) 125. IN THAT CASE ALSO, THE ASSESSEE HAD UNDERTAKEN TO TRANSPORT THE GOODS OF THE CEMENT FACTORY AND FOR THAT PURPOSE HAD HIRED THE SERVICES OF TRUCK OWNERS/DRIVERS TO WHOM PAYMENTS WER E MADE WITHOUT DEDUCTION OF TAX AT SOURCE IN TERMS OF SECTION 194C(2) . CONFIRMING THE ORDER OF THIS TRIBUNAL IN SUSTAINING THE DISALLOWANCE U/S 40(A)(IA) IN IDENTICAL FACT - SITUATION , THE HONBLE HIGH COURT HAS HELD AS UNDER: 2. IN OUR VIEW, ON THE LANGU AGE OF SECTION 194C(2), AND THE FACT THAT THE GOODS RECEIVED WERE SENT THROUGH TRUCK OWNERS BY THE APPELLANT, AND THERE WAS NO PRIVITY OF DIRECT CONTRACT BETWEEN THE TRUCK OWNERS AND THE CEMENT FACTORY. ACCORDING TO THE CONTRACTS BETWEEN THE APPELLANT AND THE CEMENT FACTORY, IT WAS THE APPELLANTS RESPONSIBILITY TO TRANSPORT THE CEMENT, AND FOR THAT THE APPELLANT HIRED THE SERVICES OF THE TRUCK OWNERS, OBVIOUSLY AS SUB - CONTRACTORS. IN THAT VIEW OF THE MATTER, WE DO NOT FIND ANY ERROR IN THE IMPUGNED ORDER O F THE TRIBUNAL. 2 3 . IN VIEW OF THE FOREGOING, THE ORDER PASSED BY THE LD . CIT(A) IS NOT SUSTAIN ABLE IN LAW. IT IS THEREFORE VACATED. RESULTANTLY, T HE ORDER OF THE ASSESSING OFFICER IN THIS BEHALF IS RESTORED. A PPEAL FILED BY THE REVENUE IS ALLOWED. OR DER PRONOUNCED ON 13 . 0 9 . 201 3 SD/ - SD/ - (T. K. SHARMA) (D. K. SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT: 13 . 0 9 .2013 B T COPY OF ORDER FORWARDED TO: - 1 . APPELLANT ITO, WARD - 1(3), RAJKOT 2 . RESPONDENT - SHRI RAJES H A BORICHA, MANDEEP CHAMBERS, KUVADAVA ROAD, RAJKOT 3 . CONCERNED CIT - I I, RAJKOT 4 . CIT (A) - I , RAJKOT 5 . DR, ITAT, RAJKOT 6 . GUARD FILE. 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