M/s. J.M.C. Garments, Kolkata V. ITO, Ward - 30(2), Kolkata, Kolkata

ITA 140/KOL/2011

• Counselvise Citation: 14023514 RSA 2011
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 21-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Assessee Lawyers: SOUMITRA CHOW DHURY; T K CHAKRABORTY

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [ . . . . , ,, , . . ! ! ! ! . , '# '# '# '# ] [BEFORE SHRI N. VIJAYA KUMARAN, J. M. & SHRI C. D. RAO, A.M.] $ $ $ $ / I.T.A NO.140/KOL/2011 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEAR : 2006-07 M/S. J. M. C. GARMENTS -VS.- INCOME TAX OFFICER/WARD-30(2) KOLKATA. [PAN : AADFJ 5159 J] KOLKATA. [ *+ *+ *+ *+ /APPELLANT ] ]] ] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ] ]] ] *+ *+ *+ *+ / FOR THE APPELLANT : S/SHRI SOUMITRA CHOWDH URY & T.K. CHAKRABORTY -.*+ -.*+ -.*+ -.*+ / FOR THE RESPONDENT : SHRI S. K. ROY / 0 !# / 0 !# / 0 !# / 0 !# /DATE OF HEARING : 15. 11. 2011 1' 0 !# 1' 0 !# 1' 0 !# 1' 0 !# /DATE OF PRONOUNCEMENT : 18.11.2011 [ '2 /ORDER . . . . , PER N. VIJAYA KUMARAN, J. M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-XIV, KOLKATA DATED 16.08.2010 FOR ASSESSMENT YEAR 2006-07. THIS IS AG AINST THE ADDITION UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT UNDER THREE HEADS. 2. DURING THE COURSE OF HEARING, LD. COUNSEL FOR TH E ASSESSEE NOT PRESSED THE ADDITION MADE UNDER SECURITY CHARGES TO THE EXTENT OF RS.59,606 /-. HENCE, WE DISMISSED THAT ISSUE AS IT WAS NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE US. 3. COMING TO THE ADDITION UNDER THE HEAD CAR HIRE CHARGES, THE ASSESSEE CLAIMED CAR HIRE CHARGES OF RS.1.68,000/-. OUT OF WHICH RS.1,50,000/ - WAS PAID TO SMT. SULOGNA CHAKRABORTY, WIFE OF ONE OF THE PARTNERS SHRI JAYDEEP CHAKRABORTY. TH E ASSESSEES CONTENTION WOULD BE THAT TDS WAS NOT REQUIRED TO BE DEDUCTED ON CAR HIRE CHARGES AS IT WAS NOT COVERED BY THE PROVISIONS OF SECTION 194C. ON APPEAL TO THE LD. CIT(A) ALSO, LD. CIT(A) WAS OF THE VIEW THAT IT IS THE WORK COVERED UNDER THE PROVISIONS OF SECTION 194C, EXPLANATION I II. TO AVAIL THE BENEFIT, ASSESSEE HAS TO TAKE THE [ ITA NO. 140/KOL/2011] 2 DECLARATION FROM THE CONTRACTOR/SUB-CONTRACTOR AND IN THE ABSENCE OF ANY DECLARATION FROM THE PAYEE PARTY, IT IS NOT ALLOWABLE. HENCE, DISALLOWAN CE CONFIRMED BY THE LD. CIT(A). 4. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT AS PER AMENDMENT OF SECTION 194(I), AMENDED WITH EFFECT FROM 13.07.2006, IT HAS NO RETR OSPECTIVE EFFECT. THE ASSESSMENT YEAR BEFORE US IS 2006-07. THE PAYMENTS WERE MADE FOR CAR HIRE CHA RGES BEFORE THE AMENDMENT CAME FOR THIS ASSESSMENT YEAR 2006-07, THE PREVIOUS YEAR ENDED WI TH 31.03.2006. HENCE, WE HAVE NO HESITATION IN ACCEPTING THE CONTENTION OF THE ASSESSEE. UNDER THE ABOVE FACTS, ASSESSEE HAS NO OBLIGATION TO DEDUCT TAX. HENCE, WE HAVE NO HESITATION IN SETTING ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION MADE UNDER THE HEAD DISALLOWANCE OF CAR HI RE CHARGES. 5. COMING TO THE 3 RD ISSUE AND THE SAME ADDITION UNDER SECTION 40(A)(IA ) OF THE ACT UNDER THE HEAD DYEING CHARGES TO THE TUNE OF RS.11,21,263/-. THE ADDITION CAME ON THE GROUND THAT M/S. MOTHER PROCESSING HAS DONE THE WORK AS CONTRACTOR W ORK OF DYEING CLOTH FOR THE ASSESSEE FOR WHICH ASSESSEE HAS PAID THEM DYEING CHARGES. THE LD. CIT( A) AND THE ASSESSING OFFICER WAS OF THE VIEW THAT ASSESSEE SHOULD HAVE DEDUCTED TDS ON THE WHOLE AMOUNT AND FOR THE FAILURE TO DO SO RESULTED IN DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT. 6. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT FIRST OF ALL THE AUTHORITIES WILL BENT ON PRESUMPTION THAT THERE IS AN AGREEMENT. THERE IS NO CONTRACT WITH M/S. MOTHER PROCESSING FOR THE PURPOSE OF DYEING OF CLOTH FOR THE ASSESSEE. LD. CO UNSEL FOR THE ASSESSEE TOOK US TO THE ASSESSEES PAPER BOOK AT PAGE NO.18 AND CONTENDED THAT THERE I S DIFFERENT RATES IN DIFFERENT COLOURS CHARGED BY M/S. MOTHER PROCESSING TO THE ASSESSEE AND THAT BEI NG THE CASE, THERE IS NO UNIVERSAL CHARGING OF THE RATE BY M/S. MOTHER PROCESSING. IN OTHER WORDS, ALL THE BILLS CLEARLY SHOW THAT RATES WERE DIFFERENT AND IT IS NOT BASED ON CONTRACT AND IT HAD NOT BEEN DONE UNDER A CONTRACT. THE RATE WOULD HAVE BEEN SPECIFIED AND IDENTICAL WHICH IS NOT PRESENT IN PRO CESSING AND DYEING OF COLOURS. THAT WILL GO TO SHOW THAT IT WILL NOT BE UNDER THE CONTRACT AND FOR THAT PROPOSITION LD. CIT(A) RELIED ON THE DECISION OF ITAT, KOLKATA BENCH IN THE CASE OF SAMANWAYA VS. ACIT [2009] 34 SOT 332 (KOL) AND THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. UNITED RICE LAND LTD. [2008] 174 TAXMAN 286 (P&H). 7. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE RELIED ON THE ORDERS OF THE AUTHORITIES [ ITA NO. 140/KOL/2011] 3 BELOW. 8. RESPECTFULLY FOLLOWING THE DECISIONS RELIED BY THE LD. COUNSEL FOR THE ASSESSEE, WE ARE OF THE VIEW THAT ASSESSEE IS NOT UNDER THE OBLIGATION TO DEDUCT TAX. UNDER THE ABOVE FACTS AND CIRCUMSTANCES, THE AUTHORITIES WENT ON THE WRONG PR ESUMPTION THAT IT IS DONE UNDER A CONTRACT AGREEMENT WHEREAS THE RELIANCE OF THE ASSESSEES PA PER BOOK AT PAGE 18 ONWARDS CLEARLY SHOWS IT IS NOT A WORK DONE BY THE CONTRACTOR FOR CARRYING OUT THE WORK OF DYEING. FURTHER, THIS PAYMENT INCLUDES COST OF RAW MATERIALS. HENCE, WE HAVE NO H ESITATION TO SET ASIDE THE ORDERS OF THE AUTHORITIE S BELOW AND ALLOW THE CLAIM OF THE ASSESSEE UNDER THE HEAD DYEING CHARGES. 9. THOSE TWO DISALLOWANCES ARE TO BE DELETED AND AC CORDINGLY DELETED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. '2 '2 '2 '2 #' #' #' #' 3 4 56 3 4 56 3 4 56 3 4 56 ! ! ! !# ## # ORDER PRONOUNCED IN THE COURT ON 18.11.2011. SD/- SD/- [ . . . . 7 77 7. .. .'58 '58 '58 '58 , '# '# '# '# ] [ . . . . , ,, , ] [ C. D. RAO ] [ N. VIJAYAKUMARAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER D ATED : 18TH NOVEMBER, 2011. '2 0 -%% 9''/ COPY OF THE ORDER FORWARDED TO: 1. *+ /APPELLANT : M/S. J.M.C. GARMENTS, 139A, RASHBEHAR I AVENUE, KOLKATA-700 029. 2 . -.*+ / RESPONDENT : INCOME TAX OFFICER/WARD-30(2), AAYA KAR BHAWAN, DAKSHIN, 2, GARIAHAT ROA D, KOLKATA-700 031. 3. %2 - / CIT, 4. %2 ()/ CIT(A), KOLKATA. 5. 7%4 -%/ DR, KOLKATA BENCHES, KOLKATA [. -%/ TRUE COPY] '2/ BY ORDER, /ASSTT REGISTRAR [KKC BC %D %E /SR.PS]