DCIT, Nashik V. C.G.Lucy Switchgear Pvt Ltd., Nashik

ITA 1489/PUN/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76077 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-01-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 06-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Assessee Lawyers: PRADIP N KAPASI
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1489/PN/2012 (ASSESSMENT YEAR : 2006-07) DY. COMMISSIONER OF INCOME TAX, CIRCLE 1, NASHIK . APPELLANT VS. C.G. LUCY SWITCHGEAR PVT. LTD., F-10, AMBAD, NASHIK. PAN : AAACC9268P . RESPONDENT C.O. NO.45/PN/2013 (ARISING OUT OF ITA NO.1489/PN/2012) (ASSESSMENT YEAR : 2006-07) C.G. LUCY SWITCHGEAR LTD., F-10, MIDC AMBAD, NASHIK 422 010. PAN : AAACC9268P . CROSS OBJECTOR VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE 1, NASHIK. . APPELLANT IN APP EAL DEPARTMENT BY : MR. P. L. PATHADE ASSESSEE BY : MR. PRADIP N. KAPASI, DATE OF HEARING : 08-01-2014 DATE OF PRONOUNCEMENT : 27-01-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE REVENUE AND THE CROSS- OBJECTION BY THE ASSESSEE IS DIRECTED AGAINST AN ORDER OF THE COMMIS SIONER OF INCOME TAX (APPEALS)-I, NASHIK DATED 04.05.2012 WHICH, IN TURN , HAS ARISEN FROM AN ORDER DATED 30.12.2011 PASSED BY THE ASSESSING OFFICER U/ S. 143(3) R.W.S. 254 OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) IN COMPLIANCE WITH THE DIRECTI ON OF THE TRIBUNAL VIDE ORDER DATED 30.08.2010 PERTAINING TO THE ASSESSMENT YEAR 2006-07. ITA NO.1489/PN/2012 C.O. NO.45/PN/2013 A.Y. 2006-07 2. IN THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S. 254 OF THE ACT IN PURSUANCE TO THE ORDER OF THE TRIBUNAL DATED 30.08.2010 (SUPRA) A DISALLOWANCE OF RS.1,15,59,744 /- WAS MADE BY INVOKING SECTION 40(A)(IA) OF THE ACT ON ACCOUNT OF PURCHASE S MADE FROM TWO PARTIES BY TREATING SUCH PURCHASES AS WORKS CONTRACT. THE C IT(A) BY WAY OF THE IMPUGNED ORDER HAS DELETED THE ADDITION TO THE EXTE NT OF RS.91,08,409/-, WHILE RETAINING THE ADDITION OF RS.24,51,335/-. BY WAY O F THE PRESENT APPEAL, THE REVENUE HAS CHALLENGED THE ACTION OF THE CIT(A) IN DELETING THE ADDITION TO THE EXTENT OF RS.91,08,409/-. 3. AT THE OUTSET, THE LEARNED REPRESENTATIVE FOR TH E ASSESSEE POINTED OUT THAT THE COMPONENT OF ADDITION TO THE EXTENT OF RS. 24,51,335/- SUSTAINED BY THE CIT(A) WAS A SUBJECT-MATTER OF ADJUDICATION BY THE TRIBUNAL IN THE APPEAL OF THE ASSESSEE VIDE ITA NO.1293/PN/2012 DATED 06.07.2 012. A COPY OF THE SAID ORDER WAS FURNISHED WHEREIN IT HAS BEEN HELD B Y THE TRIBUNAL THAT THE PROVISIONS OF SECTION 194C OF THE ACT ARE NOT APPLI CABLE TO THE PURCHASE OF GOODS FROM THE TWO VENDORS, NAMELY, SHUBHADA POLYME RS PRODUCTS PVT. LTD. AND PRESS METAL INDUSTRIES AND THEREFORE, THERE WAS NO REQUIREMENT FOR THE ASSESSEE TO HAVE DEDUCTED TAX AT SOURCE IN TERMS OF SECTION 194C OF THE ACT. THEREFORE, THE ADDITION OF RS.24,51,335/- MADE BY T HE ASSESSING OFFICER U/S 40(A)(IA) OF THE ACT WAS DIRECTED TO BE DELETED. O N THIS BASIS, THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT EVEN THE PURCHASES IN QUESTION I.E. RS.91,08,409/- ARE ALSO MADE FROM THE SAME PARTIES UNDER IDENTICAL CIRCUMSTANCES, WHICH HAVE ALREADY BEEN CONSIDERED B Y THE TRIBUNAL IN ITS ORDER DATED 06.07.2012 (SUPRA). ON THE SAME BASIS, IT IS SOUGHT TO BE CANVASSED BY THE ASSESSEE THAT THE PROVISIONS OF SE CTION 194C OF THE ACT ARE NOT ATTRACTED AND THEREFORE THE CORRESPONDING EXPEN DITURE OF PURCHASES OF RS. 91,08,409/- CANNOT BE SUBJECT TO DISALLOWANCE U/S 4 0(A)(IA) OF THE ACT. ITA NO.1489/PN/2012 C.O. NO.45/PN/2013 A.Y. 2006-07 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NOT DISPUTED THE AFORESAID FACTUAL MATRIX BROUGHT OUT BY THE ASSESSE E. 5. AS A RESULT OF THE AFORESAID, IT HAS TO BE HELD THAT HAVING REGARD TO THE DECISION OF THE TRIBUNAL IN THE ASSESSES OWN CASE DATED 06.07.2012 (SUPRA) THE PURCHASES OF RS.91,08,409/- MADE FROM THE PARTI ES IN QUESTION DO NOT FALL WITHIN THE SCOPE AND AMBIT OF TAX DEDUCTION AT SOUR CE U/S 194C OF THE ACT AND THEREFORE THE SAME COULD NOT BE DISALLOWED U/S 40(A )(IA) OF THE ACT FOR NON- DEDUCTION OF TAX AT SOURCE. THEREFORE, THE ULTIMAT E CONCLUSION OF THE CIT(A) IS LIABLE TO BE UPHELD. 6. BEFORE PARTING, WE MAY OBSERVE THAT THE CIT(A) H AS DELETED THE DISALLOWANCE OF RS.91,08,409/- MADE U/S 40(A)(IA) O F THE ACT ON THE GROUND THAT THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT IS A TTRACTED ONLY TO AN AMOUNT PAYABLE AND NOT TO THE AMOUNTS ALREADY PAID. WITHO UT GOING INTO THIS CONTROVERSY, WE FIND THAT THE MATTER IN QUESTION IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE VIDE ORDER DATED 06.07.2012 (SUPRA). THEREFORE, THE ULTIMATE CONCLUSION OF THE CIT(A) IN DELETING THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT IS HEREBY AFFIRMED, ALBEIT ON A DIFFERENT GROUND. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. 8. IN THE CROSS-OBJECTION PREFERRED BY THE ASSESSEE , THE GROUNDS ARE ONLY IN SUPPORT OF THE PROPOSITION CONSIDERED BY THE TRI BUNAL IN ITS ORDER DATED 06.07.2012 (SUPRA) AND ARE ACCORDINGLY RENDERED ACA DEMIC IN VIEW OF OUR DECISION IN THE APPEAL OF THE REVENUE. THUS, ASSES SEES CROSS-OBJECTION IS TREATED AS INFRUCTUOUS. 9. RESULTANTLY, THE APPEAL OF THE REVENUE AS WEL L AS CROSS-OBJECTION OF THE ASSESSEE IS DISMISSED, AS ABOVE. ITA NO.1489/PN/2012 C.O. NO.45/PN/2013 A.Y. 2006-07 ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH JANUARY, 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 27 TH JANUARY, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR, A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE