RANJIT SINGH MANKOO, MUMBAI V. I.TO. 23(1)(1), MUMBAI

ITA 1622/MUM/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2725 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 08-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 25-02-2011
• Court: TRIBUNAL
• Department Lawyers: B S BIST
• Assessee Lawyers: DR P DANIEL
• Keywords: Opportunity of being heard
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & RAMLAL NEGI (JM) I.T.A. NO. 1622 /MUM/ 20 1 1 (ASSESSMENT YEAR 200 7 - 0 8 ) M/S. MOULD CRAFT INDUSTRIES PROP. RANJIT SIGH MANKOO 22, DHAMJI SHAMJI INDUSTRIAL ESTATE LBS MARG, VIKHROLI WEST MUMBAI - 400 083. VS. ITO WARD 23(1)(1) BANDRA KURLA COMPLEX BANDRA EAST MUMBAI - 400 051. ( APPELLANT ) ( RESPONDENT ) PAN NO . AGAPM6796M ASSESSEE BY DR.P. DANIEL DEPARTMENT BY SHRI B.S. BIST DATE OF HEARING 21. 7 . 201 6 DATE OF PRO NOUNCEMENT 21. 7 . 201 6 O R D E R PER B.R. BASKARAN (AM) : - THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 20.12.2010 PASSED BY LEARNED CIT(A) - 33, MUMBAI AND IT RELATES TO A.Y. 2007 - 08. 2. THE ASSESSEE IS CONTESTING ADDITION OF ` 35,90,438/ - MADE BY THE ASSESSING OFFICER U/S. 40(A)(IA) OF THE ACT FOR NON DEDUCTION OF TAX AT SOURCE ON THE ABOVE SAID AMOUNT. 3. LEARNED AR SUBMITTED THAT THE ASSESSING OFFICER HAS CONSIDERED THE IMPUGNED PAYMENT AS PAYMENT MADE TOWARDS LABOUR CHARG ES A ND HAS TAKEN THE VIEW THAT THE ASSESSEE IS LIABLE TO DEDUCT TAX AT SOURCE U/S. 194C OF THE ACT. ACCORDINGLY, THE ASSESSING OFFICER HAS DISALLOWED THE ABOVE SAID AMOUNT U/S. 40(A)(IA) OF THE ACT , AS THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE. THE CONTEN TION OF LEARNED AR IS THAT THEY ARE NOT LABOUR CHARGES , BUT THEY MOULD CRAFT INDUSTRIES 2 REPRESENT PAYMENT S MADE TOWARDS PURCHASE OF GOODS. HE SUBMITTED THAT THE PROVISIONS OF DEDUCTION OF TAX SHALL NOT BE APPLICABLE IN CASE OF CONTRACT OF SALE. THE LEARNED AR SUBMITTED THAT THE ASSESSEE WOULD BE IN A POSITION TO SATISFY THE ASSESSING OFFICER IN THIS REGARD, IF AN OPPORTUNITY IS PROVIDED TO THE ASSESSEE. 4. ON THE CONTRARY, LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE DISALLOWANCE WAS MADE , SINCE THE ASSESSEE HAS DEBITED THE IMPUGNED AMOUNT UNDER THE HEAD LABOUR CHARGES AND HE DID NOT DEDUCT TAX AT SOURCE FROM THE SAID PAYMENT . 5. HAVING HEARD THE RIVAL CONTENTIONS, WE ARE OF THE VIEW THAT THE ASSESSEE SHOULD BE PROVIDED AN OPPORTUNITY TO EXPLAIN ITS CASE , SIN CE THE VERY NATURE OF PAYMENT IS BEING D ISPU TED BY THE ASSESSEE. EVEN THOUGH THE ASSESSEE HAS ACCOUNTED THE IMPUGNED PAYMENT AS LABOUR CHARGES, YET, IN OUR VIEW, THE ENTRIES MADE IN THE BOOKS OF ACCOUNT ARE NOT DETERMINATIVE OF NATURE OF TRANSACTIONS. THE ASSESSEE, IN OUR VIEW, COULD STILL SHOW THE TRUE NATURE OF TRANSACTIONS BY PRODUCING NECESSARY EVIDENCES. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LEARNED CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER WITH THE DIR ECTION TO EXAMINE THE SAME AFRESH AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 21 .7.2016 SD/ - SD/ - (R AMLAL NEGI ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 21 / 7 / 20 1 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RE SPONDENT MOULD CRAFT INDUSTRIES 3 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS