Bipra Charan Patra, Kandhamala V. ACIT, Berhampur

ITA 167/CTK/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0749 (ITAT-CUTTACK)
• Duration Of Justice: 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 06-05-2010
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: A K PADHY
• Section: 194C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T.A.NO. 167/CTK/2010 / ASSESSMENT YEAR 2006 - 07 SRI BIPRA CHARAN PATRA, PROP. NILACHAKRA CONSTRUCTION ,CHIDANANDA VIHAR, PHULBANI 762 001 PAN: ADYPP6056C - - - VERSUS - ASST.COMMISS IONER OF INCOME - TAX, BERHAMPUR CIRCLE,BERHAMPUR. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI A.K.PADHY, AR / FOR THE RESPONDENT: / SHRI S.C.MOHANTY, DR / ORDER . . . , , SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER . THE ASSESSEE HAS FILED THIS APPEAL AGAINST ORDER DT.17.2.2010 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) CONFIRMING DISALLOWANCE OF 1,83,000 U/S.40(A)(IA) OF THE INCOME - TAX ACT,1961 FOR THE ASSESSMENT YEAR 2006 - 07. 2. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN CARRYING OUT OF CONTRACT WORKS WITH GOVT. AND LOCAL AUTHORITIES. DURING THE ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE PAID 1,83,000 TO SRI M.SUBBAR A O BUT NOT DEDUCTED TAX AT SOURCE U/S.194C. THEREFORE, THE ASSESSING OFFICER DISALLOWED THE ABOVE EXPENDITURE U/S.40(A)(IA) OF THE ACT AND THE LEARNED CIT(A) CONFIRMED THE SAME. 3. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE ABOVE PAYMENTS WERE MADE ON HIRE OF ROLLER TAK EN FROM THE AFORESAID PERSON FOR THE I.T.A.NO. 167/CTK/2010 2 ASSESSEES CONTRACTUAL BUSINESS AND THERE IS NO CONTRACT BETWEEN THE ASSESSEE AND SRI M.SUBBARAO FOR CARRYING OUT ANY WORK OR TO TRANSPORT ANY GOODS OR PASSENGERS FROM ONE PLACE TO ANOTHER. THE ASSESSEE SIMPLY HIRED THE ROLLERS ON PAYMENT OF HIRE CHARGES. THEREFORE, THE PAYMENT MADE TO SRI M.SUBBARAO IS NOT SUBJECTED TO TDS U/S.194C AND AS SUCH, THE DISALLOWANCE AS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT(A) IS NOT JUSTIFIED. HE RELIED ON THE DECISI ON OF ITAT, AMRITSAR BENCH , IN THE CASE OF DCIT V. SATISH AGGARWAL & CO., (2009) 3 17 ITR (AT) 196 (AMRITSAR). THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. THE FACTS UNDISPUTED ARE THAT THE ASSESSEE HAS PAID THE ABOVE AMOUNT TO SRI M.SUBBARAO TOWARDS HIRE - CHARGES OF ROLLER S , WHICH WERE UTILISED BY THE ASSESSEE IN ITS BUSINESS OF CARRYING OUT CIVIL CONTRACT . THERE WAS NO AGREEMENT BETWEEN THE ASSESSEE AND SRI M.SUBBARAO FOR CARRYING OUT ANY WORK OR TO TRANSPORT ANY GOODS OR PASSENGERS FROM ONE PLACE TO ANOTHER. SECTION 194C OF THE ACT IS APPLICABLE TO PAYMENTS FOR CARRYING OUT ANY WORK IN PURSUANCE OF A CONTRACT. THEREF ORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT SECTION 194C IS NOT APPLICABLE IN THE PRESENT CASE AND AS SUCH, THE ASSESS EE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE ON THE SAID PAYMENT TO SRI M.SUBBARAO , MORE SO IN THE LIGHT OF THE DECISION OF THE ITAT, AMRITSAR BENCH IN THE CASE OF DCIT V. SATISH AGGARWAL & CO.(SUPRA), WHEREIN ON IDENTICAL FACTS, AS IN THE PRESENT CASE ON HAND, THE ITAT HAS HELD THAT EXPLANATION III TO SECTION 194C WAS NOT ATTRACTED. IN SUCH VIEW OF THE MATTER, WE FURTHER HOLD THAT DISALLOWANCE OF EXPENSES I.E., PAYMENT TO ROLLER HIRE CHARGES OF I.T.A.NO. 167/CTK/2010 3 1,83,000 U/S.40(A)(IA) OF THE ACT IS NOT JUSTIFIED. THE DISALLOWANCE SO MADE IS, THEREFORE, DELETED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 5. IN TH E RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 14 TH MARCH, 2011 S D/ - S D/ - ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER. ( ) DATE: 14 TH MARCH, 2011 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : SRI BIPRA CHARAN PATRA, PROP. NILACHAKRA CONSTRUCTION ,CHIDANANDA VIHAR, PHULBANI 762 001 2 / THE RESPONDENT: ASST.COMMISSIONER OF INCOME - TAX, BERHAMPUR CIRCLE,BERHAMPUR. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY ( ), ( H.K.PADHEE ), SENIOR.PRIVATE SECRETARY.