The D C I T -4(1), Indore V. M/s. Prashant Sagar Builders & Developers (P) Ltd., Indore

ITA 168/Ind/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4937 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 18-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Non-deduction of tax; TDS

Judgement Text

P A GE 1 | 5 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE S/SHRI C.M. GARG, JUDICIAL MEMBER AND MANISH BORAD, ACCOUNTANT MEMBER ITA NO.168/IND/2019 ASSESSMENT YEAR : 2013-14 DCIT- 4(1), INDORE VS. M/S. PRASHANT SAGAR BUILDERS AND DEVELOPERS PVT LTD., 7 TH FLOOR, MAHASAGAR CORPORATE, 10/4, MANORAMA GANJ, INDORE PAN/GIR NO.AAECP 9435 B (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI P.K.SINGH, SR, DR DATE OF HEARING : 29 /7/ 2021 DATE OF PRONOUNCEMENT : 29 /9/2021 O R D E R PER BENCH THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A)-II, INDORE DATED 14.11.2018 FOR THE ASSESSM ENT YEAR 2013-14. 2. THE ONLY EFFECTIVE GROUND TAKEN BY THE REVENUE I N THIS APPEAL IS THAT THE LD CIT(A) IS NOT JUSTIFIED IN DELETING THE DISA LLOWANCE OF RS.8,40,000/- U/S.40(A)(IA) OF THE ACT FOR NON-DEDUCTION OF TAX A T SOURCE ON PAYMENT OF RS.28,00,000/-. 3. NONE APPEARED ON BEHALF OF THE RESPONDENT-ASSESS EE, WHEN THE MATTER WAS CALLED FOR HEARING. HENCE, WE PROCEED T O DECIDE THE APPEAL OF P A GE 2 | 5 THE REVENUE EXPARTE AFTER HEARING THE LD D.R. AND T HE MATERIALS AVAILABLE ON RECORD. 4. THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS MADE THE PAYMENT UNDER THE FOLLOWING HEADS AS UNDER: I) RS.1,00,000/- ( SIS RS.2,00,000) TO RAJENDRA KUMAR JAIN TOWARDS PURCHASE OF MATERIALS FOR VASTU PUJA. II) RS.25,00,000/- TO THE LAND OWNER TOWARDS PURCHA SE OF LAND AGAINST THE AGREEMENT. III) RS.1,00,000/- FOR PAYMENT OF MATERIALS FOR A B ORE WELL. 5. SINCE THE ASSESSEE HAD NOT DEDUCTED TDS ON THE A BOVE AMOUNT, THE ASSESSING OFFICER MADE DISALLOWANCE @ 30% OF RS.28 ,00,000/- WHICH COMES TO RS,8,40,000/-. 6. ON APPEAL, THE LD CIT(A) OBSERVED THAT IN RESPEC T OF BASTU PUJA, THE ASSESSEE HAS MADE PAYMENT RS.1,00,000/-, BUT THE AO HAS TAKEN RS.2,00,000/-. HE ALSO DELETED THE DISALLOWANCE MAD E BY THE AO, INTER ALIA, OBSERVING AS UNDER: 3.2 DURING THE COURSE OF APPELLATE PROCEEDINGS, TH E APPELLANT HAS SUBMITTED THAT HE HAD MADE THE PAYMENT REGARDING TH E VASSTU POOJA OF RS.1,00,000 WHICH WAS GIVEN BY HIM THROUGH CHEQUE. THE APPELLANT HAS ALSO SUBMITTED THE COPY OF THE BANK C HEQUE. BUT THE AO HAD TAKEN THE SAID PURCHASING AMOUNT OF RS.2,00, 000/- INSTEAD OF RS.1,00,000. FURTHER, THE APPELLANT HAS SUBMITTED THE CONFIRMATION OF ACCOUNT REGARDING THE PAYMENT OF RS.25,00,000. 3.3 THE APPELLANT HAS ALSO TAKEN THE PLEA THAT TDS PROVISIONS ARE NOT APPLICABLE ON PURCHASE OF MATERIALS. THEREFORE, NO TDS WAS REQUIRED TO BE MADE BY THE APPELLANT. FURTHER, THE APPELLAN T HAS SUBMITTED P A GE 3 | 5 THAT THE BAYANA WAS GIVEN FOR THE PURCHASING OF AGR ICULTURAL LAND FOR DEVELOPMENT OF THE SITE/RESIDENTIAL COLONY ON THIS AGRICULTURAL LAND. HENCE, THE PROVISIONS OF TDS WERE NOT APPLICABLE ON THE STAGE OF AGREEMENT FOR PURCHASE OF AGRICULTURAL LAND. THE A PPELLANT HAS ALSO SUBMITTED ALL THE RELEVANT DOCUMENTS WITH REGARD TO PURCHASING OF THE SAID MATERIALS. 3.4 THE APPELLANT HAS RELIED ON THE DECISION OF PUN E ITAT IN THE CASE OF ESHAN MINERALS PVT LTD., VS DCIT (ITAT PUNE). I T IS A SETTLED LAW THAT THE PURCHASE OF MATERIAL DOES NOT ATTRACT TDS PROVISION. TDS PROVISIONS ARE ATTRACTED WHERE TRANSACTION INVOLVES AN ELEMENT OF SERVICE. HENCE, IN VIEW OF THE ABOVE FACTS AND DOC UMENTS SO SUBMITTED BY THE APPELLANT, IT IS CLEAR THAT THE AP PELLANT WAS NOT REQUIRED TO DEDUCT ON THE PURCHASE OF MATERIALS AND ON THE PAYMENT OF BAYANA SO GIVEN BY HIM TO THE OWNER OF THE LAND FOR PURCHASING OF LAND. THUS, IN LIGHT OF THE ABOVE FACT, THIS GROUN D OF APPEAL IS ALLOWED,. 7. WE HAVE HEARD THE SUBMISSION OF LD D.R. AND PER USED THE RECORD OF THE CASE. IN THIS CASE, IT IS NOT DISPUTED THAT TH E ASSESSEE HAS MADE PAYMENT FOR PURCHASE OF MATERIALS FOR VASTU POOJA, DEVELOPMENT OF AGRICULTURAL LAND AND DIGGING A BORE WELL. IT IS TH E CONTENTION OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW THAT THE PURC HASES OF MATERIALS DO NOT ATTRACT TDS PROVISIONS. IT IS CLEAR THAT THE MA NUFACTURERS/SUPPLIERS WERE INDEPENDENT ENTITIES MANUFACTURING THE ARTICLES, TH EREFORE, FOR THE PURCHASE OF MATERIALS, NO TDS IS DEDUCTIBLE. WE FIND THAT THE LD CIT(A) HAS REFERRED TO THE DECISION OF ITAT PUNE IN THE CASE OF ESHAN M INERALS PVT LTD(SUPRA), WHEREIN, IT IS HELD THAT THE PURCHASE OF MATERIAL D OES NOT ATTRACT TDS PROVISION. TDS PROVISIONS ARE ATTRACTED WHERE TRAN SACTION INVOLVES AN ELEMENT OF SERVICE. IN THIS CASE, THE TRANSACTION D OES NOT INVOLVE AN ELEMENT OF SERVICE. LD D.R. COULD NOT CONTROVERT TH E FINDINGS OF THE LD P A GE 4 | 5 CIT(A) HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CIT(A) TO INTERFERE, WHICH IS HEREBY UPHELD. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED U/S. 34(4) OF I.T.RULES, 1963 ON 29 /9/2021. SD/- SD/- ( MANISH BORAD) (CHABNDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEM BER INDORE ; DATED 29 /8/2021 B.K.PARIDA, SPS (OS) COPY OF THE ORDER FORWARDED TO : BY ORDER SR.PVT.SECRETARY ITAT, CUTTACK 1. THE APPELLANT : DCIT- 4(1), INDORE 2. THE RESPONDENT. M/S. PRASHANT SAGAR BUILDERS AND DEVELOPERS PVT LTD., 7 TH FLOOR, MAHASAGAR CORPORATE, 10/4, MANORAMA GANJ, INDORE 3. THE CIT(A)-II, INDORE, 4. PR.CIT- II, INDORE 5. DR, ITAT, INDORE 6. GUARD FILE. //TRUE COPY//