Income-tax Officer, V. Sinnar Taluka Sahakari Dudh Utpadak and Prakriya Sangh Maryadit,

ITA 1706/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1984 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 10-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIPUL WAGHMARE
• Assessee Lawyers: R P DAWARE
• Keywords: Tax effect

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , ! , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1706/PN/2014 #& & / ASSESSMENT YEAR : 2010-11 ITO, WARD-1(3), NASHIK . / APPELLANT V/S SINNAR TALUKA SAHAKARI DUDH UTPADAK AND PRAKRIYA SANGH MARYADIT, TAL. SINNAR, DIST. NASHIK 422103 PAN NO.AADAS3474Q . / RESPONDENT / ASSESSEE BY : SHRI R.P. DAWARE / REVENUE BY : SHRI VIPUL WAGHMARE / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE OR DER DATED 04-07-2014 OF THE CIT(A)-I, NASHIK RELATING TO ASSE SSMENT YEAR 2010-11. 2. DELETION OF RS.63,50,002/- MADE BY THE AO U/S.40(A)(IA) OF TH E I.T. ACT IS THE ONLY ISSUE RAISED BY THE REVENUE IN THE GROUNDS OF APPEAL. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A FEDERAL MILK SOCIETY AND FILED ITS RETURN OF INCOME ON 28-09-2010 D ECLARING / DATE OF HEARING :03.05.2016 / DATE OF PRONOUNCEMENT: 04.05.2016 2 ITA NO.1706/PN/2014 TOTAL INCOME OF NIL. DURING THE COURSE OF ASSESSMENT PROCE EDINGS THE AO NOTED THAT THE ASSESSEE HAS MADE COMMISSION PAYMEN T WITHOUT DEDUCTING TDS AS PER THE PROVISIONS OF SECTION 194H. HE, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN AS TO WHY DISALLOWANCE SHO ULD NOT BE MADE U/S.40(A)(IA) OF THE I.T. ACT. THE ASSESSEE SUBMITTED T HAT THE SAID PROVISIONS ARE NOT APPLICABLE TO IT. HOWEVER, THE AO REJECTED SUCH EXPLANATION GIVEN BY THE ASSESSEE. ACCORDING TO HIM , THE TRANSACTION BETWEEN THE ASSESSEE AND THE PRIMARY COOP ERATIVE SOCIETY ARE NOT INDEPENDENT SALE TRANSACTION. THE MILK SUPPLIED BY MILK SOCIETY HAS TO BE COMPULSORILY SOLD BY THE ASSESSEE ONL Y TO THE STATE MILK FEDERATION AND NOT TO ANYONE ELSE. THE TRANSACTIONS ARE GOVERNED BY BYE-LAW OF CO-OP SOCIETY AND THE PRIMARY MILK SOCIETIES HAVE TO SELL MILK TO ASSESSEE WHO INTURN HAS TO SELL THE M ILK TO THE STATE FEDERATIONS. THE PRICES ARE ALSO FIXED AND IT IS ON LY FOR THE SERVICE OF PROCURING REQUIRED AMOUNT OF MILK FROM DIFFERENT AR EAS WITHIN STIPULATED TIME, DOING MINOR PROCESSING AND ENSURING T IMELY AND SMOOTH SUPPLY OF MILK FOR WHICH THE ASSESSEE SOCIETY IS EARNING COMMISSION INCOME. THUS, THE CLAIM OF THE ASSESSEE THAT TH E TRANSACTION BETWEEN IT AND THE PRIMARY CO-OPERATIVE SOC IETY ARE ON PRINCIPAL TO PRINCIPAL BASIS IS NOT CORRECT. HENCE, THE ASSE SSEE HAS TO DEDUCT TAX AT SOURCE ON THE COMMISSION PAID TO PRIMARY SOCIETY IN VIEW OF THE EXPLANATION (I) TO SECTION 194H OF THE I.T. ACT. THEREFORE, THE AO HELD THAT THE ASSESSEE SOCIETY HAS DEFAULTED IN C OMPLYING WITH THE TDS PROVISIONS BY NOT DEDUCTING TDS. THE AO ACC ORDINGLY DISALLOWED COMMISSION EXPENDITURE OF RS.63,50,002/- U/S.40(A)(IA) O F THE I.T. ACT, 1961. 4. IN APPEAL THE LD.CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER : 3 ITA NO.1706/PN/2014 6. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE , THE ASSESSMENT ORDER, THE SUBMISSION OF THE APPELLANT, PRELIMINARY RE MAND REPORT OF THE AO, THE DECISION OF THE HON'BLE ITAT PUNE IN APPELLA NT'S OWN CASE FOR AY. 2009-10. THE GROUND OF APPEAL RELATING TO NON DEDUC TION OF TDS U/S 194H ON RS. 63,50,000/- THAT THE APPELLANT SOCIETY HA S PAID TO THE PRIMARY SOCIETY AS COMMISSION IS IDENTICAL WITH THE GROU ND OF APPEAL IN AY. 2009-10 WHEREIN THE HON'BLE ITAT HAS ALLOWED TH IS GROUND OF APPEAL IN FAVOUR OF THE APPELLANT IN I.T.A NOS.1553/PN/2013 DATED 28/05/2014. IN AY. 2009-10, THE AO HAD DISALLOWED RS. 37,85,501/- U/S 40(A)(IA) ON THE GROUND THAT THE ASSESSEE HAS NOT DEDUC TED TDS FROM THE COMMISSION PAID. THE CIT(A) HAD DELETED THE ADDITION AND THE REVENUE HAD CARRIED THE MATTER TO THE HON'BLE ITAT PUNE. TH E RELEVANT PART OF THE ORDER IS AS FOLLOWS:- 'WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE LD. CIT(A) WHILE DECIDING THE ISSUE HAS FOLLOWED THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF GOVERNMENT MILK SCHEME (SUPRA). NOTHING CONTRARY WAS BROUGHT TO OUR NOTICE AGAINST THE SAID ORDER OF THE TRIBUNAL WHICH HAS BEEN RELIED ON BY THE LD.CIT(A). THEREFORE, THIS BEING A COVERED MATTER WE UPHOLD TH E ORDER OF THE CIT(A) ON THIS ISSUE. THE GROUNDS RAISED BY THE RE VENUE ARE ACCORDINGLY DISMISSED. RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE IT AT IN THE APPELLANTS OWN CASE, THIS GROUND OF APPEAL STANDS ALLOWED. THIS GR OUND OF APPEAL IS ALLOWED. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE TRIBUNAL IN ASSE SSEES OWN CASE IN A.Y. 2009-10 HAS DISMISSED THE APPEAL FILED BY THE REVENUE AND UPHELD THE ORDER OF THE CIT(A) UNDER IDENTIC AL CIRCUMSTANCES. SINCE THE CIT(A) IN THE INSTANT CASE HAS FO LLOWED HIS EARLIER ORDER IN ASSESSEES OWN CASE FOR A.Y. 2009-10 AND SINCE THE TRIBUNAL HAS ALREADY UPHELD THE SAID ORDER AND DISMISSED T HE APPEAL FILED BY THE REVENUE, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) 4 ITA NO.1706/PN/2014 DELETING THE DISALLOWANCE MADE BY THE AO. THE APPEAL FILED B Y THE REVENUE BEFORE THE HONBLE HIGH COURT AGAINST THE ORDE R OF THE TRIBUNAL HAS ALSO BEEN WITHDRAWN BY THE REVENUE ON ACCO UNT OF LOW TAX EFFECT AND A COPY OF THE SAME IS PLACED ON RECORD AT PAGES 11 AND 12 OF THE PAPER BOOK. UNDER THESE CIRCUMSTANCES AND C ONSIDERING THE FACT THAT THE TRIBUNAL IN ASSESSEES OWN CASE HAS A LREADY TAKEN A VIEW IN A.Y. 2009-10 WHICH HAS BEEN FOLLOWED BY THE CIT(A) IN THE PRESENT CASE, THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A). ACCORDINGLY, THE SAME IS UPHELD. GROUND RAISED BY THE RE VENUE IS ACCORDINGLY DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04-05-2016. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE ; DATED : 04 TH MAY, 2016. ) *#,! -! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A) - I, NASHIK 4. 5. 6. THE CIT-I, NASHIK $ ''(, (, / DR, ITAT, B PUNE; - / GUARD FILE. / BY ORDER , // TRUE COPY // /0 ' ( / SR. PRIVATE SECRETARY (, / ITAT, PUNE