M/S CAPITALTRANSPORT CORPORATION OF INDIA, Kolkata V. ITO WARD 56(3) KOLKATA, Kolkata

ITA 1753/KOL/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54454 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 15-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Assessee Lawyers: S M SURANA
• Section: 194C

Judgement Text

, , , , , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [ . . . . . .. . , , !' !' !' !' , ] [BEFORE HONBLE SHRI S.V. MEHROTRA, AM & HONBLE SHRI MAHAVIR SINGH, JM '# '# '# '# / I.T.A NO. 1753/KOL/2009 !$% &' !$% &' !$% &' !$% &'/ // / ASSESSMENT YEAR : 2006-07 M/S. CAPITAL TRANSPORT CORPORATION -VS.- INCOME TAX OFFICER/WARD-56(3) OF INDIA, KOLKATA [PAN : AABFC 9559 K] KOLKATA. [ )* )* )* )* /APPELLANT ] ]] ] [ ,-)* ,-)* ,-)* ,-)*/ // / RESPONDENT ] ]] ] )* )* )* )* / FOR THE APPELLANT : SHRI S. M. SURANA ,-)* ,-)* ,-)* ,-)* / FOR THE RESPONDENT : SHRI S. K. ROY . /ORDER . . . . . .. . , PER S. V. MEHROTRA, A. M. THE ASSESSEE HAS PREFERRED THIS APPEAL FOR ASSESSM ENT YEAR 2006-07 AGAINST ORDER OF LD. CIT(A)-XXXVI, KOLKATA DATED 21.08.2009. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS UNDER :- 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DISALLOWING LORRY HIRE PAYMENT OF RS.24,74,376/- U/S.40(A)(IA) OF THE INCOME TAX ACT, L961 FOR NON DEDUCTION OF TDS AS THE OWNERS OF LORRIES FURNISHED FORM NO. 151 TO THE APPELLANT FIRM BEFORE THE DATE OF PAYMENT OF LORRY HIRE. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DISALLOWING LORRY HIRE PAYMENT FOR NON DEDUCTION OF PAYMENT, HOWEVER THE APPELLANT FIRM HA S FILED COPY OF FORM NO. 151 BEFORE THE ASSESSING OFFICER BEFORE THE COMPLET ION OF ASSESSMENT AND A COPY OF THE SAME WAS FILED BEFORE THE COMMISSIONER OF IN COME TAX (APPEALS) ON GROUND THAT FORM NO.1 5J WAS NOT FILED ALONG WITH F ORM NO.151 BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), BECAUSE OF TH E LACK OF KNOWLEDGE OF THE ACT. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DISALLOWING INTER EST RS.36,000/- PAYABLE TO ITA NO. 1753/KOL/2009 2 MRS.KOSHALYA DEVI HADA FOR NON DEDUCTION OF TDS , A S MRS.KOSHALYA DEVI HADA HAS SUBMITTED FORM NO.15H AS HER INCOME WAS BE LOW TAXABLE LIMIT, BUT THE FORM NO. 15J WAS NOT FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), BECAUSE OF THE LACK OF KNOWLEDGE OF THE ACT. HOWEVE R FORM NO 15H WAS SUBMITTED BY MRS.KOSHALYA DEVI HADA BEFORE THE ASSE SSING OFFICER BEFORE THE COMPLETION OF ASSESSMENT. 4. THAT THE APPELLANT CRAVES LEAVE TO SUPPLEMENT, C ANCEL OR OTHERWISE AMEND ANY OF THE GROUNDS HEREIN ABOVE BEFORE OR AT THE TIME O F THE HEARING OF THE APPEAL. 2. BRIEF FACTS APROPOS GROUND NOS.1 & 2 ARE THAT TH E ASSESSEE, IN THE RELEVANT ASSESSMENT YEAR, WAS ENGAGED IN THE TRANSPORTATION BUSINESS. THE ASS ESSEE WAS NOT OWNING ANY GOODS VEHICLE. AFTER OBTAINING A CONTRACT IN TRANSPORT OF GOODS, ASSESSE E USED TO ENGAGE A SUB-CONTRACTOR TO CARRY OUT THE JOB AND PAID HIM HIRE CHARGES FOR HIS VEHICLE. ASSE SSING OFFICER NOTICED THAT ASSESSEE HAD SHOWN LORRY HIRE CHARGES AMOUNTING TO RS.3,44,11,095/-. A SSESSING OFFICER NOTICED THAT OUT OF THIS PAYMENT ASSESSEE WAS UNDER OBLIGATION TO MAKE DEDUC TION UNDER SECTION 194C IN RESPECT OF PAYMENTS AGGREGATING TO RS.1,54,16,846/-. BEFORE TH E ASSESSING OFFICER, ASSESSEE HAD EXPLAINED AS UNDER :- .AT HEARING STAGE THE A/R STATED THAT PARTICULA RS OF PAYMENTS ARE MAINTAINED AS PER THE TRUCK NUMBERS. BUT, THE ANNEX URE TO FORM 26Q MAY CONTAIN ONLY THE NAMES OF PERSONS AS DEFINED IN THE I.T. ACT, 1961. THE ASSESSEE COULD NOT PROVIDE ANY RECONCILIATION TO ES TABLISH WHETHER ANY TDS WERE MADE AND DEPOSITED FOR THE ABOVE DISCUSSED AMOUNT. THE A/R, IN HIS SUBMISSION DATED 30.12.2008 MENTIONED THAT, .. ASSESSEE FIRM IS NOT IN POSSESSION OF THE COPY OF FORM 26 AND IT WIL L NOT BE POSSIBLE FOR THE ASSESSEE FIRM TO PROCURE THE SAME FROM THE EFILLING INTERMEDIARY IN SUCH A SHORT NOTICE. BEFORE THE ASSESSING OFFICER, IT WAS, INTER ALIA, S UBMITTED THAT ASSESSEE HAD RECEIVED DECLARATION IN FORM 15I FROM THE TRUCK OWNERS. HOWEVER, DUE TO IGN ORANCE OF THE FACT THAT 15J WAS REQUIRED TO BE SUBMITTED, ASSESSEE DID NOT SUBMIT FORM 15J ALONGWI TH FORM 15I RECEIVED FROM THE TRUCK OWNERS. ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT THE ASSE SSEES CONTENTION AND MADE ADDITION OF RS.1,54,16,846/-. LD. CIT(A) AFTER CONSIDERING THE ASSESSEES SUBMISSION OBSERVED THAT IT WAS CLEAR FROM FORM 26Q THAT ASSESSEE HAD DEDUCTED TDS FOR LORRY HIRE PAYMENTS OF RS.1,29,42,417/- WHILE THE TDS WAS NOT DEDUCTED ON PAYMENT OF LORRY HIRE CHARGES OF RS.24,74,376/-. AFTER CONSIDERING THE ASSESSEES SUBMISSION THAT FORM 15I WAS RECEIVED FROM THE RESPECTIVE TURN OVER IN RESPECT OF RS.24,74,376/- DID NOT ACCEPT THE ASSESS EES PLEA AND CONFIRMED THE DISALLOWANCE TO THE EXTENT OF RS.24,74,376/-. ITA NO. 1753/KOL/2009 3 3. BEING AGGRIEVED ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORDS OF THE CASE. THERE IS NO DISPUTE THAT ASSESSEE HAD REC EIVED FORM 15I FROM THE TRUCK OWNERS TO WHOM THE PAYMENTS WERE MADE WITHOUT MAKING TDS. HOWEVER, THE ONLY DEFAULT OF ASSESSEE WAS NON- FURNISHING OF FORM 15J ALONGWITH FORM 15I. LD. COUN SEL APPEARING ON BEHALF OF THE ASSESSEE HAS RELIED ON THE FOLLOWING DECISIONS FOR THE PROPOSITI ON THAT EVEN IF FORM 15I/15J RECEIVED ARE NOT SUBMITTED TO LD. CIT(A), 194C WILL NOT APPLY :- (I) ITO VS. SHRI CHANDAN GOPAL SHROFF IN ITA NO. 84 4/KOL/2008 OF KOLKATA BENCH VIDE ORDER DATED 31.07.2009. (II) ITO VS. M/S. ASHABHAI BABARBHAI PATEL & CO. IN ITA NO.2195/AHD2010 OF AHMEDABAD BENCH VIDE ORDER DATED 10.12.2010. (III) SHRI VIPIN P. MEHTA VS. ITO IN ITA NO. 3317/MUM/201 0 OF MUMBAI BENCH VIDE ORDER DATED 20.05.2011. (IV) ITO VS. RAJESH KR. GARG IN ITA NO.532/KOL/2011 OF K OLKATA BENCH VIDE ORDER DATED 05.08.2011. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORDS OF THE CASE. ITAT, MUMBAI BENCH IN THE CASE OF SHRI VI PIN P. MEHTA VS. ITO IN ITA NO.3317/MUM/2010 VIDE ORDER DATED 20.05.2011, HAS, INTER ALIA, HELD AS UNDER :- .ALL THESE PROVISIONS INDICATE THAT THE FAILUR E ON THE PART OF THE ASSESSEE, WHO IS THE PAYER OF THE INTEREST, TO FILE THE DECLARATIONS GIVEN TO HIM BY THE PAYEES OF THE INTEREST, WITHIN THE TIME LIMIT S PECIFIED IN SUB-SECTION (2) TO SECTION 197A IS DISTINCT AND SEPARATE AND MERELY BE CAUSE THERE IS A FAILURE ON THE PART OF THE ASSESSEE TO SUBMIT THE DECLARATIONS TO THE INCOME-TAX DEPARTMENT WITHIN THE TIME LIMIT, IT CANNOT BE SAID THAT THE A SSESSEE DID NOT HAVE DECLARATIONS WITH HIM AT THE TIME WHEN HE PAID THE INTEREST TO T HE PAYEES. THAT WOULD BE A SEPARATE MATTER AND SEPARATE PROOF AND EVIDENCE IS REQUIRED TO SHOW THAT EVEN WHEN THE ASSESSEE PAID THE INTEREST, HE DID NOT HAV E THE DECLARATIONS FROM PAYEES WITH HIM AND THEREFORE HE OUGHT TO HAVE DEDUCTED TH E TAX FROM THE PAYMENT. NO SUCH EVIDENCE OR PROOF HAS BEEN BROUGHT BY THE DEPA RTMENT. FOR THE AFORESAID REASONS, WE ACCEPT THE ASSESSEE S CLAIM THAT SINCE HE HAD THE DECLARATIONS OF THE PAYEES IN THE PRESCRIBE D FORM BEFORE HIM AT THE TIME WHEN THE INTEREST WAS PAID, HE WAS NOT LIABLE TO DE DUCT TAX THEREFROM UNDER SECTION 194A. IF HE WAS NOT LIABLE TO DEDUCT TAX, S ECTION 40(A)(IA) IS NOT ATTRACTED. THERE IS NO OTHER GROUND TAKEN BY THE INCOME TAX AU THORITIES TO DISALLOW THE INTEREST. WE THEREFORE ACCEPT THE ASSESSEES APPEAL AND DELETE THE DISALLOWANCE OF INTEREST OF RS.7,87,291/-. ITA NO. 1753/KOL/2009 4 6. IN THE PRESENT CASE BEFORE THE ASSESSING OFFICER ASSESSEE HAD SUBMITTED THAT FORM 15-I RECEIVED BY HIM COULD NOT BE DEPOSITED WITH THE LD. CIT. ASSESSEES SUBMISSIONS HAVE BEEN REPRODUCED IN PARA-7(II) AT PAGE-4 OF ASSESSING OFF ICERS ORDER. AFTER CONSIDERING THE ASSESSEES SUBMISSION ASSESSING OFFICER, INTER ALIA, OBSERVED THAT ASSESSEE DID NOT SUBMIT FORM 15J BY 30.06.2006 BECAUSE HE HAD NOT RECEIVED FORM 15-I. H E WAS OF THE VIEW THAT 15-I WAS RECEIVED SUBSEQUENTLY WHEN THE ASSESSEE WAS CONFRONTED WITH THE ISSUE OF DISALLOWANCE UNDER SECTION 40(A)(IA). THE AVAILABILITY OF FORM15-I, HOWEVER, A T THE TIME OF ASSESSMENT PROCEEDINGS IS NOT DOUBTED. THEREFORE, IN VIEW OF DECISION IN THE CASE OF SHRI VIPIN P. MEHTA (SUPRA), ASSESSING OFFICER IS DIRECTED TO DELETE THE DISALLOWANCE OF R S.24.74.376/-. IN THE RESULT, GROUND NOS. 1 & 2 OF THE APPEAL ARE ALLOWED. 7. BRIEF FACTS APROPOS GROUND NO.3 ARE THAT THE ASS ESSING OFFICER NOTICED THAT ASSESSEE IN ITS BALANCE SHEET AND SCHEDULE HAD SHOWN UNSECURED LOAN OF RS.17,81,763/-. HE NOTED THAT IN SOME OF THE CASES INTEREST WAS CREDITED WITHOUT TDS. HE HAS OBSERVED THAT AT HEARING STAGE THE ASSESSEES REPRESENTATIVE PRODUCED FIVE FORM 15G STATED TO BE OBTAINED FROM SMT. KOSHALYA DEVI HEDA FOR NON-DEDUCTION OF TDS FROM INTEREST CREDITS/PAYMENTS . ASSESSING OFFICER HAS, INTER ALIA, OBSERVED AS UNDER :- PART II OF 15G FORM CONTAINS AN ITEM NUMBER 2 WHICH READS DATE ON WHICH DECLARATION WAS FURNISHED BY THE DEC LARANT WHICH IS LEFT BLANK. APART FROM THIS, THE PAYER HAS TO DELIVER TO THE COMMISSIONER ONE COPY OF THE 15G DECLARATION ON OR BEFORE 7 TH DAY OF MONTH NEXT FOLLOWING THE MONTH IN WHICH THE DECLARATION IS FURNISHED TO HIM. THE ASSESSEE, IN THE SHOW CAUSE LETTER DATED 29.12.2008, WAS ASKED T O PRODUCE/SUBMIT EVIDENCE FOR SUCH DELIVERY. THE ASSESSEE COULD NOT PRODUCE ANY SUCH PROOF FOR SUBMISSION OF 15G TO THE OFFICE OF THE CIT AND ALSO, HE DID NOT MENTION ANYTHING IN HIS REPLY DATED 30.12.2008. ASSESSING OFFICER HAD DISALLOWED INTEREST IN RESPEC T OF 14 PERSONS TO WHOM INTEREST HAD BEEN SO CREDITED. LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE TO RS.36,000/- IN RESPECT OF INTEREST PAYMENT TO SMT. KOSHALYA DEVI H EDA AS AGAINST RS.1,08,002/- MADE BY THE ASSESSING OFFICER, INTER ALIA, OBSERVING AS UNDER : - .HOWEVER NO TDS WAS DEDUCTED IN RESPECT OF PAY MENT OF RS.36,000/- TO MS. KOSHALYA DEVI HEDA NOR FORM 15-J ALONGWITH FORM 15-I WAS FURNISHED BEFORE THE COMMISSIONER OF INCOME TAX CONCERNED. THOUGH TH E A/R CLAIMED THAT FORM 15-I WAS OBTAINED BY THE APPELLANT NO EVIDENCES IN THIS REGARD WAS FILED BEFORE ME. THE DECISION RELIED ON BY THE A/R WERE NOT ON THE I SSUE AT HAND. THE DECISION IN ITA NO. 1753/KOL/2009 5 THE CASE OF SUDARSHAN AUTO GENERAL FINANCE REFERRED TO ABOVE WAS CONCERNED WITH LEVY OF PENALTY. THE OTHER DECISIONS ARE ALSO NOT O N THE PROVISIONS OF SECTION 40(A)(IA). THEREFORE, THEY DO NOT SUPPORT THE APPEL LANTS CASE. ACCORDINGLY, THE DISALLOWANCE OF INTEREST PAYMENT O F RS.36,000/- IS CONFIRMED. THE A.O. IS DIRECTED TO RESTRICT THE DISALLOWANCE ON IN TEREST PAYMENT TO RS.36,000/-. 8. HAVING HEARD BOTH THE PARTIES, WE FIND THAT THIS ISSUE IS ALSO COVERED BY THE DECISION IN THE CASE OF SHRI VIPIN P. MEHTA (SUPRA) BECAUSE HERE AL SO LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAD PRODUCED FORM 15H IN COURSE OF ASSESSM ENT PROCEEDINGS. THIS GROUND OF THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . . . . . / / / / 0 /$ 1 2 0 /$ 1 2 0 /$ 1 2 0 /$ 1 2 3 3 3 3 ORDER PRON OUNCED IN THE COURT ON 11. 08. 2011. SD/- SD/- [ !' !' !' !' , ] [ . .. . . .. . , ] [ MAHAVIR SINGH ] [ S.V. MEHROTRA ] JUDICIAL MEMBER ACCOUNTANT MEMBER ( 3 3 3 3) )) ) DATED : 11TH AUGUST, 2011. . 5 ,!!6 76&/ COPY OF THE ORDER FORWARDED TO: 1. )* /APPELLANT : M/S. CAPITAL TRANSPORT CORPN. OF INDI A, 25, GANGADHAR BABU LANE, KOLKATA-70 0 012. 2 ,-)* / RESPONDENT : INCOME TAX OFFICER/WARD-56(3), 3, G OVT. PLACE (EAST), KOLKATA. 3. !.$ / CIT, 4. !.$ ()/ CIT(A), KOLKATA. 5. !1 ,!$/ DR, KOLKATA BENCHES, KOLKATA [-6 ,!/ TRUE COPY] .$// BY ORDER, '? /ASSTT REGISTRAR [KKC @A !$B? !C /SR.PS]