Mr. Siba Narayan Rout, Bhadrak V. ACI, Balasore

ITA 178/CTK/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7587 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 25-10-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 17-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: D DAS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N. S SAINI, ACCOUNTANT MEMBER ITA NO.178 /CTK/2015 ASSESSMENT YEAR : 2006 - 07 MR SIBA NARAYAN ROUT, PROP. ARPITA CONSTRUCTION, BIMBALABAR, PATULI, BARIKPUR BAZAR, BHADRAK. VS. ACIT, BALASORE CIRCLE, BALASORE PAN/GIR NO. AGHPR 3192 D (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI D.DAS, AR REVENUE BY : SHRI D.K.PRADHAN , DR DATE OF HEARING : 2 5 /10 / 2016 DATE OF PRONOUNCEMENT : 25 /10 / 2016 O R D E R THIS I S AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - CUTTACK, DATED 22.1.2015, FOR THE ASSESSMENT YEAR 2006 - 07. 2. GROUND NOS.1 AND 4 OF THE APPEAL ARE GENERAL IN NATURE AND HENCE, REQUIRES NO SEPARATE ADJUDICATION. 3. IN GROUND N.2 OF THE APPEAL, THE ASSESSEE HAS CHALLENGED INITIATION OF PROCEEDINGS U/S.147 OF THE ACT. 2 ITA NO.178/CTK/2015 ASSESSMENT YEAR :2006 - 07 4. AT THE TIME OF HEARING, LD A.R. OF THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING THIS GROUND OF APPEAL AND MADE AN ENDORSEMENT TO THIS EFFECT ON THE GROUND OF APPEAL APPENDED TO FOR M NO.36 OF THE APPEAL MEMO. THEREFORE, THIS GROUND IS DISMISSED AS NOT PRESSED. 5. IN GROUND NO.3 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ORDER PASSED BY THE ASSESSING OFFICER ADDING RS.24,31,171/ - U/S.40 (A)(IA) OF THE ACT. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS PAID MACHINERY HIRE CHARGES OF RS.24,31,171/ - TO THE FOLLOWING PERSONS: 1. SIGMA CONSTRUCTION : RS.4,90,002/ - 2. M/S. P:EACE POINT : RS.5,43,225/ - 3. ARUN CONSTRUCTION : RS.3,04,871/ - 4. S.A. EARTH MOVERS : RS.3,05,033/ - 5. SUBHAM INTERNATIONAL : RS.3,97,464/ - 6. SURESH YADAV : RS.3,90,576/ - TOTAL: RS.24,31,17 1/ - 7. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE PAYMENTS WERE MADE WITHOUT DEDUCTING TDS U/S.194C AND, THEREFORE, BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, THE ASSESSING OFFICER DISALLOWED DEDUCTION OF RS.24,31,171/ - CLAIMED BY THE ASSESSEE. 8. ON APPEAL, THE LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 9. LD A.R. OF THE ASSESSEE ARGUED THAT THE PRESENT YEAR OF APPEAL IS ASSESSMENT YEAR 2006 - 07 AND THAT THE HONBLE MADRAS HIGH COURT IN THE 3 ITA NO.178/CTK/2015 ASSESSMENT YEAR :2006 - 07 CASE OF CIT - 1, TRICHIRAPALLI VS D.RATHINAM ((2011) 335 ITR 101 (MADRAS) HAS HELD THAT RELEVANT SECTION WHICH WAS APPLICABLE TO THE CASE AT HAND, IN RELATION TO SUM INCURRED BY THE ASSESSEE BY WAY OF HIRE CHARGES, WAS SECTION 194 - I OF THE ACT WAS UNASSAILABLE. THEREFORE, WHEN INDISPU TABLY SECTION 194 - I OF THE A CT CAME TO PROVIDE FOR MAKING THE TDS IN RESPECT OF MACHINERY/EQUIPMENTS ONLY WITH EFFECT FROM 1.6.2007 AND THE RELEVANT ASSESSMENT YEAR WAS 2005 - 06, THERE WAS NO SCOPE AT ALL TO FIND FAULT WITH THE ASSESSEE FOR ANY VIOLATION O F SECTION 40(A)(IA) OF THE INCOME TAX ACT. IN THE PRESENT CASE ALSO, IT IS NOT IN DISPUTE THAT THE ASSESSMENT YEAR UNDER APPEAL IS 2006 - 07, THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE QUOTED DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF D.RATHINAM( SUPRA), I HOLD THAT THE ASSESSEE WAS NOT LIABLE TO D E D U C T TDS FROM THE HIRE CHARGES A N D T H E A S S E S S I N G O F F I C E R W A S N O T J U S T I F I E D I N D I S A L L O W I N G D E D U C T I O N F O R T H E S A M E BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. I, THEREFORE, SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE DISALLOWANCE OF RS.24,31,171/ - AND ALLOW GROUND OF APPEAL TAKEN BY THE ASSESSEE. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 25 /10 /2016 IN THE PRESENCE OF PARTIES. S D / - ( N. S SAINI ) A CCOUNTANT MEMBE R CUTTACK; DATED 25 /10 /2016 B.K.PARIDA, SPS 4 ITA NO.178/CTK/2015 ASSESSMENT YEAR :2006 - 07 COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK 1. THE APPELLANT : MR SIBA NARAYAN ROUT, PROP. ARPITA CONSTRUCTION, BIMBALABAR, PATULI, BARIKPUR BAZAR, BHADRAK. 2. THE RESPONDENT. ACIT, BALASORE CIRCLE, BALASORE 3. THE CIT(A) CUTTACK 4. CIT , CUTTACK 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//