Gujarat Themis Biosyn Ltd., Vapi V. The ACIT.,Vapi Circle, Vapi

ITA 1791/AHD/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0246 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 13-07-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH MEENA
• Assessee Lawyers: M K PATEL
• Keywords: Business income
• Section: 133A; 194C; 201(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ ITA NO. 1791/AHD/2011 / ASSESSMENT YEAR : 2009-10 GUJARAT THEMIS BIOSYN LTD, 69C, GIDC, INDUSTRIAL ESTATE, VAPI PAN : AABCG 0802 C VS ITO (TDS), VALSAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI M K PATEL, AR REVENUE BY : SHRI RAJESH MEENA, SR DR / DATE OF HEARING : 22/08/2016 / DATE OF PRONOUNCEMENT: 19/10/2016 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), VALSAD DATED 31.01.2011 FOR AY 2009-10. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APP EAL:- 1. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF T HE CASE AND LAW, THE ADDITIONS MADE BY THE LEARNED ASSESSING OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ARE CON TRARY TO LAW AND BASED ON ERRONEOUS UNDERSTANDING OF THE FACTS. 2. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF T HE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CO NFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER THAT THE PAYMENT MADE TO VAPI WASTE & EFFLUENT MANAGEMENT COMPANY LIMITED FOR EFFLUENT TR EATMENT EXPENSES ARE COVERED UNDER THE DEFINITION OF 'CONTRACT'. THE ACT ION OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO THE FACTS AND LAW AND DESERVES TO BE DELETED. ITA NO. 1791/AHD/2011 GUJARAT THEMIS BIOSYN LTD V. ITO AY : 2009-10 2 3. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF T HE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CO NFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER HOLDING THAT THE COMP ANY HAS INCURRED LEGAL AND PROFESSIONAL CHARGES OF RS. 7,22,275/- ON WHICH TDS IS DEDUCTIBLE U/S. 194J OF THE ACT. THE ACTION OF THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS) IN NOT ACCEPTING THE CONTENTION OF THE APP ELLANT COMPANY THAT NO SUCH EXPENSES HAS BEEN DEBITED DURING THE YEAR IS C ONTRARY TO THE FACTS AND LAW AND DESERVES TO BE DELETED. 4. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF T HE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CO NFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER HOLDING THAT ON THE P AYMENT MADE AGAINST CONTRACT OF PROVIDING PLASTIC / TARPAULIN SHEETS ON RENTAL BASIS TO THE TUNE OF RS. 3,72,192/-, TDS IS DEDUCTIBLE U/S. 194 OF THE AC T. THE ACTION OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS CONT RARY TO THE FACTS AND LAW AND DESERVES TO BE DELETED. 3. BRIEFLY STATED FACTS ARE THAT A SURVEY ACTION U/ S 133A OF THE ACT (HEREINAFTER REFERRED TO AS THE ACT) CARRIED OUT FOR THE PURPOSE OF TDS PURPOSE IN THE FACTORY PREMISES OF THE ASSESSEE ON 05.01.2009 AND IT WAS REVEALED FROM THE TRIAL BALANCE UPTO 31.12.2008 THA T THE ASSESSEE-COMPANY HAD INCURRED VARIOUS EXPENSES DEBITED UNDER FOLLOWI NG HEADS ON WHICH TAX AT SOURCE (TDS) UNDER CHAPTER XVII OF THE ACT WAS N OT DEDUCTED AT THE TIME OF PAYMENT MADE. (I) EXPENSES INCURRED FOR EFFLUENT TREATMENT (EXPENSES INCURRED LIABLE TO DEDUCT TAX AT SOURCE U/S 194C) RS.8,02, 459/- (II) INTEREST EXPENSES - RS.5,05,234/- (III) LEGAL AND PROFESSIONAL CHARGES - RS.7,22,275/- (IV) RENT/HIRING EXPENSES - RS.3,72,192/- LD. AO, THEREFORE, CONCLUDED THAT THE ASSESSEE-COMP ANY HAS COMMITTED DEFAULT OF SHORT DEDUCTION AND NON-DEDUCT ION OF TAX AT SOURCE AND ACCORDINGLY PASSED ORDER U/S 201(1)/201(1A) OF THE ACT, LEVYING DEMAND OF RS.2,34,879/- U/S 201(1) AND INTEREST OF RS.18,768/- U/S 201(1A) OF THE ACT. ITA NO. 1791/AHD/2011 GUJARAT THEMIS BIOSYN LTD V. ITO AY : 2009-10 3 5. AGGRIEVED BY THE AFORESAID ORDER OF THE LD. AO, THE ASSESSEE-COMPANY CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CONFIRMED THE ACTION O F THE ASSESSING OFFICER EXCEPT THE CLAIM IN RESPECT OF INTEREST AND BILL DI SCOUNT EXPENSES OF RS.5,05,234/-. 6. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASS ESSEE IS NOW IN APPEAL BEFORE US. 7. GROUND NO.1 IS GENERAL IN NATURE REQUIRES NO IN DEPENDENT ADJUDICATION AND THEREFORE THE SAME IS DISMISSED. 8. WITH REGARD TO THE NON-DEDUCTION OF TDS FROM THE EXPENDITURE OF RS.8,02,459/- INCURRED FOR EFFLUENT TREATMENT, LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THIS PAYMENT MADE TO VAPI WASTE & EF FLUENT MANAGEMENT COMPANY LIMITED FOR EFFLUENT TREATMENT EXPENSES WHI CH IS COVERED UNDER THE DEFINITION OF CONTRACT. THEREFORE, THE ACTIO N OF THE LD. CIT(A) IS CONTRARY TO THE FACTS AND LAW AND DESERVES TO BE DE LETED. 9. LD. DR, ON THE OTHER HAND, SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. 10. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT LD. CIT(A) CONFIRMED THE ACTION OF THE LD. AO WITH REGARD TO EFFLUENT TREATMENT EXPENSES BY FOLLOWING OBSERVATIONS:- THE AR OF THE APPELLANT HAS SUBMITTED THAT WITH REG ARD TO PAYMENT MADE FOR EFFLUENT TREATMENT EXPENSES TO VAPI WASTE & EFF LUENT MANAGEMENT COMPANY LIMITED (VWEMCL) THAT VWEMCL HAVE PROVIDED A N ORDER DATED 02.04.2003 PASSED BY THE HON'BLE ITAT, SMC BENCH, AHM EDABAD, WHEREIN IT WAS HELD THAT VWEMCL WAS NOT CARRYING ON ANY BUS INESS BY PROVIDING SERVICES TO ITS OWN MEMBERS, ON THE DOCTRINE OF MUT UALITY EMBEDDED THEREIN. ITA NO. 1791/AHD/2011 GUJARAT THEMIS BIOSYN LTD V. ITO AY : 2009-10 4 THE DOCTRINE OF MUTUALITY VIS-A-VIS INCOME UNDER TH E INCOME TAX ACT, IS ALSO BEEN CLARIFIED BY THE HON'BLE APEX COURT IN THE CAS E OF CHELMSFORD CLUB VS. CIT [2000] 109 TAXMAN 215 (SC). THE APPELLANT COMPANY BEING ONE OF THE MEMBERS OF VWEMCL, AND HAVING THE DOCTRINE OF MUTUA LITY EMBEDDED THEREIN, SUCH AMOUNT PAID BY THE APPELLANT TO THE S AID MUTUAL CONCERN IS NOT COVERED UNDER THE DEFINITION OF 'CONTRACT' FOR THE PURPOSE OF SEC. 194C OF THE ACT. CONSIDERING THE ABOVE, NO TDS IS DEDUCTIBLE FRO M THE AFOREMENTIONED PAYMENT AND KINDLY MAY BE ALLOW THIS GROUND OF APPE AL. I HAVE CONSIDERED THE FACTS OF THE CASE CAREFULLY. IN DECIDING APPEAL IN THE CASE OF VAPI WASTE & EFFLUENT MANAGEMENT COMPANY LIMITED (VWEMCL), I HAV E HELD THAT THE SAID ENTITY DOES NOT QUALIFY FOR THE CONCEPT OF MUT UALITY AND THEREBY THE PROFITS EARNED BY THE COMPANY IS SUBJECT TO TAX. IN VIEW OF THIS, THE CONTENTION OF THE LD. AR IS REJECTED AND THE ACTION OF THE AO IS CONFIRMED. 10.1. SO FAR AS GROUND NO.2 IS CONCERNED, IN THIS CASE, LD.AR HAS RELIED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE C ASE OF CIT VS. COMMON EFFLUENT TREATMENT PLANT (THANE-BELAPUR) ASSOCIATIO N REPORTED IN (2010) 328 ITR 362 (BOM), WHEREIN BOMBAY HIGH COURT HAS ACCEPT ED THE PRINCIPLE OF MUTUALITY AND SURPLUS INCOME OVER EXPENDITURE ON PR INCIPLE OF MUTUALITY IS NOT CHARGEABLE TO TAX AS WELL AS ALSO CITED A JUDGE MENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SPORTS CLUB OF GUJARAT LTD. VS. CIT REPORTED IN (1987) 171 ITR 504 (GUJ.), WHEREIN HO NBLE GUJARAT HIGH COURT HAS HELD THAT THE SPORTS CLUB IS MUTUAL CONCERN AND PROFIT AND GAIN IS NOT ASSESSABLE AS BUSINESS INCOME. IN VIEW OF THE AFOR ESAID JUDGEMENTS, GROUND NO.2 OF ASSESSEES APPEAL IS ALLOWED. 11. WITH REGARD TO LEGAL & PROFESSIONAL CHARGES OF RS.7,22,275/-, LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE DETAILS OF SUCH EXPENSES FOR WHICH THE LD. AO HAS HELD THAT TAX IS DEDUCTIBLE U/ S 194J WAS NOT PROVIDED THE ASSESSEE. IT IS ALSO CONTENDED THAT THE COPY O F ACCOUNTS FOR THE YEAR ENDED ON 31.03.2009 WAS ALREADY PRODUCED BEFORE THE AO, WHEREIN NO SUCH EXPENSES WAS DEBITED BY THE ASSESSEE DURING THE YEA R. ITA NO. 1791/AHD/2011 GUJARAT THEMIS BIOSYN LTD V. ITO AY : 2009-10 5 12. LD. DR, ON THE OTHER HAND, SUPPORTED THE ORDE RS OF THE LOWER AUTHORITIES. 13. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT LD. CIT(A) CONFIRMED THE ACTION OF THE LD. AO WITH REGARD TO LEGAL & PROFESSIONAL CHARGES, BY FOLLOWING OBSERVATIONS:- 6.4 WITH RESPECT TO LEGAL & PROFESSIONAL CHAR GES OF RS. 7,22,275/-, THE AR OF THE APPELLANT HAS SUBMITTED THAT THE DETAILS O F SUCH EXPENSES FOR WHICH THE LAO HAS HELD THAT TAX IS DEDUCTIBLE U/S. 194I O F THE INCOME TAX ACT HAS NOT BEEN PROVIDED TO THE APPELLANT COMPANY. THE AR P RODUCED THE COPY OF ACCOUNTS FOR THE YEAR ENDED ON 31.03.2009 AND IT IS HUMBLY SUBMITTED THAT NO SUCH EXPENSES HAS BEEN DEBITED BY THE APPELLANT COMPANY DURING THE YEAR. CONSIDERING THE FACTS OF THE CASE, IT IS REQUESTED TO ALLOW THIS GROUND OF APPEAL. HOWEVER, THE AO STATED THAT THE APPELLANT HA D DEBITED LEGAL & PROFESSIONAL CHARGES OF RS. 7,22,275/- FOR WHICH TH E APPELLANT HAD DEDUCTED TDS @ 2.06 % BY APPLYING SEC.194C INSTEAD OF AT THE RATE 10.33% AS PRESCRIBED IN SEC. 194I. IN MY CONSIDERED VIEW, THE ACTION OF THE AO CANNOT BE FAULTED BECAUSE THE PROVISIONS U/S. 194I IS VERY CLEAR TO THIS EFFECT. THUS THIS GROUND OF APPEAL IS DISMISSED. 14. REGARDING THE HIRING EXPENSES OF RS.3,72,192/-, IT WAS CONTENDED THAT THE SAID EXPENDITURE WAS INCURRED AGAINST THE CONTR ACT OF PROVIDING PLASTIC AND TARPAULIN SHEETS ON RENTAL BASIS. IT WAS ALSO ARGUED THAT THESE WERE USED FOR PROTECTING GOODS AND OTHER ITEMS DURING MONSOON SEASON AND SECTION 194I OF THE ACT IS NOT APPLICABLE ON THESE ITEMS. 15. LD. DR, ON THE OTHER HAND, SUPPORTED THE ORDE RS OF THE LOWER AUTHORITIES. 16. HAVING CONSIDERED THE RIVAL CONTENTIONS, PERUSE D THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW, ITA NO. 1791/AHD/2011 GUJARAT THEMIS BIOSYN LTD V. ITO AY : 2009-10 6 WE FIND THAT LD. CIT(A) CONFIRMED THE ACTION OF THE LD. AO, BY FOLLOWING OBSERVATIONS:- 6.5 WITH RESPECT TO HIRING EXPENSES OF RS. 3,7 2,192/-, THE AR SUBMITTED THAT THE SAID AMOUNT WAS INCURRED AGAINST THE CONTR ACT OF PROVIDING PLASTIC/TARPAULIN SHEETS ON RENTAL BASIS SO THAT TH E SAME CAN BE USED FOR PROTECTING GOODS AND OTHER ITEMS FROM MONSOON. THE AR ARGUED THAT THE USE OF PLASTIC SHEET/TARPAULIN IS NOT COVERED UNDER THE PROVISION OF SECTION 194I OF THE ACT. THE APPELLANT COMPANY HAS ALREADY DEDUCT ED AND PAID TDS U/S. 194C OF THE ACT. THE A.O. IN THE ORDER HAS STATED THA T THE APPELLANT HAD AGREED FOR THIS CHARGE OF LEVY TDS AND INTEREST THE REON, THE CONTEST BEFORE THE APPELLATE AUTHORITY BECAME INFRUCTUOUS. THUS THIS G ROUND IS DISMISSED. 17. SO FAR AS GROUND NOS.3 & 4 ARE CONCERNED, THE LD.CIT(A) OBSERVED THAT ASSESSEE INCURRED EFFLUENT TREATMENT EXPENSE S OF RS.8,02,459/- ON WHICH TDS U/S.194C OF THE ACT WAS NOT DEDUCTED/PAID TO GOVERNMENT ACCOUNT. THEREFORE, AO WORKED OUT THE TAX AMOUNT A T THE RATE 2.266% AT RS.18,184/- AND INTEREST OF RS.1,488/- U/S.201(1A) OF THE ACT FOR THE PERIOD FRO 01/07/2008 TO 28/02/2009 AND ASSESSEE HAS ALSO DEBITED LEGAL AND PROFESSIONAL CHARGES OF RS.7,22,275/- ON WHICH TDS U/S.194J IS DEDUCTIBLE @ 10.33%, WHICH WORKED OUT AT RS.74,394/-, WHEREAS AS SESSEE HAS DEDUCTED U/S.194C AND PAID RS.11,613/- ONLY. THUS, ASSESSEE PAID LESS TDS OF RS.62,781/-. THE ASSESSEE HAS ALSO ACCEPTED THE DE FAULT, THE AO RAISED DEMAND OF RS.62,781/- AND INTEREST OF RS.5,016/- U/ S.201(1A) OF THE ACT FOR THE PERIOD FROM 01/07/2008 TO 28/02/2009. THE AO F URTHER OBSERVED THAT THE ASSESSEE HAS DEBITED RENT HIRING EXPENSES OF RS .3,72,192/- ON WHICH TDS U/S.1941 IS DEDUCTIBLE @ 15.45%, WHICH WORKED OUT A T RS.57,503/-, WHEREAS THE ASSESSEE HAS DEDUCTED U/S.194C AND PAID RS.7,66 7/- @ 2.06% ONLY. THUS, ASSESSEE HAS DEDUCTED SHORT TDS OF RS.49,836/ -. THE ASSESSEE HAS ACCEPTED THE DEFAULT, THE AO RAISED DEMAND OF RS.49 ,836/- AND INTEREST OF RS.3,984/- U/S.201(1A) OF THE ACT FOR THE PERIOD F ROM 01/07/2008 TO ITA NO. 1791/AHD/2011 GUJARAT THEMIS BIOSYN LTD V. ITO AY : 2009-10 7 28/02/2009. THE ASSESSEE MADE PAYMENT FOR EFFLUENT TREATMENT EXPENSES TO VAPI WASTE & EFFLUENT MANAGEMENT COMPANY LI8MTIE D (VWEMCL) THAT VWEMCL HAVE PROVIDED AN ORDER DATED 02.04.2003 PASS ED BY THE HONBLE ITAT, SMC BENCH, AHMEDABAD, WHEREIN IT WAS HELD THA T VWEMCL WAS NOT CARRYING ON ANY BUSINESS BY PROVIDING SERVICES TO I TS OWN MEMBERS, ON THE DOCTRINE OF MUTUALITY EMBEDDED THEREIN. THE DOCTRI NE OF MUTUALITY VIS-- VIS INCOME UNDER THE INCOME TAX ACT, IS ALSO BEEN C LARIFIED BY THE HONBLE APEX COURT IN THE CASE OF CHELMSFORD CLUB VS. CIT ( 2000) 109 TAXMAN 215 (SC). THE APPELLANT COMPANY BEING ONCE OF THE MEMB ERS OF VWEMCL, AND HAVING THE DOCTRINE OF MUTUALITY EMBEDDED THEREIN S UCH AMOUNT PAID BY THE ASSESSEE TO THE SAID MUTUAL CONCERN IS NOT COVE RED UNDER THE DEFINITION OF CONTRACT FOR THE PURPOSE OF SEC. 194C OF THE A CT. LD.AR OF THE ASSESSEE SUBMITTED BEFORE THE LD.CIT(A) THAT CONSIDERING THE ABOVE, NO TDS IS DEDUCTIBLE FROM THE AFOREMENTIONED PAYMENT AND MAY BE ALLOWED THIS GROUND OF APPEAL. THE LD.CIT(A) CONSIDERED THE FA CTS OF THE CASE CAREFULLY. IN DECIDING APPEAL IN THE CASE OF VAPI WASTE & EFFL UENT MANAGEMENT COMPANY LTD. (VWEMCL), THE LD.CIT(A) HELD THAT THE SAID ENTITY DOES NOT QUALIFY FOR THE CONCEPT OF MUTUALITY AND THEREBY TH E PROFITS EARNED BY THE COMPANY IS SUBJECT TO TAX. IN VIEW OF THIS, THE CO NTENTION OF THE LD.AR IS REJECTED AND THE ACTION OF THE AO IS CONFIRMED BY T HE LD.CIT(A). THE LD.AR OF THE ASSESSEE FURTHER SUBMITTED IN RESPECT OF INT EREST AND BILL DISCOUNT EXPENSES OF RS.5,05,234/- THAT THE INCOME ON ACCOUN T OF DISCOUNTING OF RECEIVABLE WAS MADE TO UNION BANK OF INDIA, WHICH I S EXCLUDED EITHER AS A BANKING COMPANY TO WHICH THE BANKING REGULATION ACT 1949 APPLIES. THUS, THE PAYMENTS MADE TO THE BANK IS NOT SUBJECT TO SE C. 194A OF THE ACT. THERE IS A FORCE IN THE SUBMISSIONS MADE BY THE LD.AR. S EC. 194A OF THE IT ACT IS NOT APPLICABLE IN THE CASE OF BANKING COMPANY TO WH ICH THE BANKING REGULATION ACT 1949 APPLIES. THUS, THE LD.CIT(A) H ELD THAT THE TAX AND INTEREST LEVIED IN THIS CONNECTION MERITS DELETION AND ALLOWED THE GROUND ITA NO. 1791/AHD/2011 GUJARAT THEMIS BIOSYN LTD V. ITO AY : 2009-10 8 RAISED BY THE ASSESSEE. THE LD.CIT(A) FURTHER HELD WITH RESPECT TO LEGAL AND PROFESSIONAL CHARGES OF RS.7,22,275/- THAT THE AR O F THE ASSESSEE HAS SUBMITTED THAT THE DETAILS OF SUCH EXPENSES FOR WHI CH THE LAO HAS HELD THAT TAX IS DEDUCTIBLE U/S.194J OF THE INCOME TAX ACT HAS NOT BEEN PROVIDED TO THE APPELLANT-COMPANY. THE AR PRODUCED THE COPY OF ACCOUNTS FOR THE YEAR ENDED ON 31/03/2009 AND IT IS HUMBLY SUBMITTED THAT NO SUCH EXPENSES HAS BEEN DEBITED BY THE APPELLANT COMPANY DURING THE YE AR. CONSIDERING THE FACTS OF THE CASE, IT IS REQUESTED TO ALLOW THIS GR OUND OF APPEAL. HOWEVER, THE AO STATED THAT THE APPELLANT HAD DEBITED LEGAL & PROFESSIONAL CHARGES OF RS.7,22,275/- FOR WHICH THE APPELLANT HAD DEDUCT ED TDS @ 2.06% BY APPLYING SEC. 194C INSTEAD OF AT THE RATE 10.33% AS PRESCRIBED IN SEC.194J. THE LD.CIT(A) HELD THAT THE ACTION OF THE AO CANNOT BE FAULTED BECAUSE THE PROVISIONS U/S.194J IS VERY CLEAR TO THIS EFFECT. T HUS ASSESSEES GROUND OF APPEAL IS DISMISSED BY THE LD.CIT(A). THE LD.CIT(A ) HELD WITH RESPECT TO HIRING EXPENSES OF RS.3,72,192/- THAT THE LD.AR OF THE ASSESSEE SUBMITTED THAT THE SAID AMOUNT WAS INCURRED AGAINST THE CONTR ACT OF PROVIDING PLASTIC/TARPAULIN SHEETS ON RENTAL BASIS SO THAT TH E SAME CAN BE USED FOR PROTECTING GOODS AND OTHER ITEMS FROM MONSOON. THE LD.AR OF THE ASSESSEE ARGUED THAT THE USE OF PLASTIC SHEET/TARPAULIN IS N OT COVERED UNDER THE PROVISION OF SECTION 194I OF THE ACT. THE ASSESSEE -COMPANY HAS ALREADY DEDUCTED AND PAID TDS U/S.194C OF THE ACT. THE A.O . IN THE ORDER HAS STATED THAT THE ASSESSEE HAD AGREED FOR THIS CHARGE OF LEVY TDS AND INTEREST THEREON, THE CONTEST BEFORE THE APPELLATE AUTHORITY BECAME INFRUCTUOUS AND THE GROUND RAISED BY THE ASSESSEE WAS DISMISSED BY THE LD.CIT(A). 17.1. IN VIEW OF THE ABOVE, WE DO NOT SEE ANY INF IRMITY IN THE ORDER OF THE LD.CIT(A), BECAUSE THE ASSESSEE ITSELF HAS ACCEPTED ITS DEFAULT. THUS, GROUND NOS.3 & 4 ARE DISMISSED. ITA NO. 1791/AHD/2011 GUJARAT THEMIS BIOSYN LTD V. ITO AY : 2009-10 9 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 19 TH OCTOBER, 2016 AT AHMEDABAD. SD/- SD/- PRAMOD KUMAR (ACCOUNTANT MEMBER) MAHAVIR PRASAD (JUDICIAL MEMBER) AHMEDABAD; DATED 19/10/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION- .. 12.09.2016/13.10.16(DICTATIO N PAD 5 PAGES ATTACHED) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 12.09.2016/13.10.16 OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. - .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 19.10.16 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER