APPOLLO CONSTRUCTION CO., Hooghly V. I.T.O Wd - 1(1),Hooghly., Kolkata

ITA 1791/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78287 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 05-12-2012
• Court: TRIBUNAL
• Department Lawyers: VIKASH KUMAR AGARWAL
• Section: 143(3); 194C

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 1791/KOL/2012 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2007-08 APOLLO CONSTRUCTION CO. VS. INCOME-TAX OFFICER, WD-1(1), HOOGHLY (PAN:AAJFA2617C) (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 09.04.2014 DATE OF PRONOUNCEMENT: 09.04.2014 FOR THE APPELLANT: SHRI SOMNATH GHOSH, ADVOCATE FOR THE RESPONDENT: SHRI VIKASH KUMAR AGARWAL, J CIT, SR. DR $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXXVI, KOLKATA IN APPEAL NO. 759/CIT(A)-XXXVI/KOL/WD.-1(1),HG/2009-10 DATED 24.09.2012. ASSESSMENT WAS FRAMED BY ITO, WARD-1(1), HOOGHLY U/S. 143(3) OF TH E INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEARS 2007 -08 VIDE HIS ORDER DATED 30.11.2009. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AS REGARDS TO DISALLOWANCE OF LABOUR CHARGES TO THE EXTENT OF RS.1,73,810/- FOR NON-DEDU CTION OF TDS U/S. 194C(1) READ WITH SECTION 40(A)(IA) OF THE ACT. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM CARRYING ON THE BUSINESS OF CIVIL CONSTRUCTION. DURING THE RELEVANT ASSESSMENT YEAR 2007-08, ASSESSEE INCURRED LABOUR CHARGES FOR THE SUM OF RS.10,13,840/-. THE AO MADE DISALLOWANCE OF LABOUR CHARGES FOR NON- DEDUCTION OF TDS U/S. 194C(1) OF THE ACT INVOKING T HE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO DELETED THE DISALLOWANCE TO THE EXTENT OF RS.8,40,030/- RELYING ON THE DECISION OF SPECIAL BENCH OF THIS ITAT VISHAKAPATNAM 2 ITA NO.1791/K/2012 APOLLO CONSTRUCTION CO. AY:2007-08 BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORTS VS. ACIT (2012) 136 ITD 23 (SB) BUT RESTRICTED THE ADDITION AT RS.1,73,810/-. AGGRIEVE D, ASSESSEE PREFERRED APPEAL BEFORE TRIBUNAL. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SHRI SO MNATH GHOSH STATED THAT THIS ACCOUNT DETAILS OF 26 LABOURERS WERE SUBMITTED BEFORE THE AO AS WEL L AS BEFORE CIT(A) DEPICTING THAT NOT A SINGLE PAYMENT TO THE ABOVE LABOURERS EXCEEDS RS.20 ,000/- AT ONE GO OR RS.50,000/- ANNUALLY WERE MADE. FOR THIS, LD. COUNSEL FOR THE ASSESSEE ARGUED THAT IT IS IMPERATIVE TO REFER TO THE STATUTORY PROVISIONS CONTAINED IN THE FIRST PROVISO TO SECTION 194C(3) OF THE ACT, WHICH REQUIRES THAT NO DEDUCTION UNDER THE PROVISIONS OF SECTION 1 94C(1) OF THE ACT THEREOF SHALL BE MADE WHERE THE AGGREGATE OF THE SUM PAID OR CREDITED OR LIKELY TO BE CREDITED DURING THE RELEVANT PREVIOUS YEAR DOES NOT EXCEED RS.50,000/-. LD. COU NSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE RELEVANT PROVISION OF SECTION 194C(3)(I) FIRST PROVISO, WHICH READS AS UNDER: (3) NO DEDUCTION SHALL BE MADE UNDER SUB-SECTION ( 1) OR SUB-SECTION (2 FROM (I) THE AMOUNT OF ANY SUM CREDITED OR PAID OR LIKELY T O BE CREDITED OR PAID TO THE ACCOUNT OF, OR TO, THE CONTRACTOR OR SUB-CONTRACTOR , IF SUCH SUM DOES NOT EXCEED TWENTY THOUSAND RUPEES; PROVIDED THAT WHERE THE AGGREGATE OF THE AMOUNTS OF SUCH SUMS CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE FI NANCIAL YEAR EXCEEDS FIFTY THOUSAND RUPEES, THE PERSON RESPONSIBLE FOR PAYING SUCH SUMS REFERRED TO IN SUB-SECTION (1) OR, AS THE CASE MAY BE, SUB-SECTION (2) SHALL BE LIABLE TO DEDUCT INCOME-TAX UNDER THIS SECTION: IN VIEW OF THIS, LD. COUNSEL FOR THE ASSESSEE STATE D THAT THERE IS NO REQUIREMENT AT ALL FOR DEDUCTION OF TDS BECAUSE IN VIEW OF THE DETAILS FIL ED IN ASSESSEES PAPER BOOK AT PAGES 36 AND 37 (WHICH WERE AVAILABLE BEFORE THE AO DURING THE C OURSE OF ASSESSMENT PROCEDINGS AS WELL AS BEFORE CITA) DURING APPELLATE PROCEEDINGS) THAT PAY MENT TO INDIVIDUAL LABOUR DURING THE YEAR HAS NOT EXCEEDED RS.50,000/-. THERE IS NO REQUIREM ENT TO DEDUCT TDS FOR THE ASSESSEE ON THESE LABOUR PAYMENTS. ONCE THIS IS THE POSITION, PROVIS IONS OF SECTION 40(A)(IA) OF THE ACT CANNOT BE INVOKED. FROM THE ABOVE PROVISIONS OF SECTION 194C (3)(I) AND FIRST PROVISO TO THIS CLAUSE CLEARLY STATES THAT NO DEDUCTION U/S. 194C(1) OF TH E ACT SHALL BE MADE WHERE THE AGGREGATE OF THE SUM PAID OR CREDITED OR LIKELY TO BE CREDITED ( LABOUR CHARGES) DURING THE RELEVANT PREVIOUS YEAR DOES NOT EXCEED RS.50,000/-. IN SUCH A SITUAT ION, THE ASSESSEE IS NOT REQUIRED TO DEDUCT TDS AND ONCE THE ASSESSEE IS NOT REQUIRED TO DEDUCT TDS, THE DISALLOWANCE MADE BY AO AND 3 ITA NO.1791/K/2012 APOLLO CONSTRUCTION CO. AY:2007-08 CONFIRMED BY CIT(A) BY INVOKING THE PROVISIONS OF S ECTION 40(A)(IA) OF THE ACT IS UNWARRANTED AND WE DELETE THE SAME. APPEAL OF ASSESSEE IS ALLO WED. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 6. ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 9 TH APRIL, 2014 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT- APOLLO CONSTRUCTION CO., C/O, SHRI SOMN ATH GHOSH, ADVOCATE SEVEN BROTHERS LODGE, CHINSURAH, DIST. HO OGHLY, PIN 712 105 2 ./,- / RESPONDENT ITO, WARD-1(1), HOOGHLY. 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .