The ITO, Ward-5(2), Baroda V. Smt. Bhaminiben J.Gandhi, Baroda

ITA 1808/AHD/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63186 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-10-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 29-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA
• Assessee Lawyers: ANIL R SHAH
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO. 1808/AHD/2009 ASSESSMENT YEARS :2005-06 INCOME TAX OFFICER, WARD-5(2), 5 TH FLOOR, AAYAKAR BHAVAN, KARELLIBAU, BARODA. V/S . SMT. BHAMINIBEN J. GANDHI PROP: SULABH CONSTRUCTION, 33/B, NAGESHWAR SOCIETY, B/H. SHOPPING CENTRE, VIP ROAD, BARODA PAN NO. A B YPG8709K (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI Y. P. VERMA, SR. DR /BY RESPONDENT SHRI ANIL R. SHAH, A.R. /DATE OF HEARING 15.10.2012 /DATE OF PRONOUNCEMENT 07.12.2012 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WHIC H HAS EMANATED FROM THE ORDER OF CIT(A)-V, BARODA, ORDER DATED 13. 03.2009 FOR A.Y. 2005-06. THE SOLE GROUND OF APPEAL AGAINST DELETING THE ADDI TION BY THE CIT(A) OF RS.34,66,904/- U/S. 40(A)(IA) OF I T ACT. ITA NO. 1808/AHD/09 A.Y. 05-06 PAGE 2 2. THE FACTUAL MATRIX OF THE CASE IS THAT THE ASSES SEE IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION OF CANAL, ROAD, BRID GE AND BUILDING CONSTRUCTION OF GOVERNMENT, SEMI GOVERNMENT AND PRIVATE PARTIES. THE ASSESSEE HAD CLAIMED PAYMENT FOR TRANSPORTATION AND EARTH WORK A T RS.34,66,904/-. AS PER A.O., THESE EXPENSES WERE CLAIMED WITHOUT DEDUCTION OF T.D.S. BEING HAVING NATURE OF CONTRACTUAL PAYMENT. THUS, HE MADE ADDIT ION OF RS.34,66,904/- U/S. 40(A)(IA) OF I.T. ACT. 3. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE CARRIED THE MATTER BEFORE CIT(A) WHO HAD DELETED THE ADDITION B Y OBSERVING AS UNDER: 4.2 I HAVE GONE THROUGH THE FACTS OF THE CASE, ARG UMENTS ADVANCED BY THE AR AS ALSO THE OBSERVATION OF THE AO. IT IS SUBMITTED BY THE AR THAT THE APPELLANT IS A ROAD LAYING CONTRACTOR AND TRANSPORTATION CHARGES INCLUDE THE COST OF MATERIAL ALSO AND AS SUCH THE T RANSPORTATION CHARGES ARE NEGLIGIBLE AND BELOW THE THRESHOLD LIMIT FOR DE DUCTION OF TAX AT SOURCE. THE DETAILS PRODUCED IN THIS CONTEXT ARE P LACED ON THE RECORD. IT IS ALSO A FACT THAT FOR THE NEXT ASSESSMENT YEAR 2006-07, THE AO AFTER APPRECIATING THE METHOD OF ACCOUNTING FOLLOWED BY T HE APPELLANT, I.E., BILLS FOR BOTH MATERIAL AND TRANSPORTATION CHARGES TOGETHER HAS NOT SUBJECTED SUCH EXPENDITURE FOR ADDITION AS THE TRAN SPORTATION CHARGES WERE NEGLIGIBLE AND BELOW FOR THRESHOLD LIMIT FOR T DS. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AO IS NOT JUSTIFIED IN MAKING THE ADDITION U/S 40(A)(IA) AND ACCORDINGLY HE IS DI RECTED TO DELETE THE SAME. THUS, THIS GROUND OF APPEAL IS ALLOWED. ITA NO. 1808/AHD/09 A.Y. 05-06 PAGE 3 4. NOW THE REVENUE IS BEFORE US. THE LD. SR. D.R. VEHEMENTLY ARGUED THAT THE ASSESSEE HAD MADE PAYMENT TO TRUCK OWNERS AND N ATURE OF PAYMENT WAS CONTRACTUAL. THUS, HE REQUESTED TO REVERSE THE ORD ER OF CIT(A). AT THE OUTSET, THE LD. COUNSEL FOR THE APPELLANT HAS RELIED UPON T HE ORDER OF CIT(A) AND HAS DRAWN OUR ATTENTION ON PAPER BOOK TO SHOW THE NATUR E OF PAYMENT. HE ARGUED THAT THE ASSESSEE HAD BEEN SUPPLIED THE MATERIAL WI TH TRANSPORT. THE MAJOR BILL WAS FOR MATERIAL WHICH WAS SUPPLIED AT PROJECT . THUS, TRANSPORT COST HAD BEEN INCLUDED BY THE SUPPLIER WHICH IS NOT SEPARABL E. THUS, THE ASSESSEE HAD NOT DEDUCTED T.D.S. ON IT. HE ALSO RELIED UPON IN CASE OF PRASHANT H. SHAH V. ASSTT. CIT (2012) 21 TAXMANN.COM 263 (AHMADABAD T RIB.), WHEREIN AN IDENTICAL ISSUE THE HONBLE ITAT, AHMADABAD IN ABOV E CASE HAS HELD THAT NO T.D.S. U/S.40 (A) (IA) IS REQUIRED AS PAYMENT TO TR ANSPORTERS FOR BUILDING CONSTRUCTION MATERIAL, WITH SMALL AMOUNT OF TRANSPO RT CHARGES. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI AL ON RECORD. THE PAYMENTS WERE MADE TO SUPPLIER OF BRICKS, SAND WHIC H INCLUDES THE TRANSPORT CHARGES BUT MAJOR PAYMENTS WERE FOR MATERIAL SUPPLI ED. AS CO-ORDINATE BENCH IN CASE OF PRASHANT H. SHAH (SUPRA) HAS HELD THAT NO T.D.S. IS DEDUCTED U/S. 194C(2) ON SUCH PAYMENTS WHICH CAN NO T BE DISALLOWED U/S. 40(A)(IA) OF IT ACT. WE HAVE CONSIDERED VIEW THAT THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS U/S. 194C IN VIEW OF THE NAT URE OF TRANSACTION. THUS, WE DISMISS THE REVENUES APPEAL. ITA NO. 1808/AHD/09 A.Y. 05-06 PAGE 4 6. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . THESE ORDERS PRONOUNCED IN OPEN COURT ON 07.12.2012 SD/- SD/- ( MUKUL KR. SHRAWAT ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ; STRENGTHEN PREPARATION & DELIVERY OF ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION H.W. PAPER OF MEMBER ON 05.12.2012 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE XXX 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 05.12.2012 4) DATE OF CORRECTION XXX 5) DATE OF FURTHER CORRECTION XXX 6) DATE OF INITIAL SIGN BY MEMBERS 07.12.2012 7) ORDER UPLOADED ON ,, ,, 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE NO 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 07.12.2012