ACIT, CIR-8, Nagpur V. M/S S. B. ENGINEERING ASSOCIATES, Nagpur

ITA 181/NAG/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93425 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 01-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Assessee Lawyers: JAGJEET SINGH BHATTI

Judgement Text

1 ITA NO. 181/NAG/2013 IN THE INC OME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 18 1/NAG/2013 ASSESSMENT YEAR : 200 9 - 10. ASSTT. COMMISSIONER OF INCOME - TAX, M/S S.B. ENGINEERING ASSOCIATES, CIRCLE - 8, NAGPUR. V/S. BLOCK BG/7, WING A SAMRU, AMRAVATI ROAD, CIVIL LINES, NAGPUR. PAN ABHFS3410Q (APPELLANT) RESPONDEN T. APPELLANT BY : SHRI A.R. NINAWE. RESPONDENT BY : SHRI JAGJEET SINGH BHATTI. DATE OF HEARING : 22 - 05 - 2015 DATE OF PRONOUNCEMENT : 30 TH JUNE, 2015. O R D E R PER SHRI SHAMIN YAHYA, A.M . THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - II, NAGPUR DATED 07 - 02 - 2013 AND PERTAINS TO ASSESSMENT YEAR 2009 - 10. THE GROUND OF APPEAL READS AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN DELETING THE DISALLOWANCE OF ` .57,24,000/ - FOR SHORT PAYMENT OF TDS. 2 ITA NO. 181/NAG/2013 2. IN THIS CASE THE ASSESSEE IS ENGAGED IN CIVIL CONTRACT WORK. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD MADE PAYMENT TO ONE OF ITS PARTNERS SHRI MANINDERSISNGH BHASIS AMOUNTING TO ` .57,24,000/ - TOWARDS HIRE OF VARIOUS MACHINES LIKE JCB, L & T , PC ETC. IT WAS FURTHER NOTED THAT THE ASSESSEE HAD MADE TDS IN RESPECT OF SAID PAYMENTS @ 1.13% WHICH IS THE APPLICABLE RATE FO R PAYMENTS MADE TO SUBCONTRACTORS. AFTER ANALYSIS OF THE NATURE OF PAYMENT THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE SAID PAYMENTS WERE TOWARDS HIRE CHARGES FOR MACHINERY AND THE APPLICABLE RATE ON THE SAME WOULD BE 2% AS PER THE SECTION 194I. CONSIDERING THE SAID FACTS THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT SINCE THE TDS HAD NOT BEEN DEDUCTED BY THE APPELLANT ON THE PAYMENT MADE TO SHRI MANINDERSISNGH BHASIN AT THE RATE SPECIFIED IN CHAPTER XVII - B, THE ENTIRE PAYMENT AMOUNTING TO ` .57,24,000/ - MADE WAS DISALLOWABLE U/S 40(A)(IA) OF THE ACT. 2. BEFORE THE LEARNED CIT(APPEALS) , ASSESSEE SUBMITTED THAT PROCEEDINGS UNDER SECTION 40(A)(IA) CAN BE INVOKED IN THE EVENT OF NON DEDUCTION OF TAX AND NOT FOR DEDUCTION OF TAX AT LOWER RATE. I N THIS REGARD THE ASSESSEE PLACED RELIANCE UPON THE FOLLOWING CASE LAWS: I) DCIT V/S. M/S S.K. TEKRIWAL (2011) . II) DCIT V/S. M/S CHANDABHOY. 3. AFTER CONSIDERING THE FACTS OF THE CASE AND THE CASE LAWS CITED, THE LEARNED CIT(APPEALS) FOUND THAT THE FAC TS OF THIS CASE ARE SIMILAR TO THE FACTS OF THE CASE CITED BY THE LEARNED COUNSEL OF THE ASSESSEE BEFORE HIM. ACCORDINGLY, THE LEARNED CIT(APPEALS) DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION MADE OF ` .57,24,000/ - ON ACCOUNT OF DISALLOWANCE UNDER SECTION 40(A)(IA). 3 ITA NO. 181/NAG/2013 4. AGAINST THE ABOVE ORDER OF THE LEARNED CIT(APPEALS), THE REVENUE HAS FILED THIS APPEAL BEFORE US. 5. HAVING HEARD BOTH THE COUNSEL AND PERUSING THE RECORDS, WE FIND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE AFORESAID TWO DECISIONS OF THE TRIBUNAL. IN BOTH THE DECISIONS IT WAS HELD THAT THE PROVISIONS OF SECTION 40(A)(IA) ARE APPLICABLE ONLY IN THE EVENT OF NON DEDUCTION OF TAX AND NOT FOR LESSER DEDUCTION OF TAX. NO CONTRARY DECISION HAS BEEN PRODUCED BEFORE US. WE FU RTHER FIND THAT HONBLE APEX COURT IN THE CASE OF HONDA COAL POWER PRODUCTS LTD. IN CIVIL APPEAL 5412 OF 2007 HAS HELD THAT NON CONSIDERATION OF A COORDINATE BENCH DECISION CAN RENDER A DECISION OF THE TRIBUNAL LIABLE TO BE RECTIFIED FOR MISTAKE APPARENT F ROM RECORD. ACCORDINGLY FOLLOWING THE AFORESAID PRECEDENTS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(APPEALS). ACCORDINGLY, WE UPHOLD THE SAME. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDE R PRONOUNCED ON THIS 30 TH DAY OF JUNE, 2015. SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 30 TH JUNE, 2015. 4 ITA NO. 181/NAG/2013 COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, NAGPUR WAKODE