Nayagarh District Central Co-operative Bank Ltd., Nayagarh V. ACIT, Bhubaneswar

ITA 183/CTK/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7596 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 20-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUVENDU DUTTA
• Assessee Lawyers: PRAFULLA KUMAR SAHOO
• Keywords: Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N. S SAINI, ACCOUNTANT MEMBER ITA NO S . 183 & 184 /CTK/2015 ASSESSMENT YEARS : 2010 - 11 & 2011 - 12 NAYAGARH DIST. CENTRAL CO.OP.BANK LTD.,, NAYAGARH. VS. DCIT, CIRCLE 2(2), BHUBANESWAR. PAN/GIR NO. (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI PRAFULLA KUMAR SAHOO REVENUE BY : SHRI SUVENDU DUTTA , DR DATE OF HEARING : 20 /10 / 2016 DATE OF PRONOUNCEMENT : 20 /10 / 2016 O R D E R THESE ARE APPEALS FILED BY THE ASSESSEE AGAINST SEPARATE ORDER S OF CIT(A) - 2, BHUBANESWAR , BOTH DATED 30.1.2015 , FOR THE ASSESSMENT YEAR S 2010 - 11 & 2011 - 12, RESPECTIVELY . 2. THE COMMON ISSUE INVOLVED IN BOTH THE APPEALS IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER DISALLOWING DEDUCTION OF RS.2,34,297/ - UNDER TH E HEAD COMMISSION IN A.Y. 2010 - 2011 AND RS.2,70,375/ - UNDER THE HEAD COMMISSION IN A.Y. 2011 - 12 FOR NON - 2 ITA NOS.183 & 184/CTK/2015 ASSESSMENT YEARS:2010 - 11 & 2011 - 12 DEDUCTION OF TDS U/S.194H OF THE ACT BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA ) OF THE ACT. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE, DURING THE YEARS, IS CARRYING ON BANKING BUSINESS IN THE RURAL AREAS, WHERE UNEMPLOYED PERSON S FROM THAT AREA ARE UTILIZED FOR COLLECTION OF DAILY DEPOSITS AND THEY ARE PAID CERTAIN PERCENTAGE OF COLLECTION AS REMUNERATION. THEIR INCOMES ARE BELOW THE TAXABLE LIMITS. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE COMMISSION PAID WAS LIABLE TO TDS U/S.194H OF THE ACT AND AS THE ASSESS EE FAILED TO DEDUCT TDS THEREON FOR PAYMENTS OF RS.2,34,297/ - IN A.Y. 2010 - 11 AND RS.2,70,375/ - IN A.Y. 2011 - 12, THEREFORE, HE DISAL LOWED THE DEDUCTION CLAIMED BY THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 40(A )(IA) OF THE ACT. 4. ON APPEAL BEFORE THE LD CIT(A), THE ASSESSEE RELIED ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VICTOR SHIPPING SERVICES PVT LTD., (2013) 357 ITR 642 (ALL), WHEREIN, IT HAS BEEN HELD THAT FOR DISALLOWING EXPENSES FROM BUSINESS AND PROFESSION ON THE GROUND THAT TAX HAS NOT BEEN DEDUCTED AT SOURCE, THE AMOUNT SHOULD BE PAYABLE AND NOT IT HAS BEEN PAID BY THE END OF THE YEAR . THE TRIBUNAL HAD NOT COMMITTED ANY ERROR IN RECORDING A FINDING OF FACT AND NO QUESTION OF LAW AROSE FOR 3 ITA NOS.183 & 184/CTK/2015 ASSESSMENT YEARS:2010 - 11 & 2011 - 12 CONSIDERATION IN THE MATTER. HE ALSO SUBMITTED THAT THAT TH E SLP FILED AGAINST THE DECISION OF HONBLE ALLAHABAD HIGH COURT HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT VIDE JUDGMENT DATED 2.7.2014 IN CC NO.(S) 8068/2014. HE SUBMITTED THAT AS THERE WAS NO AMOUNT OUTSTANDING AND PAYABLE AS AT THE END OF THE YEAR UNDER THE HEAD COMMISSION, THEREFORE, NO DISALLOWANCE COULD BE MADE IN THE HANDS OF THE ASSESSEE IN VIEW OF THE DECISION OF THE HONBLE ALLAHAB AD HIGH COURT IN THE CASE OF VICTOR SHIPPING SERVICES (P) LTD (SUPRA). 5. LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER OBSERVING THAT FOR DEDUCTION OF TDS U/S.194H, BOTH THE AMOUNT PAYABLE AT THE END OF THE YEAR AND THE AMOUNT PAID ARE TO BE CON SIDERED. 6. AT THE TIME OF HEARING, LD A.R. OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. 7. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 8. I FIND THAT IT IS NOT IN DISPUTE THAT THE ASSESSEE MADE PA YMENTS OF COMMISSION TO PERSONS EMPLOYED FOR COLLECTION OF DAILY DEPOSITS IN THE RURAL AREAS. IT IS ALSO NOT IN DISPUTE THAT NO AMOUNT ON ACCOUNT OF COMMISSION WAS OUTSTANDING AND PAYABLE AT THE END OF THE YEAR. THEREFORE, NO DISALLOWANCE COULD BE MADE BY INVOKING PROVISIONS OF SECTION 40(A)(IA) OF THE ACT FOR NON - DEDUCTION OF TDS FROM THE COMMISSION PAID BY THE ASSESSEE 4 ITA NOS.183 & 184/CTK/2015 ASSESSMENT YEARS:2010 - 11 & 2011 - 12 IN VIEW OF THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF VICTOR SHIPPING SERVICES (P) LTD., (SUPRA) . THEREFORE, RESPECTFULLY FOLLOWING THE SAID DECISION, I DELETE THE DISALLOWANCE OF RS.RS.2,34,297 FOR A.Y. 2010 - 2011 & RS.2,70,375/ - FOR A.Y. 2011 - 12 AND ALLOW GROUNDS OF APPEAL FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION. 9. IN THE RESULT, BOTH TH E APPEAL S FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 20 /10 /2016 IN THE PRESENCE OF PARTIES. SD/ - ( N. S SAINI ) A CCOUNTANT MEMBER CUTTACK; DATED 20 /10 /2016 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK 1. THE APPELLANT : NAYAGARH DIST. CENTRAL CO.OP.BANK LTD.,, NAYAGARH 2. THE RESPONDENT :DCIT, CIRCLE 2(2), BHUBANESWAR. 3. THE CIT(A) - 2 , BHUBANESWAR. 4. CIT , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//