ACIT, Pune V. Shri Avdhoot Sarvottam Kulkarni, Pune

ITA 1850/PUN/2012

• Counselvise Citation: 185024514 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 20-09-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1850/PN/2012 (A.Y. 2008-09) DY. CIT, CIRCLE-3, PUNE APPELLANT VS. SHRI AVDHOOT SARVOTTAM KULKARNI PROP. MARKETING MULTIPLIERS 1206/B-1, BUTE PATIL CHAMBERS, J.M. ROAD, PUNE - 411004 PAN: ABEPK3975H RESPONDENT CO NO.60/PN/2013 (ARISING OUT OF ITA NO.1850/PN/2012) (A.Y. 2008-09) SHRI AVDHOOT SARVOTTAM KULKARNI PROP. MARKETING MULTIPLIERS 1206/B-1, BUTE PATIL CHAMBERS, J.M. ROAD, PUNE - 411004 PAN: ABEPK3975H CROSS OBJECTOR VS. DY. CIT, CIRCLE-3, PUNE APPELLANT ASSESSEE BY : SHRI M.K. KU LKARNI DEPARTMENT BY : SHRI S.P. WALIMBE DATE OF HEARING : 09.01.2014 DATE OF ORDER : 21.01.2014 ORDER 2 PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL FILED BY REVENUE AND CROSS OBJECTION FI LED BY ASSESSEE ARE ARISING FROM THE ORDER OF CIT(A)-II, P UNE DATED 24-05- 2012 FOR THE A.Y. 2008-09, SO BOTH ARE BEING DISPOS ED OFF TOGETHER. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS IN ITS APPEAL. 2. IN ITA NO.1850/PN/2012, THE REVENUE RAISED THE F OLLOWING GROUNDS: 1. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE U /S.40(A)(IA) AMOUNTING TO RS.20,05,830/- BY HOLDING THAT SUCH DISALLOWANCE APPLIES ONLY TO AMOUNTS PAYABLE AS O N 31 ST MARCH AND NOT TO AMOUNTS ALREADY PAID DURING THE YE AR? 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY OR ALL THE GROUNDS OF APPEAL. 3. IN CROSS OBJECTION, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE MAINL Y RELYING ON THE SPECIAL BENCH JUDGMENT IN THE CASE OF MERILYN S HIPPING AND TRANSPORT V. ADDL. CIT (2012) 70 DTR 81 (SB) (V ISHAKHA) AND DELETED THE ADDITION MADE U/S 40(A)(I-A) OF THE ACT AND IN THE PROCESS THE MERITS OF THE CASE WERE NOT CONSIDE RED. THE APPLICABILITY OF S.194C(2) IS NOT CONSIDERED SINCE THERE IS NO CONTRACT OF WHATSOEVER KIND WITH THE LABOUR FOR PAY MENT OF LOADING AND UNLOADING CHARGES AS THE WORK AS ENTRUS TED TO ONE ALSO IS AVAILABLE ON THE SITE. WITH A VIEW TO CONSI DER THIS ASPECT AND IN THE INTEREST OF JUSTICE THE ORDER OF THE CIT(A) BE RESTORED TO HIS FILE. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE ASSESSEE SUBMITS IN THE ABSENCE OF ANY CONTRACT WIT H THE LABOUR THE PROVISIONS OF S.194C(2) BECOME INAPPLICA BLE AND ASSESSEE IS UNDER NO OBLIGATION TO DEDUCT ANY TAX F ROM THE PAYMENTS MADE TO SUCH LABOUR FOR LOADING AND UNLOAD ING. SINCE THIS POINT WAS NOT CONSIDERED THE ASSESSEE BE GIVEN AN OPPORTUNITY TO PLACE HIS CASE PROPERLY BEFORE THE 1 ST APPELLATE AUTHORITY. IT BE HELD ACCORDINGLY. 3 3) THE APPELLANT CRAVES TO LEAVE, ADD/AMEND OR ALTER A NY OF THE ABOVE GROUNDS OF APPEAL. 4. AT THE OUTSET OF HEARING, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE CIT(A) HAS ALLOWED THE APPEAL ON RELYING ON SPECIAL BENCH DECISION IN THE CASE OF MERILYN SHIPP ING AND TRANSPORTS VS. ADDL. CIT (2012) 70 DTR 81 (VISAKHA) (SB)(TRIBUNAL) AND DELETED THE ADDITION MADE U/S.40(A)(IA) OF I.T. ACT. IN THIS PROCESS THE MERITS OF THE CASE WERE NOT CONSIDERED. THE APPLICABILITY OF SECTION 194C(2) WAS NOT CONSIDERED SINCE THERE W AS NO CONTRACT WHATSOEVER KIND WITH LABOUR FOR PAYMENT OF LOADING AND UNLOADING CHARGES AS WORK HAS ENTRUSTED TO ONE ALSO IS AVAILA BLE ON THE SITE. WITH A VIEW TO CONSIDER THIS ASPECT AND IN THE INTE REST OF JUSTICE THE ORDER OF THE CIT(A) BE RESTORED TO HIM. THE LEARNE D AUTHORIZED REPRESENTATIVE HAS ALSO SUBMITTED THAT IN THE ABSEN CE OF CONTRACT WITH LABOUR, THE PROVISIONS OF SEC.194C(2) BECOME I NAPPLICABLE AND THE ASSESSEE IS UNDER NO OBLIGATION TO DEDUCT ANY T AX FROM PAYMENT MADE TO SUCH LABOUR FOR LOADING AND UNLOADING. SIN CE THIS LEGAL ASPECT WAS NOT CONSIDERED, THE ASSESSEE SHOULD BE G IVEN AN OPPORTUNITY TO PLACE HIS CASE PROPERLY BEFORE THE F IRST APPELLATE AUTHORITY. IT WAS ALSO POINTED OUT THAT THE ASSESS EE HAS ALSO RAISED AN ADDITIONAL GROUND BEFORE THE CIT(A) AND THE SAME WAS NOT ADJUDICATED, WHICH IS READ AS UNDER: THE ADDITIONAL GROUND OF APPEAL : [BEFORE CIT(A)] (WITHOUT PREJUDICE TO EACH OTHER) 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THAT ONLY WHEN CLAIM OF ASSESSEE FOR DEDUCTION IS UNDER SS. 32 TO 38, PROVISIONS OF S. 40 (A)(I-A) CAN BE P RESSED INTO SERVICE TO DISALLOW SUCH CLAIMS OF DEDUCTION. THE FACTS OF THE CASE SHOW THAT THE EXPENDITURE DISALLOWED IS COVERE D BY SS. 28 AND 29 OF THE ACT. THE DISALLOWANCE MADE INVOKING T HE PROVISIONS OF S. 40 (A)(I-A) IS BAD IN LAW AND WITH OUT JURISDICTION. THE DISALLOWANCE BE DELETED. 4 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE RELIANCE IS PLACED FOR THE PROPOSITION ON HON'BLE I .T.A.T. DELHI BENCH DECISION IN THE CASE OF I.T.O. WARD 1 (2) VS. AHAAR CONSUMER PRODUCTS (P.) LTD. (2011) 10 TAXMANN .COM 181 (DELHI- ITAT). SINCE THIS IS LEGAL ISSUE AND HENCE THIS ADDITIONAL GROUND OF APPEAL. 3) THE APPELLANT CRAVES LEAVE TO ADD/AMEND OR ALTER ANY OF THE ABOVE GROUNDS OF APPEAL. SO, REQUESTED TO SET ASIDE THE ORDER OF CIT(A). 5. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPR ESENTATIVE COULD NOT DISPUTE THE FACT THAT THE APPEAL HAS SIMP LY BEEN DECIDED ON THE BASIS OF SPECIAL BENCH DECISION IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS (SUPRA) AND ISSUE AT MERIT RAISED BY THE ASSESSEE WAS NOT ADDRESSED. 6. IN VIEW OF ABOVE DISCUSSION, WE FIND THAT CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE WHILE RELYING THE RATIO OF S PECIAL BENCH IN MERILYN SHIPPING AND TRANSPORTS, BUT IT IS A FACT T HAT THE APPLICABILITY OF SECTION 194C(2) HAS NOT BEEN CONSI DERED AS CONTESTED BY THE ASSESSEE BEFORE FIRST APPELLATE AUTHORITY. THE ASSESSEE WAS NOT GIVEN ANY OPPORTUNITY TO ESTABLISH HIS CASE ON MERIT AS RAISED BY HIM. EVEN THE ISSUE RAISED BY THE ASSESSEE BY WAY OF AN ADDITIONAL GROUND BEFORE THE CIT(A) IS NOT FINDING PLACE IN TH E ORDER OF CIT(A) WHICH IS NOT JUSTIFIED. IN VIEW OF ABOVE, WE ARE O F THE VIEW THAT THE ABOVE ISSUES RAISED ON BEHALF OF THE ASSESSEE NEEDS TO BE RE- ADDRESSED TO DECIDE THE ISSUE ON MERIT WHILE RATIO OF MERILYN SHIPPING AND TRANSPORTS (SUPRA) HAS BEEN REVERSED B Y THE HONBLE CALCUTTA AND GUJARAT HIGH COURTS. IN THE INTEREST OF JUSTICE AND IN VIEW OF ABOVE DISCUSSION, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER TO HIM WITH A DIRECTION TO DECIDE THE SA ME AS PER FACT AND LAW AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO B OTH THE PARTIES. AS A RESULT THE APPEAL FILED BY THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. SINCE WE ARE RESTORING THE ISSUE ON TECH NICAL ISSUE RAISED 5 BY WAY OF CROSS OBJECTION AS DISCUSSED ABOVE, WE AR E REFRAINING TO COMMENT ON THE MERIT OF THE ISSUE AT HAND. THIS TA KES CARE OF ISSUE RAISED BY WAY OF CROSS OBJECTION. 7. IN THE RESULT, THE REVENUES APPEAL AS WELL AS C ROSS OBJECTION BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS THE 21 ST DAY OF JANUARY, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 21 ST JANUARY, 2014 GCVSR COPY TO:- 1. DEPARTMENT 2. ASSESSEE 3. THE CIT(A)-II, PUNE 4. THE CIT-II, PUNE 5. THE DR, B BENCH, I.T.A.T., PUNE. 6. GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE