Buildquick Infrastructure Pvt.Ltd., Anand V. The Jt.CIT.,Anand Range, Anand

ITA 1911/AHD/2014

• Counselvise Citation: 191120514 RSA 2014
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 23-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR SR DR
• Section: 194C

Judgement Text

.3 , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER ./ ././ ./ ITA NO. 1911/AHD/2014 / ASSESSMENT YEAR: 2010-11 BUILDQUICK INFRASTRUCTURE PVT LTD 504, SANKALP, OPP. ANAND PEOPLE CO-OP BANK, SARDAR GUNJ, ANAND PAN : AADCB 4069 Q VS. JCIT, ANAND RANGE, ANAND / // / (APPELLANT) !' !' !' !' / // / (RESPONDENT) ASSESSEE(S) BY : SMT. ARTI N. SHAH, AR REVENUE BY : SMT SONIA KUMAR, SR. DR. #$ % &'/ // / DATE OF HEARING : 26/06/2015 () % &' / // / DATE OF PRONOUNCEMENT: 23/07/2015 *+ *+ *+ *+/ // / O R D E R PER G.D. AGRAWAL, VICE PRESIDENT: THIS IS AN APPEAL FILED BY THE ASSESSEE AND IS DIRE CTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEAL S)-IV, BARODA DATED 30.04.2014, PERTAINING TO ASSESSMENT YEAR 2010-11. 2. THE ONLY GROUND RAISED IN THIS APPEAL BY THE ASS ESSEE READS AS UNDER:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-IV , BARODA HAS ERRED IN LAW AS WELL AS ON FACTS OF THE CASE BY CONFIRMIN G DISALLOWANCE OF RS.40,40,328/- U/S 40(A)(IA) OF THE INCOME TAX ACT, 1961 MADE BY THE ASSESSING OFFICER. 3. AT THE TIME OF HEARING BEFORE US, BOTH THE PARTI ES FAIRLY AGREED THAT THE ISSUE RAISED IN THIS APPEAL IS IDENTICAL TO THE ISSUE RAISED BY THE ASSESSEE FOR ASSESSMENT YEAR 2009-10. THEY ALSO STATED THAT THE FACTS OF THE YEAR ITA NO1911/AHD/2014 BUILDQUICK INFRASTRUCTURE PVT LTD VS. JCIT FOR AY 2010-11 2 UNDER CONSIDERATION ARE SIMILAR TO ASSESSMENT YEAR 2009-10 AND THE OUTCOME OF THE APPEAL FOR ASSESSMENT YEAR 2009-10 W OULD BE SQUARELY APPLICABLE TO THE ASSESSMENT YEAR 2010-11. 4. WE HAVE ALREADY CONSIDERED THE ARGUMENTS OF BOTH THE SIDES WHILE DECIDING THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009-10 VIDE ITA NO.2878/AHD/2012, WHEREIN WE UPHELD THE DISALLOWANC E WITH THE FOLLOWING FINDINGS:- 8. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF B OTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. SECTION 19 4C READS AS UNDER:- 194C. (1) ANY PERSON RESPONSIBLE FOR PAYING ANY SU M TO ANY RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE CONTR ACTOR) FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING O UT ANY WORK) IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND A SPECIFIED PERSON SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACC OUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISS UE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO (I) ONE PER CENT WHERE THE PAYMENT IS BEING MADE O R CREDIT IS BEING GIVEN TO AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY; (II) TWO PER CENT WHERE THE PAYMENT IS BEING MADE O R CREDIT IS BEING GIVEN TO A PERSON OTHER THAN AN INDIVIDUAL OR A HIN DU UNDIVIDED FAMILY, OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THERE IN. [ (2) WHERE ANY SUM REFERRED TO IN SUB-SECTION (1) IS CREDITED TO ANY ACCOUNT, WHETHER CALLED 'SUSPENSE ACCOUNT' OR BY AN Y OTHER NAME, IN THE BOOKS OF ACCOUNT OF THE PERSON LIABLE TO PAY SU CH INCOME, SUCH CREDITING SHALL BE DEEMED TO BE CREDIT OF SUCH INCO ME TO THE ACCOUNT OF THE PAYEE AND THE PROVISIONS OF THIS SECTION SHALL APPLY ACCORDINGLY. (3) WHERE ANY SUM IS PAID OR CREDITED FOR CARRYING OUT ANY WORK MENTIONED IN SUB-CLAUSE (E) OF CLAUSE (IV) OF THE E XPLANATION, TAX SHALL BE DEDUCTED AT SOURCE (I) ON THE INVOICE VALUE EXCLUDING THE VALUE OF MA TERIAL, IF SUCH VALUE IS MENTIONED SEPARATELY IN THE INVOICE; OR ITA NO1911/AHD/2014 BUILDQUICK INFRASTRUCTURE PVT LTD VS. JCIT FOR AY 2010-11 3 (II) ON THE WHOLE OF THE INVOICE VALUE, IF THE VALU E OF MATERIAL IS NOT MENTIONED SEPARATELY IN THE INVOICE. (4) NO INDIVIDUAL OR HINDU UNDIVIDED FAMILY SHALL B E LIABLE TO DEDUCT INCOME-TAX ON THE SUM CREDITED OR PAID TO THE ACCOU NT OF THE CONTRACTOR WHERE SUCH SUM IS CREDITED OR PAID EXCLUSIVELY FOR PERSONAL PURPOSES OF SUCH INDIVIDUAL OR ANY MEMBER OF HINDU UNDIVIDED FA MILY. (5) NO DEDUCTION SHALL BE MADE FROM THE AMOUNT OF A NY SUM CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID TO THE ACCOUN T OF, OR TO, THE CONTRACTOR, IF SUCH SUM DOES NOT EXCEED THIRTY THOU SAND RUPEES : FROM THE ABOVE, IT IS EVIDENT THAT SECTION 194C IS APPLICABLE EVEN IN RESPECT OF CONTRACT FOR SUPPLY OF LABOUR FOR CARRYI NG OUT ANY WORK. IT IS NOT IN DISPUTE THAT THE ASSESSEE MADE PAYMENT OF RS.48,64, 187/- TO 14 PERSONS IN RESPECT OF LABOUR CHARGES. AS PER ASSESSEE, THOSE P ERSONS WERE SUPERVISORS TO WHOM THE PAYMENT WAS MADE COLLECTIVELY FOR ALL THE LABOURERS WORKED UNDER HIM. AS PER REVENUE, THE 14 PERSONS WERE THE LABOU R CONTRACTORS WHO SUPPLIED THE LABOURERS TO THE ASSESSEE. LET US EXAM INE THE FACTS OF THE CASE SO AS TO ASCERTAIN WHETHER THE PERSONS TO WHOM THE PAYMEN T WAS MADE WERE LABOUR CONTRACTORS WHO SUPPLIED THE LABOURERS OR WERE ONLY LABOUR SUPERVISORS. WE FIND THAT IN THE PAPER-BOOK THE ASSESSEE HAS GIVEN THE BILLS/VOUCHERS ISSUED BY THOSE 14 PERSONS. AT PAGE NO.24, THERE IS A VOUCHE R FOR LABOUR PAYMENT MADE TO AVINASH SONI. IT WOULD BE APPROPRIATE TO REPROD UCE THE WHOLE VOUCHER WHICH IS AS UNDER:- BIPL F/PRJ/07A ABSTRACT PROJECT - M.P. RESORT DATE 30/05/2008 SUB CONTRACTOR AVINASH SONI BILL NO. 7 WORK :- UNSKILLED CIVIL WORK SHEET NO. 1 PERIOD :- 16/04/2008 TO 03/06/2008 ITEM NO. DESCRIPTION UNIT RATE PREVIOUS QTY PREVIOUS BILL AMOUNT THIS BILL QTY UPTO DATE QTY UPTO DATE AMOUNT RS. 1 DEPARTMENTAL UN-SKILLED LABOUR SUPPLY MD 100 3848.44 384,844 1,633.25 5,481.69 548,169 2 DEPARTMENTAL SKILLED LABOUR SUPPLY-MASON MD 200 1332.367 266,473 95.50 1,427.87 285,573 ITA NO1911/AHD/2014 BUILDQUICK INFRASTRUCTURE PVT LTD VS. JCIT FOR AY 2010-11 4 3 TRAVELLING ALLOWANCE FOR LABOUR 0 8,000 - - 8,000 4 SALARY 2500 6 15,000 1.00 7.00 17,500 5 EXTRA 10% RATE ON WORK DONE BETWEEN 15/3/2008 TO 15/4/2008 8,680 8,680 TOTAL 682,997 867,922 LESS-UPTO DATE AMOUNT OF PREVIOUS BILL 682,997 (A) TOTAL AMOUNT FOR THIS BILL 184,925 NOTE : - UP TO DATE 28/05/2008 TOTAL PAID AMOUNT RS .749550/- SD/- SD/- SD/- PREPARED BY SUB-CONTRACTOR SITE INCHARGE NOTE :- SECURITY DEPOSIT. ADVANCE & INCOME TAX WILL BE DEDUCTED AT H.O. 9. FROM THE ABOVE, IT IS EVIDENT THAT IN THE BILL /VOUCHER, AVINASH SONI TO WHOM THE PAYMENT IS MADE IS DESIGNATED AS SUB-CONT RACTOR. IN THE DESCRIPTION OF WORK, IT IS CLEARLY MENTIONED AS UN -SKILLED/SKILLED LABOUR SUPPLY. THE LABOUR SUPPLIER CHARGED RS.100/- PER MD (MAN DAYS) IN RESPECT OF UN-SKILLED LABOUR SUPPLIED BY HIM AND RS .200/- PER MD IN RESPECT OF SKILLED LABOUR SUPPLIED BY HIM. THERE IS MENTION OF PREVIOUS BILLS, TOTAL BILL UP TO THE PRESENT BILL, TOTAL AMOUNT PAYABLE TILL DATE (RS.8,67,922/-), TOTAL AMOUNT UP TO PREVIOUS BILL (RS.6,82,997) AND BILL AMOUNT OF THE PRESENT BILL (RS.1,84,925/)-. THE TOTAL PAYMENT MADE UP TO 28.05 .2008 (RS.7,49,550/-) IS ALSO MENTIONED. AFTER THE PERUSAL OF THE ABOVE BIL L/VOUCHER, THERE REMAINS NO DOUBT IN OUR MIND THAT THE PAYMENT MADE TO AVINASH SONI WAS FOR SUPPLY OF LABOURER BY HIM. THIS WAS NOT THE PAYMENT TO A LAB OUR SUPERVISOR FOR AND ON BEHALF OF THE LABOURERS WORKED UNDER HIM. THE PAYM ENT IS MADE TO AVINASH SONI FOR LABOURERS SUPPLIED BY HIM. SIMILAR IS TH E POSITION OF OTHER BILLS/VOUCHERS ISSUED BY OTHER LABOUR SUPPLIERS. ON THESE FACTS, THE DECISIONS RELIED UPON BY THE LD. COUNSEL WOULD NOT BE APPLICA BLE. IN THE CASE OF KARNATAKA RURAL INFRASTRUCTURE DEVELOPMENT LTD (SUP RA), ADMITTEDLY, THE PAYMENT WAS MADE TO THE GROUP LEADER WHO IN TURN DI SBURSED THE AMOUNT TO HIS CO-EMPLOYEES. THE RELEVANT FACTS, AS NOTED BY THEIR LORDSHIPS OF THE KARNATAKA HIGH COURT AT PAGE NO.225 OF (2015) 370 I TR READS AS UNDER:- 5. FROM THE AFORESAID FACTS AND RIVAL CONTENTIONS IT IS CLEAR THAT THE ASSESSEE IS A STATE GOVERNMENT UNDERTAKING. THEY TA KE UP RURAL DEVELOPMENTAL CONSTRUCTION WORKS DIRECTLY BY ELIMIN ATING MIDDLEMEN LIKE CONTRACTORS AND SUB-CONTRACTORS TO AVOID EXPLO ITATION OF THE RURAL POOR, THEREBY PASSING ON THE FULL WORTH OF MONEY TO THE PEOPLE. THE MATERIAL ON RECORD DISCLOSES THAT THE CORPORATION T RANSFERS THE AMOUNT ITA NO1911/AHD/2014 BUILDQUICK INFRASTRUCTURE PVT LTD VS. JCIT FOR AY 2010-11 5 EARMARKED FOR SAID PROJECTS TO THE ACCOUNT OF THE E NGINEER WHO IS IN CHARGE OF THE SUCH PROJECT, WHO IS ALSO AN EMPLOYEE OF THE ASSESSEE- COMPANY. THE SAID ENGINEER AT THE SPOT ENGAGES THE SERVICES OF THE WORKERS. PROBABLY, HE CANNOT GO IN SEARCH OF EMPLOY EES, THE RESPONSIBILITY IS GIVEN TO A PERSON WHO BRINGS THE LABOUR FORCE, WHO IS CALLED AS A GROUP LEADER. HE IS ALSO ONE AMONG THE WORKERS WHO IS ENGAGED IN EXECUTING THE WORKS. THE PAYMENT IS MADE TO THE GROUP LEADER, IN TURN WHO DISBURSES THE AMOUNT TO HIS CO- EMPLOYEES. THUS, THE FACTS BEFORE THE HONBLE KARNATAKA HIGH COURT WERE ALTOGETHER DIFFERENT THAN THE FACTS IN THE CASE UND ER APPEAL BEFORE US. IN THE SAID CASE, ADMITTEDLY, THERE WAS NO CONTRACTOR OR S UB-CONTRACTOR, BUT THE LABOURERS WERE DIRECTLY EMPLOYED BY THE ASSESSEE AN D THE PAYMENT WAS MADE TO THE GROUP LEADER FOR AND ON BEHALF OF HIS CO-EMPLOY EES AND HE IN TURN DISTRIBUTED THE AMOUNT TO HIS CO-EMPLOYEES. THE FAC TS ARE ALTOGETHER DIFFERENT IN THE APPEAL BEFORE US. IN THE APPEAL BEFORE US, THE 14 PERSONS SUPPLIED MAN- POWER TO THE ASSESSEE AND THEY ISSUED THE BILL FOR SUPPLY OF SKILLED/UN-SKILLED MAN-POWER FOR WHICH PAYMENT IS MADE TO THEM. THUS, THE PAYMENTS TO THE 14 PERSONS WERE MADE IN THE CAPACITY OF LABOUR CONTRAC TOR AND NOT FOR AND ON BEHALF OF OTHER LABOURERS. SIMILARLY, THE FACTS I N THE CASE OF TULSI RAM MODI (SUPRA), BEFORE THE JAIPUR TRIBUNAL, WERE DIFFERENT . IN THE AFORESAID CASE, THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF SALES OF AL UMINIUM SECTIONS/PROFILES/PROFILES GLASS SHEETS, WOODEN/GYP SUM BOARDS, ETC. FOR THE PURPOSE OF INSTALLATION AND FITTINGS OF SUCH MATERI AL AT CUSTOMERS PREMISES, CASUAL LABOURERS WERE EMPLOYED. THE ASSESSING OFFI CER OF THE OPINION THAT THE ASSESSEE BECAME THE CONTRACTOR FOR INSTALLATION AND FITTINGS OF SUCH MATERIAL AND THE CASUAL WORKERS BECAME SUB-CONTRACTORS AND T HEREFORE, THE ASSESSEE WAS LIABLE TO DEDUCT THE TAX AT SOURCE. IN OUR OPINION, THE FACTS OF THE PRESENT CASE ARE ALTOGETHER DIFFERENT THAN THE FACTS OF THE JAIP UR BENCH IN THE CASE OF TULSI RAM MODI (SUPRA). SIMILARLY, THE FACTS IN THE CASE OF LAXMI PROTEIN PRODUCTS P. LTD (SUPRA) BEFORE THE AHMEDABAD BENCH OF THE ITAT WERE ALSO DIFFERENT. IN THE AFORESAID CASE, IT WAS UNDISPUTED THAT THE PAYM ENT WAS MADE TO THE LABOUR SUPERVISOR FOR AN ON BEHALF OF THE OTHER WORKERS. THE RELEVANT FINDINGS OF THE ITAT READ AS UNDER:- [[ WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THROU GH THE FACTS AND CIRCUMSTANCES OF THE CASE. AS WE HAVE NOTED ABOVE T HAT THE ASSESSEE HAS FILED COMPLETE DETAILS VIDE LETTER DATED MAY 8, 200 7 AND IT IS NOTED THAT THE ASSESSEE INSTEAD MADE PAYMENTS TO LABOURERS RAT HER THE ASSESSEE HAS MADE PAYMENT TO THE REPRESENTATIVE OF THE LABOURERS THROUGH THEIR MUKADUM, WHO ARE EMPLOYEES OF THE ASSESSEE. THE IND IVIDUAL PAYMENT IS NOT EXCEEDING THE PRESCRIBED LIMIT AND ONCE THIS IS NOT THE CASE, THE ASSESSEE IS NOT SUPPOSED TO DEDUCT TAX UNDER SECTIO N 194C OF THE ACT. ACCORDINGLY, THIS ISSUE OF THE REVENUES APPEAL IS DISMISSED. ITA NO1911/AHD/2014 BUILDQUICK INFRASTRUCTURE PVT LTD VS. JCIT FOR AY 2010-11 6 10. AS WE HAVE ALREADY NOTED, THE FACTS IN THE CASE OF THE ASSESSEE ARE ALTOGETHER DIFFERENT. HERE THE 14 PERSONS SUPPLIED THE LABOURERS TO THE ASSESSEE ISSUED BILLS/VOUCHERS IN RESPECT OF LABOURERS SUPPL IED ON THE BASIS OF MAN-DAYS AND CHARGED SEPARATELY FOR SKILLED LABOUR SUPPLY AN D FOR UN-SKILLED LABOUR SUPPLY. AGAINST THOSE BILLS, PAYMENT IS MADE TO TH OSE 14 PERSONS FROM TIME TO TIME AND SOME PAYMENT IS OUTSTANDING WHICH IS SHOWN IN THE BALANCE-SHEET OF THE ASSESSEE. FROM THESE FACTS AND THE BILLS/VOUCH ERS ISSUED BY THE 14 PERSONS, IT IS EVIDENT THAT IT IS A CASE OF CONTRACT FOR SUP PLY OF LABOURER AND THEREFORE, SECTION 194C WAS SQUARELY APPLICABLE. SINCE THE AS SESSEE FAILED TO DEDUCT THE TAX AT SOURCE, IN OUR OPINION, THE ASSESSING OFFICE R RIGHTLY DISALLOWED THE LABOUR CHARGES PAID TO THE LABOUR CONTRACTORS BY IN VOKING THE PROVISIONS OF SECTION 40(A)(IA). ACCORDINGLY, THE ASSESSEES APP EAL IS DISMISSED. 5. SINCE BOTH THE PARTIES AGREED THAT THE FACTS OF THE YEAR UNDER CONSIDERATION ARE IDENTICAL TO ASSESSMENT YEAR 2009 -10, FOR THE DETAILED DISCUSSION ABOVE, WE FIND NO JUSTIFICATION TO INTER FERE WITH THE ORDER OF THE CIT(A) AND THE SAME IS SUSTAINED. 6. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 23 RD JULY, 2015 AT AHMEDABAD. SD/- SD/- (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER (G.D. AGRAWAL) VICE-PRESIDENT AHMEDABAD; DATED 23/07/2015 BIJU T., PS *+ % !&, -*,& *+ % !&, -*,& *+ % !&, -*,& *+ % !&, -*,&/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. & #. / CONCERNED CIT 4. #. ( ) / THE CIT(A) 5. ,12 !& , , / DR, ITAT, AHMEDABAD 6. 2 4$ / GUARD FILE . *+# *+# *+# *+# / BY ORDER, TRUE COPY 5 55 5/ // / 6 6 6 6 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD