Dinesh Patel, Kolkata V. ITO, Ward - 34(32), Kolkata, Kolkata

ITA 1917/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48190 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2011
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 03-02-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 11-10-2010
• Court: TRIBUNAL
• Department Lawyers: V A RAJU LD
• Assessee Lawyers: MANISH TIWARI LD AR
• Keywords: TDS; Set aside

Judgement Text

ITA NO.1917/KOL/2010 (SMC-C-MVS) 1 , SMC( C ) IN THE INCOME TAX APPELLATE TRIBUNAL, SMC ( C ) BENCH: KOLKATA BEFORE HONBLE SRI MAHAVIR SINGH, JM () , / I.T.A NO 1917/KOL/2010 !' / ASSESSMENT YEAR : 2006-07 DINESH PATEL VS. INCOME-TAX OFFICER, PAN:AFSPP4076L WARD 34(3), KOLKATA ($% /APPELLANT ) (&'$%/ RESPONDENT ) $% / FOR THE APPELLANT : : ( / SHRI MANISH TIWARI, LD.AR &'$% / FOR THE RESPONDENT : ( / SHRI V.A RAJU, LD DR )* / ORDER , SHRI MAHAVIR SINGH, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE O RDER OF CIT(A)-XX, KOLKATA IN APPEAL NO.114/CIT(A)-XX/WD-34(3)/08-09/K OL VIDE DATED 30 TH JULY 2010. THE ASSESSMENT WAS FRAMED BY THE ITO, WARD 34(3), KOLKATA FOR THE AY 2006-07 U/S.143(3) OF THE INCOME TAX ACT, 1961 (HER EINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 03-09-2008. 2. THE FIRST ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE OF INTEREST PAID ON LOA N TO SMT. RAMABEN A.PATEL AND SHRI HARDIK PATEL MADE BY THE AO DURING THE ASSESSM ENT PROCEEDINGS.. FOR THIS ASSESSEE HAS RAISED THE FOLLOWING GROUND:- 1. THE ASSESSEE HAS PAID INTEREST ON LOAN TO HIS O WN MOTHER SMT. A.PATEL, WHO IS A SENIOR CITIZEN. THE TOTAL INCOME OF SMT. RAMABEN A.PATEL IS BELOW THE EXEMPTED LIMIT OF RS.1,85,000 /- AND HENCE THE ASSESSEE DID NOT DEDUCT ANY TDS ON INTEREST PAID T O SMT. RAMABEN A.PATEL AMOUNTING TO RS.89,804/-. ITA NO.1917/KOL/2010 (SMC-C-MVS) 2 FURTHER THE ASSESSEE HAS ALSO PAID INTEREST OF RS.2 2,416/- TO HARDIK PATEL. THE TOTAL INCOME OF HARDIK PATEL FOR A.Y 200 6-07 WAS RS.99,770/- WHICH IS BELOW BASIC EXEMPTION LIMIT AND THEREFORE NO TDS WAS DEDUCTED ON PAYMENT OF INTEREST. THEREFORE, THE ADDITION MADE BY AO AMOUNTING TO RS. 1,12,220/- SHALL BE DELETED. 3. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT AO DISALLOWED INTEREST PAID TO SMT.RAMABEN A.PATEL AMOUNTING TO RS.89,804/ - AND SHRI HARDIK PATEL AMOUNTING TO RS.22,416/- AS THE ASSESSEE FAILED TO DEDUCT TAX AT SOURCE [TDS] ON INTEREST PAID, THE CIT(A) ALSO CONFIRMED THE ACTI ON OF THE AO. 4. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE STATE D THAT SMT.RAMABEN A.PATEL AND SHRI HARDIK PATEL FILED COPIES OF FORM NO.15H & 15G WITH CIT(A), WHICH WERE ALREADY FILED BEFORE THE CIT ON 31-03-2006. H OWEVER, ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE THESE WERE NOT FILED BEFOR E THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. BUT THESE WERE FILED BEFORE THE CIT(A) DURING APPELLATE PROCEEDINGS. 5. WE FIND THAT THE CIT(A) HAS RECORDED A CLEAR FI NDING THAT COPIES OF FORM NO. 15H & 15G FROM THESE CREDITORS WERE SUBMITTED. NOW, AUTHENTICITY REGARDING FILING OF THESE FORMS BEFORE CIT, KOLKATA ON 31-03- 2006 IS TO BE VERIFIED. IN CASE THESE ARE FILED, BEFORE CIT ON OR BEFORE 31-3-06 AS CLAIMED BY THE ASSESSEE, ADDITION IS NOT TO BE MADE. HENCE, THIS ISSUE IS S ET ASIDE TO THE FILE OF THE AO FOR VERIFICATION AND ALLOWED FOR STATISTICAL PURPOSE. 6. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE I S AGAINST THE ORDER OF THE CIT(A) CONFIRMING DISALLOWANCE OF FREIGHT PAID TO M/S. VISHAL TRANSPORT CO. ITA NO.1917/KOL/2010 (SMC-C-MVS) 3 AMOUNTING TO RS.1,74,799/- AND M/S. BALANGIR TRUCK OWNERS ASSOCIATION AMOUNTING TO RS.62,610/-. FOR THIS ASSESSEE HAS RAI SED FOLLOWING GROUND:- 2. THE ASSESSEE IS A DEALER OF BIRI LEAVES AND TO BACCO. THE ENTIRE PURCHASE OF BIRI LEAVES/TOBACCO IS FROM ORISSA FORE ST DEVELOPMENT CORPORATION LTD. THE ASSESSEE HAS PURCHASED THE BI RI LEAVES/TOBACCO ON DIFFERENT DATES AND TOTAL GOODS W AS RECEIVED IN TRUCK FROM DIFFERENT TRANSPORTER. THE ASSESSEE HAS PAID FREIGHT IN CASH TO M/S. VISHAL TRANSPORT CO. AMOUNTING TO RS.1 ,74,799/- AND M/S. BALANGIR TRUCK OWNERS ASSOCIATION AMOUNTING TO RS.62,610/- DURING THE RELEVANT ASST. YEAR. THESE TWO TRUCK OWN ERS DO NOT HAVE ANY BANK ACCOUNT IN KOLKATA. THE ASSESSEE DO NOT HA VE ANY OPTION BUT TO PAY FREIGHT IN CASH. FURTHER THESE TWO TRUC K DRIVERS SHALL NOT ALLOW TO UNLOAD THE GOODS UNTIL CASH PAYMENT IS MAD E TO THEM. M/S. VISHAL TRANSPORT CO HAS RECEIVED RS.1,74,799/- IN T RANSPORTATION OF 14 NOS. OF TRUCKS. SIMILARLY M/S. BALANGIR TRUCK O WNERS ASSOCIATION HAS RECEIVED RS.62,610/- IN TRANSPORTAT ION OF 3 TRUCKS. THEREFORE THE ADDITION MADE BY AO AMOUNTING TO RS.2 ,37,409/- SHALL BE DELETED. 7. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE STAT ED THAT THE ASSESSEE AN INDIVIDUAL, ENTERED INTO CONTRACT WITH M/S. VISHAL TRANSPORT CO AND M/S. BALANGIR TRUCK OWNERS ASSOCIATION FOR TRANSPORT OF BIDI LEAVES AND TOBACCO, AS HE IS DEALING IN BIDI AND TOBACCO. THE LD. COUNSEL FOR TH E ASSESSEE STATED THAT M/S. VISHAL TRANSPORT CO. AND M/S. BALANGIR TRUCK OWNERS ASSOCI ATION ARE INDIVIDUALS TO WHOM THESE PAYMENTS ARE MADE, HENCE, PROVISIONS OF SECTION 194C(1) WILL NOT APPLY TO THE PRESENT CASE. ON QUERY FROM THE BENCH LD SR DR STATED THAT IT IS NOT CLEAR WHETHER M/S. VISHAL TRANSPORT CO. AND M/S. BA LANGIR TRUCK OWNERS ASSOCIATION ARE INDIVIDUAL OR IN ANY OTHER STATUS, AS THE CASE MAY BE. THIS FACT IS NOT EMANATING OUT OF THE ORDERS OF LOWER AUTHORITIE S, WHETHER THE PARTIES ARE INDIVIDUALS OR NOT, HENCE IS TO BE VERIFIED. IN CAS E THESE PARTIES ARE ASSESSED IN THE STATUS OF INDIVIDUAL, NO DISALLOWANCE IS TO BE MADE , AS THE ASSESSEE IN THE PRESENT ITA NO.1917/KOL/2010 (SMC-C-MVS) 4 YEAR IS NOT LIABLE TO DEDUCT TDS AS PER THE PROVISI ONS OF THE ACT. IN CASE THESE PARTIES ARE ASSESSED IN ANY OTHER STATUS, THEN CERT AINLY DISALLOWANCE IS TO BE MADE AS THE ASSESSEE WILL BE LIABLE TO DEDUCT TAX. ACCORDIN GLY, THIS ISSUE OF THE ASSESSEE IS ALSO SET ASIDE TO THE FILE OF THE AO WITH THE DIREC TION TO ENQUIRE ABOUT THE STATUS OF M/S. VISHAL TRANSPORT CO. AND M/S. BALANGIR TRUCK O WNERS ASSOCIATION AND DECIDE THE ISSUE. THIS ISSUE OF THE ASSESSEE IS SET ASIDE TO THE FILE OF THE AO AND ALLOWED FOR STATISTICAL PURPOSE. 8. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSE. )* +,) - , . / 0+ 14-06-2011 ORDER PRONOUNCED IN THE OPEN COURT ON 14-06-2011 SD/- [ , ] MAHAVIR SINGH JUDICIAL MEMBER (0+) DATED :14-06-2011 *PP 12 34 5 /SR.P.S. )* 6 &7 8)7!9- COPY OF THE ORDER FORWARDED TO: 1. $% /APPELLANT- DINESH PATEL C/O N,AMRATLAL & CO. 23 ARMENIAN ST., KOL-1. 2 &'$% / RESPONDENT : I.T.O WARD 34(3) 18 RABINDRA SARANI , KOL. 3. */ THE CIT, 4. * ()/ THE CIT(A), KOLKATA. 5. A. &/ DR, KOLKATA BENCHES, KOLKATA '7 &/ TRUE COPY , )*,/ BY ORDER , 4 /ASSTT. REGISTRAR