ITO, Jaipur V. M/S THE SOLUTIONS, Jaipur

ITA 192/JPR/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7769 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 01-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: R C SHAH
• Section: 40A(3)

Judgement Text

ITA NO. 192//JP/2011 ITO VS. M/S. THE SOLUTIONS 1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 192/JP/2012 ASSESSMENT YEARS : 2008-09 PAN : AAEFT 8243 F THE ITO VS. M/S. THE SOLUTIONS WARD- 6 (2) 77, DEVIPATH, TAKHTE SHAHI ROAD JAIPUR JAIPUR (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI D.C. SHARMA ASSESSEE BY : SHRI R.C. SHAH DATE OF HEARING: 14-08-2014 DATE OF PRONOUNCEMENT: 05-09-2014 ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER OF THE LD. CIT(A)- II JAIPUR DATED 01-12-2011 FOR THE ASSE SSMENT YEAR 2008-09 WHEREIN THE REVENUE HAS RAISED FOLLOWING GROUND S:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN:- (I) DELETING ADDITION OF RS. 2,41,14,570/-MADE BY A O BY WAY OF DISALLOWANCE U/S 40A(3) ON ACCOUNT OF CA SH PAYMENT TO THE AGENTS WITHOUT APPRECIATING THAT THERE WAS N O REQUIREMENT BY AGENT TO PAY THE PAYMENT IN CASH AND AS SUCH THE MATTER IS NOT COVERED WITHIN THE EXCEPTION PROVIDED U/R 6DD(K ). ITA NO. 192//JP/2011 ITO VS. M/S. THE SOLUTIONS 2 (II) HOLDING THAT PAYMENTS WERE MADE TO AGENTS WITHOUT APPRECIATING THAT THE ASSESSEE COULD NOT ES TABLISH THAT THE RECIPIENTS OF CASH WAS WORKING AS ITS AGENT. 2.1 DURING THE COURSE OF HEARING, THE LD. DR RELIED ON THE ORDER OF THE AO ON THE ABOVE GROUNDS. 2.2 DURING THE COURSE OF HEARING THE LD. AR FOR TH E ASSESSEE CONTENDS THAT THE ISSUE IN QUESTION IS SQUARELY COVERED BY THE DE CISION OF ITAT VIDE ITS ORDER DATED 13-04-2011 IN ITA NO.962/JP/2010 FOR A. Y. 2007-08 WHEREIN THE ITAT BY CONSIDERING THE SAME ISSUE ABOUT THE A LLEGED CASH PAYMENTS OF PURCHASE OF PETROL/DIESEL HELD THAT PROVISIONS OF S ECTION 40A(3) ARE NOT APPLICABLE TO THE ASSESSEES CASE BY FOLLOWING OBSE RVATIONS:- 8. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED THEM CAREFULLY. AFTER CONSIDERING THE SUBMISSIONS AND P ERUSING MATERIAL ON RECORD, WE FIND THAT ASSESSEE HAS APPOINTED VARIOUS REPRESENTATIVE/AGENTS FOR VARIOUS LOCATIONS WHO PUR CHASE DIESEL/PETROL FROM NEAREST PETROL PUMP AND ARRANGE FOR SUPPLY TO VARIOUS LOCATIONS OF DIESEL GENERATING SETS. THERE ARE 110 LOCATIONS . THE PETROL PUMP ASKED FOR PAYMENT IN CASH AS THE ASSESSEE IS NOT KN OWN TO THEM AND ASSESSEE CANNOT OPEN OFFICE OR BRANCHES AT EVERY LO CATION. IT HAS TO OBTAIN SERVICES OF REPRESENTATIVES AGENTS. IT IS F URTHER SEEN THAT THESE PAYMENTS ARE NOT MADE IN CASH TO THE AGENTS BUT THE AMOUNT HAS BEEN DEPOSITED IN THEIR BANK ACCOUNT AT A BRANCH AT JAIP UR AND IN THESE TIMES OF E-BANKING PAYMENT CAN BE DRAWN BY THE AGEN TS OUT OF THEIR BANK ACCOUNT. THEREAFTER WITHDRAWING FROM THEIR BA NK ACCOUNT THE PAYMENT HAS BEEN MADE TO THE PETROL PUMPS. SINCE T HE ASSESSEE IS AWARDED WORK BY IDEA CELLULAR CO. AND HAS TO APPOIN T AGENTS FOR BUYING PETROL OR DIESEL TO FILL IN THE RESPECTIVE G ENERATING SETS WHERE THE TOWER IS INSTALLED AND ELECTRICITY IF REQUIRED. RULE 6DD(K) PROVIDES WHERE THE PAYMENT IS MADE BY ANY PERSON TO HIS AGENT WHO IS REQUIRED TO MAKE PAYMENT IN CASH FOR GOODS OR SERVI CES ON BEHALF OF ITA NO. 192//JP/2011 ITO VS. M/S. THE SOLUTIONS 3 SUCH PERSON, THE ASSESSEES CASE FALLS UNDER THE EX CEPTION CLAUSE OF RULE 6DD(K) AS ASSESSEE MADE THE PAYMENT TO THE BAN K ACCOUNT OF THE AGENTS WHO WAS REQUIRED TO MAKE PAYMENT IN CASH FOR BUYING THE PETROL OR DIESEL AT DIFFERENT LOCATIONS. THEREFORE , WE SEE NO INFIRMITY IN THE FINDING OF LD.CIT(A) WHO FOLLOWING THE PROVI SIONS OF EXCEPTION CLAUSE OF RULE 6DD(K) HAS ALLOWED THE APPEAL OF THE ASSESSEE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE CONFIRM TH E ORDER OF LD.CIT(A) AND DISMISS THE APPEAL OF THE DEPARTMENT. 9. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMI SSED. 2.3 THE LD. CIT(A) WHILE ALLOWING THE RELIEF TO THE ASSESSEE HAS FOLLOWED THE ITAT ORDER (SUPRA). THE LD. CIT(A) VIDE PARA 4 AT PAGE 7 HAS FURTHER HELD THAT THERE IS NO MATERIAL CHANGE IN THE FACTS AND CIRCUM STANCES OF THE YEAR UNDER REFERENCE . HE FURTHER PLACED RELIANCE ON THE DECISIONS OF HO NBLE DELHI TRIBUNAL IN THE CASE OF DCIT VS HINDI INDUSTR IES LTD. (120 ITD 89) AND HONBLE BANGALORE TRIBUNAL IN THE CASE OF SRI R ENUKESHWARA RICE MILLS VS ITO (93 ITD 263). 2.4 THE LD. AR FURTHER PLEADS THAT THERE BEING NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE ASSESSEE BETWEEN A.Y. 2007-08 AND THE ASSESSMENT YEAR IN QUESTION I.E. 2008-09. THE LD.C IT(A) HAS ALLOWED THE RELIEF TO THE ASSESSEE FOLLOWING THE ITAT JUDGEMENT (SUPRA). THUS THERE IS NO INFIRMITY IN THE ORDER OF LD. CIT(A). LD.D.R. DID NOT DISPUTE TO THE FACTS AS THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES O F BOTH THESE YEARS. ITA NO. 192//JP/2011 ITO VS. M/S. THE SOLUTIONS 4 2.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BY RESPECTFULLY FOLLOWING THE ITAT JUDGEMENT (SUPRA) IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 200 7-08, WE UPHOLD THE ORDER OF LD. CIT(A). THUS THE GROUNDS OF APPEAL RA ISED BY THE REVENUE ARE DISMISSED. 3.0 IN THE RESULT, APPEAL OF THE REVENUE IS DISMIS SED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 05 -09-2014 SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 05 TH SEP. 2014 *MISHRA COPY FORWARDED TO:- 1. THE ITO, WARD- 6(1), JAIPUR 2. M/S. THE SOLUTIONS, JAIPUR 3. THE LD. CIT 4. THE LD. CIT(A), JAIPUR BY ORDER 5..THE LD. DR 6.THE GUARD FILE (IT NO. 192/JP/2012) AR ITAT, JAIPUR ITA NO. 192//JP/2011 ITO VS. M/S. THE SOLUTIONS 5 ITA NO. 192//JP/2011 ITO VS. M/S. THE SOLUTIONS 6 ITA NO. 192//JP/2011 ITO VS. M/S. THE SOLUTIONS 7