ITO (TDS) 3(5), MUMBAI V. VINOD KHANNA, NAVI MUMBAI

ITA 2017/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3606 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 02-04-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 12-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH MEENA
• Keywords: Additional evidence
• Section: 194C; 201(1)

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL , F BENCHE MUMBAI . . , / / , . . SHRI I.P. BANSAL, JM AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.2017/MUM/2010 ASSESSMENT YEAR -2004-05 THE I.T.O (TDS) RANGE -3 (5), 10 TH FLOOR, ROOM NO. 1008, SMT K.G.MITTAL AYURVEDIC HOSPITAL BUILDING CHARNI ROAD (W) MUMBAI- 400020 VS M/S VINOD KHANNA F-E-2, 404, SECTOR 16, PALM BEACH ROAD, MORAJ RESIDENCY, SANPADA EAST, NAVI MUMBAI. PAN-AADPK0221C (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI OM PRAKASH MEENA RESPONDENT BY : SHRI VINOD KHANNA DATE OF HEARING : 08-04-2013 DATE OF PRONOUNCEMENT : 08-04-2013 PER RAJENDRA, A.M. CHALLENGING THE ORDER DT. 30.12.2009 OF THE CIT(A)- 14 MUMBAI, ASSESSING OFFICER (AO) HAS FILED FOLLOWING GROUNDS OF APPEAL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD.CIT(A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE WITHOUT RECORDING ANY REASONS FOR ADMITTING EVIDENCE, AS REQUIRED IN RULE 46A(2) OF THE I.T. RULES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN NOT CONSIDERING WHETHER RULE 46A(1) WHICH PRESCRIBES PR EREQUISITE CONDITIONS FOR ADMITTING ADDITIONAL EVIDENCE, SATISFIED OR NOT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E IN LAW, THE LD. CIT(A) ERRED IN NOT FOLLOWING RULE 46A(3) OF THE I.T. RULES OF GIVING R EASONABLE OPPORTUNITY TO THE A.O. BEFORE ADMITTING THE ADDITIONAL EVIDENCE. FACTS OF THE CASE:- 1. ASSESSEE, AN INDIVIDUAL PROPRIETOR OF M/S ANJALI LOGISTIC, FILED ITS RETURN OF INCOME ON 31.10.2007. DURING THE ASSESSMENT PROCEEDINGS AO F OUND THAT ASSESSEE HAD FAILED TO DEDUCT TAX AT SOURCE AND TO PAY THE SAME TO THE CREDIT OF THE CENTRAL GOVERNMENT FROM THE HIRING CHARGES OF RS. 4.62 CRORES. AO INFORMED THE ASSESSEE THAT HE WAS LIABLE TO DEDUCT TAX AT SOURCE AS PER THE ITA NO.2017/MUM/10 PROVISIONS OF SECTION 194C OF THE ACT. HE DIRECTED THE ASSESSEE TO PRODUCE BOOKS OF ACCOUNTS, LEDGER ETC. ASSESSEE VIDE HIS LETTER DATED 06.12.2 006 SUBMITTED THAT AS PER THE AMENDED PROVISIONS, HE WAS NOT TO LIABLE TO DEDUCT TAX AT S OURCE. AO DIRECTED THE ASSESSEE TO FILE HIS EXPLANATION AS WHY HE SHOULD NOT BE TREATED ASSESSE E-IN-DEFAULT U/S 201(1) AND 201(1A) OF THE ACT. AS PER THE AO ASSESSEE DID NOT FILE ANY EXPLA NATION IN THIS REGARD. AO HELD THE ASSESSEE IN DEFAULT UNDER SECTION 201(1) OF THE ACT IN RESPECT OF A SUM OF RS. 9.70,235/- (2.1 % OF THE AMOUNT INVOLVED I.E. 4.62 CRORES), BEING THE PAYM ENT OF HIRE CHARGES. HE FURTHER LEVIED INTEREST OF RS. 5.43 LAKHS U/S 201(1A) OF THE ACT FOR THE PE RIOD OF 01.06.2003 TO 31.12.2007. 2. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST AP PELLATE AUTHORITY (FAA). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ORD ER PASSED U/S 201 OF THE ACT, HE HELD THAT APPELLANT ENGAGED TRUCKS THROUGH AGENTS AND SUPPLIE RS, THAT FOR EACH TRUCK HE MADE SEPARATE PAYMENTS, THAT THERE WAS NO CONTRACT BETWEEN SUPPLI ERS AND THE DRIVERS/OWNERS , THAT THE PAYMENTS WERE MADE DIRECTLY TO THE TRUCK DRIVERS/OW NERS AND NOT TO THE SUPPLIER, THAT THE CONTRACT WAS BETWEEN THE AGENT, THAT APPELLANTS CASE WAS COV ERED BY A CIRCULAR NUMBER 715 ON DATED 08.08.1995 ISSUED BY THE CENTRAL BOARD DIRECT TAXES (CBDT), THAT AS PER THE CIRCULAR IF THE CONTRACT WAS BETWEEN THE TRUCK OWNERS/DRIVERS AND E ACH GR WAS SEPARATE THEN THE PAYMENT MADE FOR THE TRUCK HAD TO BE TREATED AS SEPARATE P AYMENT, THAT THE ASSESSEE HAD ENGAGED TRUCKS THROUGH AGENTS AND SUPPLIERS, THAT EACH TRUCK WAS E NGAGED FOR SEPARATE DESTINATION, THAT THE ACTION OF THE AO WAS NOT JUSTIFIED AS PER THE LAW T REATING THE APPELLANT ASSESSEE IN DEFAULT FOR NOT DEDUCTING TAX AS PROVISION OF SECTION 194C OF THE A CT. FINALLY HE HELD THAT ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AND HE DELETED THE DEMAND RAI SED U/S 201(1) OF THE ACT AMOUNTING TO RS. 9,70,237 LAKHS. FOLLOWING THE ORDER OF THE ITAT BE NCH JODHPUR IN THE CASE OF I.T.O. VS EMERALD CONSTRUCTION CO. PVT. LTD. HAS HELD THAT INTEREST U /S 201(1A) OF THE ACT WAS NOT PAYABLE BY THE ASSESSE. HE DIRECTED THE AO DELETE AMOUNT OF INTERE ST, AS THE TAX TO BE DEDUCTED U/S 201(1) OF THE ACT WAS NOT PAYABLE ITSELF. 3. BEFORE US DR SUBMITTED THAT FAA HAD ADMITTED ADD ITIONAL EVIDENCES WITHOUT RECORDING ANY REASONS AS REQUIRED IN RULE 46(A) OF THE IT RU LES 1962 (RULES) THAT FAA HAD NOT FOLLOWED PROVISIONS OF RULE 46A(3) OF THE RULES, THAT REASON ABLE OPPORTUNITY OF HEARING WAS NOT GIVEN TO THE AO BEFORE ADMITTING ADDITIONAL EVIDENCES. ASS ESSEE SUBMITTED THAT HE WAS COVERED BY THE PROVISO OF SECTION 194C(2) OF THE ACT, THAT VIDE HI S LETTER 06.10.2006 HE HAD SUBMITTED THAT THIS IS GROSS RECEIPT FOR THE ASSESSMENT YEAR 2003-04 W AS LESS THAN MONETARY LIMIT RS. 40 LAKH. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MA TERIAL BEFORE US. THOUGH THE AO HAD SUBMITTED THAT FAA HAD ADMITTED ADDITIONAL EVIDENCE S, BUT HE HAS NOT INDICATED AS WHICH FRESH EVIDENCE WERE ADMITTED BY FAA. AFTER GOING THROUGH THE ORDER OF THE FAA WE HAVE FIND THAT HE HAD NOT ACCEPTED ANY NEW EVIDENCES. DR ALSO COULD N OT TELL US ABOUT THE EVIDENCE THAT WERE SUBMITTED BY THE ASSESSEE DURING APPELLATE PROCEEDI NGS. WE FIND THAT CASE OF THE ASSESSEE COVERED BY THE AMENDED SUB-SECTION 194(C) OF THE AC T, WHICH HAS BEEN INSERTED IN THE ACT FROM 1 ST JUNE 2002 AMENDMENT SECTION READS TO 194(C) READ A S UNDER:- ITA NO.2017/MUM/10 PROVIDED THAT AN INDIVIDUAL OR A HINDU UNDIVIDED FA MILY, WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSIO N CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE (A) OR CLAUSE (B) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANCIAL YEAR IN WHICH S UCH SUM IS CREDITED OR PAID TO THE ACCOUNT OF THE SUB-CONTRACTOR, SHALL BE LIABLE TO DEDUCT INCOM E-TAX UNDER THIS SUB-SECTION. 4. ASSESSEE VIDE HIS LETTER DATED 06.10.2006 HAS BROUGHT TO THE NOTICE OF AO, THAT HE IS COVERED BY THE AMENDED PROVISION, BUT AO DID NOT GI VE ANY FINDING ABOUT THE SAID CLAIM OF THE ASSESSEE. IN THESE CIRCUMSTANCES WE ARE OF THE OPIN ION THAT ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. THEREFORE, CONFIRMING HI S ORDER WE DECIDED THE APPEAL AGAINST THE AO. AS A RESULT APPEAL FILED BY THE AO STANDS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH APRIL 2013 SD/- SD/- ( . . / I.P.BANSAL ) ( / RAJENDRA ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, / DATE: 8 TH APRIL 2013 S.S.KUMAR ' ' ' ' # ## # $%& $%& $%& $%& '&(% '&(% '&(% '&(% / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR F BENCH, ITAT, MUMBAI 6. GUARD FILE )&% $% //TRUE COPY// ' ' ' ' / BY ORDER, * ** * / + + + + DY./ASST. REGISTRAR , / ITAT, MUMBAI