M/s Shiba Enginering Works, Howrah V. I.T.O. Ward-48(3), Kolkata, Kolkata

ITA 2086/KOL/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9248 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2011
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 25-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 08-12-2009
• Court: TRIBUNAL
• Department Lawyers: S I BARA
• Assessee Lawyers: S M SURANA
• Keywords: TDS; Set aside
• Section: 143(3); 40(a)(ia); 194C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , /AND , . . !' ) [BEFORE HONBLE SRI MAHAVIR SINGH, JM & HONBLE SHR I C. D. RAO, AM] # # # # / I.T.A NO. 2086/KOL/2009 $% &' $% &' $% &' $% &'/ // / ASSESSMENT YEAR : 2006-07 M/S. SHIBA ENGINEERING WORKS VS INCOME-TAX OFFIC ER, WD-48(3), KOLKATA (PAN-AAMFS 2657 R) ( )* /APPELLANT ) (+,)*/ RESPONDENT ) FOR THE APPELLANT: SHRI S. M. SURANA FOR THE RESPONDENT: SHRI S. I. BARA !- / ORDER PER MAHAVIR SINGH, JM ( , , , , ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDER OF CIT(A)-XXX, KOLKATA IN APPEAL NO.310/CIT(A)-XXX/WARD-48(3)/2008-09 DATED 0 1.09.2009. THE ASSESSMENT WAS FRAMED BY ITO, WD-48(3), KOLKATA U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSME NT YEAR 2006-07 VIDE HIS ORDER DATED 31.12.2008. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF ASSESSING OFFICER IN DISAL LOWING PAYMENT MADE TO SUB- CONTRACTORS AMOUNTING TO RS.36,26,987/-. FOR THIS, THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUND NOS. 2, 3 AND 4: 2. FOR THAT THE LD. CIT(A) ERRED IN 3626987/- WHEN THE APPELLANT WAS NOT LIABLE TO DEDUCT THE TAX, ACCORDINGLY THE PROVISIONS OF SE CTION 40(A)(IA) WERE NOT APPLICABLE AND THE ADDITION WAS NOT IN ACCORDANCE W ITH LAW. 3. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.3626987/- WHEN THE AMOUNT WAS DULY PAID DURING THE YEAR AND NO AMO UNT WAS PAYABLE SO AS TO APPLY THE PROVISIONS OF SECTION 40(A)(IA) AND ACCOR DINGLY THE DISALLOWANCE WAS NOT IN ACCORDANCE WITH LAW. 4. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE DISALLOWANCE U/S. 40(A)(IA) WAS NOT CALLED FOR. 2 ITA 2086/K/20 0 9 SHIBA ENGG. WORKS. A.Y. 06-07 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE TAKEN US TO THE ASSESSMENT ORDER AND DRAWN OUR ATTENTION THAT THE ASSESSING OFFICER HAS NOT EXAMINED, WHETHER TO THE LABOUR PAYMENTS RELATES TO SUB-CONTRACTOR OR CONTRA CTOR FALLING U/S. 194C(1) OR 194C(2) OF THE ACT AND HE HAS ALSO NOT EXAMINED, WHETHER IN THE FACTS OF THE CASE, TDS PROVISIONS OF SECTION 194C ARE APPLICABLE AT ALL. HE DRAWN OUR ATTENTION TO PARA 3 OF ASSESSMENT ORDER, WHICH READS AS UNDER: 3. LABOUR PAYMENT TO SUB-CONTRACTOR ON VERIFICATION OF RELEVANT DOCUMENTS FILED SO FAR IT REVEALS THAT TOTAL PAYMENT OF RS.43,64,694/- PAID TO DIFFERENT SUB-CONTRACTORS. IN VIEW OF THE ABOVE THE ASSESSEE WAS ASKED TO PROD UCE EVIDENCE REGARDING TAX DEDUCTED AT SOURCE MADE ON ACCOUNT OF LABOUR CHARGE S PAID TO THE DIFFERENT SUB- CONTRACTORS ON 15.12.2008 VIDE ORDER SHEET DATED 18 .11.2008, SRI KAJOL MONDAL, A/R OF THE ASSESSEE APPEARED ON 15.12.2008 AND STAT ED THAT NO TDS HAD BEEN MADE ON PAYMENT TO THE SUB-CONTRACTORS. IN THE CIRCUMSTANCES THERE IS A VIOLATION OF PROVIS ION OF THE SECTION 40A(IA) OF THE I.T.ACT, 1961 AND ENTIRE LABOUR PAYMENT OF RS.43,64 ,694/- MADE TO THE SUB- CONTRACTORS IS ADDED BACK TO THE TOTAL INCOME. 4. SIMILARLY, THE CIT(A) ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER EXACTLY BUT CIT(A) HAS NOTED THAT THE LABOUR PAYMENTS ARE T O SUB-CONTRACTORS, BUT HE HAS ALSO NOT DECIDED WHETHER THE ASSESSEES CASE FALLS U/S. 194C(1) OR 194C(2) OF THE ACT. LD. COUNSEL FOR THE ASSESSEE REQUESTED BENCH, LET THE I SSUE BE SET ASIDE TO THE FILE OF ASSESSING OFFICER FOR EXAMINATION IN THE LIGHT OF T HE SUBMISSIONS MADE. ON THE OTHER HAND, LD. DR HAS NOT OBJECTED TO THE SETTING ASIDE OF THIS ISSUE AS THE AO AS HE HAS NOT PASSED A SPEAKING ORDER. EVEN WE FIND THAT THE CIT (A) HAS ALSO NOT GONE INTO THE SUBMISSIONS RAISED BY THE ASSESSEE. 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT NEITHER THE ASSESSING OFFICER N OR THE CIT(A) HAS GONE INTO THE ASPECT WHETHER THE PROVISIONS OF SECTION 194C I.E. 194C(1) OR 194C(2) OF THE ACT APPLIES TO THE ASSESSEES CASE OR NOT. SIMPLY, BOT H THE LOWER AUTHORITIES HAVE DISALLOWED THE CLAIM, WITHOUT PASSING A SPEAKING ORDER AND WIT HOUT GOING INTO THE DETAILS. IN VIEW OF THESE FACTS, WE ARE OF THE VIEW, LET THIS BE DEC IDED BY ASSESSING OFFICER AFRESH ON ALL ASPECTS AFTER PROVIDING REASONABLE OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSES. 3 ITA 2086/K/20 0 9 SHIBA ENGG. WORKS. A.Y. 06-07 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 7. ORDER IS PRONOUNCED IN THE OPEN COURT ON 25.03.2 011. SD/- SD/- . . !' , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( ' ' ' ') )) ) DATED 25TH DAY OF MARCH, 2011 ./ $01 2 JD.(SR.P.S.) !- 3 +4 5!4&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT M/S. SHIBA ENGINEERING WORKS, 132/6, N ARASINGHA DUTTA ROAD, HOWRAH-711 101. 2 +,)* / RESPONDENT ITO, WD-48(3), KOLKATA. 3 . -$ ( )/ THE CIT(A), KOLKATA 4. 5. -$ / CIT KOLKATA 4 <= +$ / DR, KOLKATA BENCHES, KOLKATA ,4 +/ TRUE COPY, !-$>/ BY ORDER, 1 /ASSTT. REGISTRAR .