Sh. Prashant Vashista, Gurgaon V. ITO, New Delhi

ITA 2090/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1262 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-11-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 18-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B K GUPTASR
• Keywords: TDS
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH : D NEW DELHI) BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.2090/DEL./2009 (ASSESSMENT YEAR : 2005-06) SHRI PRASHANT VASHISTA, VS. ITO, WARD 6, PROP. MIKRON TOOLS & INDUSTRIES, NEW DELHI. PLOT NO.6, LANER NO.2, MATA SHEETLA COLONY, NEAR MATA SHEETLA MANDIR, GURGAON. (PAN/GIR NO.ADPPV6235N) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI TARUN KUMAR, CA REVENUE BY : SHRI B.K. GUPTA,SR.DR ORDER PER A.K. GARODIA, AM THIS IS AN ASSESSEE S APPEAL DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS), PANCHKULLA DATED 27.2.2009 FOR THE ASSESSMENT YEAR 2005-06. THE ONLY GROUND RAISED BY THE ASSESSEE READS AS UNDER: ACTION OF THE C IN CONFIRMING THE DISALLOWANCE OF JOB WORK OF RS.443,500/- MADE BY ASSESSING OFFICER U/S40(IA) OF I.T. ACT BY TREAT ING THE ENTIRE AMOUNT AS JOB WORK PAYMENT WITHOUT APPRECIATING THE FACT THAT IT INCLUDES COST OF MATERIAL TO THE EXTENT OF 80% IS UNJUST, ILLEGAL, ARBITRARY AND AGA INST THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. BRIEF FACTS ARE THAT IT IS NOTED BY THE ASSESSIN G OFFICER IN PARA.3 OF THE ASSESSMENT ORDER THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS , IT WAS NOTICED THAT THE ASSESSEE HAS PAID JOB WORK CHARGES AMOUNTING TO RS.1025752/-. I T IS FURTHER NOTED BY THE ASSESSING OFFICER THAT OUT OF THIS PAYMENT OF JOB WORK, TDS O N PAYMENT OF RS.443,500/- PAID TO M/S WIRECUT ENTERPRISES PVT. LTD. WAS NOT DEDUCTED AS PER THE PROVISIONS OF I.T. ACT, 1961. THE ASSESSING OFFICER DISALLOWED THIS PAYMEN T OF RS.443,500/- INVOKING THE PROVISIONS OF SECTION 40(IA) OF THE ACT. BEING AGG RIEVED, ASSESSEE CARRIED THE MATTER IN I.T.A. NO.2090/DEL./2009 (A.Y. : 2005-06) 2 APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEA LS), BUT WITHOUT SUCCESS AND NOW THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 3. IT IS SUBMITTED BY THE LD.AR OF THE ASSESSEE TH AT TDS AGAINST PAYMENT OF JOB WORK CHARGES IS DEDUCTIBLE U/S 194C OF THE ACT. IT IS POINTED OUT THAT AS PER SECTION 194C, TDS WAS NOT DEDUCTIBLE BY AN INDIVIDUAL AND HUF EVE N IF IT WAS REQUIRED TO GET HIS ACCOUNTS AUDITED U/S 44AB OF THE ACT. IT IS POINTE D OUT THAT AMENDMENTS WERE MADE IN SECTION 194C BY THE FINANCE ACT, 2007 W.E.F. 1.6.20 07 AND AS PER THIS AMENDMENT, CLAUSE (K) HAS BEEN INSERTED IN SUB-SECTION 1 OF SECTION 1 94C AS PER WHICH, AN INDIVIDUAL OR HUF WERE ALSO REQUIRED TO DEDUCT TDS IF THEY WERE HAVIN G TURNOVER OR RECEIPTS EXCEEDING THE LIMITS SPECIFIED U/S 44AB OF THE ACT. IT IS SUBMITT ED THAT SINCE IN THE PRESENT CASE, THE ASSESSMENT YEAR INVOLVED IS 2005-06 AND HENCE, THE AMENDED PROVISIONS ARE NOT APPLICABLE IN THE PRESENT YEAR AND, THEREFORE, IN T HE PRESENT YEAR, THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS AND HENCE PROVISIONS OF SECT ION 40(IA) ARE NOT APPLICABLE IN THE PRESENT YEAR. LD.DR OF THE REVENUE SUPPORTED THE O RDERS OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BE LOW. WE FIND THAT THIS IS AN ADMITTED POSITION THAT THE ASSESSEE IN THE PRESENT CASE IS A N INDIVIDUAL AND AS PER THE PROVISIONS OF SECTION 194C, TDS WAS NOT DEDUCTIBLE BY THE ASSESSE E U/S 194C TILL 31.5.2007 AND ONLY W.E.F. 1.6.2007, THE AMENDED PROVISIONS OF SECTION 194C BECOMES APPLICABLE AND THE ASSESSEE IS REQUIRED TO DEDUCT TDS. AS PER THE PRO VISIONS OF SECTION 40(IA), IF THE ASSESSEE IS REQUIRED TO DEDUCT TDS UNDER CHAPTER XV IIB AND SUCH TAX HAS NOT BEEN DEDUCTED OR AFTER DEDUCTION, HAS NOT BEEN PAID, THE N ONLY, SECTION 40(IA) BECOMES APPLICABLE. SINCE IN THE PRESENT CASE, TDS WAS NOT DEDUCTIBLE BY THE ASSESSEE IN THE PRESENT YEAR UNDER THE PROVISIONS OF CHAPTER XVIIB, SECTION 40(IA) IS NOT APPLICABLE IN THE PRESENT CASE. WE HOLD ACCORDINGLY AND THE DISA LLOWANCE MADE BY THE ASSESSING OFFICER IS DELETED. I.T.A. NO.2090/DEL./2009 (A.Y. : 2005-06) 3 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 5. ORDER PRONOUNCED IN OPEN COURT ON 12 TH NOVEMBER, 2009 AFTER CONCLUSION OF THE HEARING SD/- SD/- (C.L. SETHI) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: NOV. 12, 2009. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A), PANCHKULLA 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT