ITO, Ward-2(2), Kolkata, Asansol V. M/S. Maa Tara Trasnport Co., Burnpur

ITA 2093/KOL/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6339 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 17-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B DAS
• Assessee Lawyers: BARSAN CHATTERJEE
• Section: 143(3)

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 2093 / KOL / 20 14 ASSESSMENT YEAR : 2010-11 INCOME TAX OFFICER WARD-2(2), PARMER BUILDING, 54, G.T. ROAD, ASANSOL-04 V/S . M/S MAA TARA TRANSPORT CO. RADHANAGAR ROAD, P.O. BURNPUR, BURDWAN-713325 [ PAN NO.AAMFM 33326 M ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI B. DAS, ADDL. CIT-DR /BY RESPONDENT SHRI BARSAN CHATTERJEE, AR /DATE OF HEARING 07-06-2018 /DATE OF PRONOUNCEMENT 15-06-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2010-11 C HALLENGES CORRECTNESS OF COMMISSIONER OF INCOME TAX (APPEALS) -ASANSOLS ORDER DATED 22.09.2014, PASSED IN CASE NO.142/C.I.T.(A)/A SL/W-2(2)/ASL/13-14 RESTRICTING ASSESSING OFFICERS ACTION DISALLOWING TRANSPORT CHARGES OF 60,68,502/- @12.5% ONLY COMING TO THIS 7,58,562/-, IN PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE A CT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY C ONTENDS DURING THE COURSE OF HEARING THAT CIT(A) HAS ERRED IN LAW AS W ELL AS ON FACTS IN RESTRICTING THE IMPUGNED DISALLOWANCE VIDE FOLLOWING DETAILED D ISCUSSION:- 24. GROUND 18 IS AGAINST DISALLOWANCE UNDER SECTION 40A(IA). THE ASSESSING OFFICER DISALLOWED ENTRIES TRANSPORTATION CHARGE AS VOUCHER S WERE NOT PRODUCED AND TAX WAS NOT DEDUCTED UNDER SECTION 194-I. AFTER HEARING A N OTICE WAS ISSUED TO ASSESSING OFFICER AS UNDER:- ITA NO.2093/KOL/2014 A.Y.20 10-11 ITO WD-2(2), ASL. VS. M/S MAA TARA T RANSPORT CO. PAGE 2 IN REGARD TO DISALLOWANCE OF RS.6,068,502/- UNDER SECTION 40A((IA), PRIOR IDENTIFICATION OF PERSONWISE DEFAULT UNDER SECTION 194-I IS NEEDED. THIS IS ABSENT. YOU MAY CALL FOR AND VERIFY THE BOOKS OF AC COUNT AND VOUCHERS AND GIVE A REPORT ON THE EXTENT OF DISALLOWANCE TO BE M ADE. IN REPLY THE ASSESSING OFFICER REPORTED AS UNDER:- AS DIRECTED, A LETTER DATED 23.06.2014 VIDE LETTER NO. AAMFM 3326M/WD-2(2)/ASL/2014-15/79 WAS ISSUED TO THE ASSE SSEE BY SEED POST FOR VERIFICATION OF THE FACT, REGARDING ENQUIR Y OF TRANSACTIONS RELATING TO SECTION 40A(IA) OF RS.60,68,502/- AND A DDITION OF RS.5,83,695.21 WITHOUT TAKING VIEWS OF THE ASSESSEE AND AN OPPORTUNITY WAS ALLOWED TO THE ASSESSEE. THE ASSESS EE WAS REQUESTED TO COMPLY ON 29.06.2014 ALONGWITH EVIDENC E IN SUPPORT OF TRANSACTIONS RELATING TO SECTION 40A(IA) AND RS.5,8 3,695.21 WITHOUT TAKING VIEWS OF THE ASSESSEE ALAONG WITH LEDGER COP Y OF ALL RELEVANT PAPERS BUT THE ASSESSEE HAS NOT SUBMITTED ANY DETA ILS AND NOT APPEARED TILL DATE. THE ASSESSEE OR ITS AU9THORIZED REPRESENTATIVE DID NOT APPEAR BEFORE THE UNDERSIGNED AND DID NOT PROVE THE TRANSACTIONS RELATING TO SECTION 40A(IA) OF RS.60,68,502/- AND ADDITION OF RS.5,83,6 95.21 WITHOUT TAKING VIEWS OF THE ASSESSEE ALONG WITH LEDGER COPY OF ALL RELEVANT PAPERS WITH VERIFICATION OF BOOKS OF ACCOUNT AND VO UCHERS. 25. ANALYSIS OF ABOVE REVEAL THAT NO CASE IS MADE F OR DISALLOWANCE UNDER SECTION 40A(IA). HOWEVER, NON PRODUCTION OF VOUCHERS PROVE THAT ACCOUNTS ARE NOT CORRECT AND COMPLETE WARRANTING ASSESSMENT TO BEST OF JUDGM ENT. HOWEVER APPELLANT SUBMITTED THAT PROPORTIONATE TRANSPORTATION CHARGES IS COMING DOWN YEAR AFTER YEAR AND HENCE NO DISALLOWANCE IS NEEDED. THE PICTURE IS AS UNDER:- F.Y TRANSPORTATION CHARGES RECEIVED TRANSPORTATION CHARGES PAID PERCENTAGE 2007-08 RS.2,11,81,800/- RS.94,60,081/- 44.66% 2008-09 RS.2,10,99,894/- RS.69,41,277/- 32.89% 2009-10 RS,1,88,53,303/- RS.60,68,502/- 32.18% 26. THE MATTER IS CONSIDERED. PRODUCTION OF VOUCHER S IS A MANDATORY REQUIREMENT TO PROVE CORRECTNESS AND COMPLETENESS OF ACCOUNTS. TRA NSPORTATION CHARGES DEBITED DEPEND ON NATURE OF WORK DONE, HOW IT IS EXECUTED, AND OTHER SURROUNDING CIRCUMSTANCES. HENCE, VIEWING TRANSPORTATION CHARGE S IN ISOLATION IS NOT A WAY TO VIEW CORRECTNESS OF ACCOUNTS. IN EXERCISE OF POWER UNDER EXPLANATION TO SECTION 251, I HOLD THAT A DISALLOWANCE IS NEED TO ABSORB FOR DE FICIENCY IN ACCOUNTS. THE AUTHORISED REPRESENTATIVE OBJECTED TO SAME AGAIN BY POINTING TO DECREASING PROPORTION OF TRANSPORTATION CHARGES TO TURNOVER. T HIS IS REJECTED SINCE THE NATURE OF WORK, MANNER EXECUTION ETC. WERE NOT ESTABLISHED. A CCORDINGLY I ESTIMATE THE DISALLOWANCE TO M9Y BEST OF JUDGMENT AT 12.5% OF SU MS DEBITED AND THUS COMES TO 7,58,562/-. THE ASSESSING OFFICER IS DIRECTED TO RE PLACE THE ADDITION OF RS.60,68,502/- MADE UNDER SECTION 40A(I) BY RS.7,58,562/- AS A DIS ALLOWANCE TO ABSORB DEFICIENCY IN BOOKS OF ACCOUNT AND VOUCHERS. THE GROUND IS TREATE D AS PARTLY ALLOWED. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RE VENUES ABOVE SOLE ARGUMENT. WE NOTICE FIRST OF ALL THAT ASSESSING OFF ICER HAD INVOKED U/S 40(A)(IA) OF THE ACT ON THE GROUND THAT ASSESSEE HA D NOT BEEN DEDUCTED THE PRESCRIBED TDS U/S. 194-I OF THE ACT. HE SOUGHT TO TREAT THE IMPUGNED ITA NO.2093/KOL/2014 A.Y.20 10-11 ITO WD-2(2), ASL. VS. M/S MAA TARA T RANSPORT CO. PAGE 3 PAYMENTS TO BE RENT OF THE TRANSPORT VEHICLES IN QU ESTION. WE DO NOT FIND ANY DISCUSSION AT ALL EITHER IN ASSESSMENT OR LOWER APP ELLATE PROCEEDINGS AS TO HOW THE IMPUGNED TRANSPORTATION CHARGES PAID TO VAR IOUS LORRIES CAN BE HELD TO BE RENTAL PAYMENTS. THERE IS FURTHER NO FINDING THAT THE SAME SATISFIED THE BASIC THRESHOLD LIMIT PRESCRIBED FOR TDS DEDUCTION IN THE RELEVANT PREVIOUS YEAR. 4. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITS AT T HIS STAGE THAT ASSESSING OFFICER HAD RIGHTLY DISALLOWED ASSESSEES CLAIM WHICH HAS BEEN WRONGLY RESTRICTED 12.5% ONLY IN THE CIT(A)S ORDER . WE FIND IN THIS BACKDROP THAT THE ASSESSING OFFICER HAD NOT MADE THE IMPUGNE D DISALLOWANCE ON GENUINENESS BUT ON ACCOUNT OF ASSESSEES FAILURE IN DEDUCTING TDS. THERE IS NO REASON STATED IN ASSESSMENT ORDER MANDATING THE TDS DEDUCTION ON THE IMPUGNED TRANSPORTATION CHARGES LEARNED DR AT THIS STAGE SUBMITS THAT THE SAME ARE IN THE NATURE OF CONTRACTUAL PAYMENTS. WE DO NOT SEE ANY LIABILITY BEING FASTENED TO THE PAYEES CONCERNED MAKING THEM A PARTY TO ASSESSEES CONTRACT. BE THAT AS IT MAY, THE CIT(A) HAS EXERCIS ED HIS STATUTORY JURISDICTION PECULIAR FACTS WHILST GRANTING PART RELIEF TO THE A SSESSEE. WE THEREFORE SEE NO REASON TO INTERFERE IN HIS ORDER UNDER CHALLENGE. 5. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 15/06/2018 SD/- SD/- ( %) (' %) (DR. A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 15 / 06 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ITO WARD-2(2), PARMER BUILDING, 54, G.T. R OAD, ASANSOL-04 2. /RESPONDENT-M/S MAA TARA TRANSPORT CO. RADHANAGAR R OAD, P.O. BURNPUR BURDWAN-713325 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA ) 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR . PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,