Atharva Sizers, Ichalkaranji V. Income-tax Officer, Ward - 2, Ichalkranji

ITA 2229/PUN/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0298 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-12-2018
• Assessment Year: 2005-2006
• Appeal Filed On: 25-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: IS DIRECTED AGAINS T PASSED
• Keywords: Opportunity of being heard
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT . / ITA NO.2229/PUN/2017 / ASSESSMENT YEAR : 2005-06 ATHARVA SIZERS, 18/872, STATION ROAD, ICHALKARANJI 416115 PAN : AAJFA3632K VS. ITO, WARD-2, ICHALKARANJI (APPELLANT) (RESPONDENT) / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-2, KOLHAPUR ON 02-08-2017 IN RELA TION TO THE ASSESSMENT YEAR 2005-06. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSE E PAID FREIGHT AND TRANSPORTATION CHARGES AMOUNTING TO RS.4,92,185/- ON WHICH NO DEDUCTION OF TAX AT SOURCE WA S MADE. THE ASSESSING OFFICER (AO) MADE DISALLOWANCE U/S. 40(A) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLE D AS APPELLANT BY SHRI M.K. KULKARNI RESPONDENT BY SHRI RAJESH GAWALI DATE OF HEARING 06-12-2018 DATE OF PRONOUNCEMENT 07-12-2018 ITA NO.2229/PUN/2017 ATHARVA SIZERS 2 THE ACT). THE ASSESSEE FURTHER PAID A SUM OF RS.9 LA KHS TOWARDS MACHINERY RENT. THE AO, ON PERUSAL OF THE RENT AGREEMENT WITH ITS SISTER CONCERN, FOUND THAT IT WAS NOTHING BU T A SORT OF JOB WORK GOT DONE BY THE ASSESSEE FROM M/S. HR ISHIRAJ WARPERS, TO WHOM THE PAYMENT WAS MADE IN THE SHAPE OF MACHINERY RENT. INVOKING THE PROVISIONS OF SECTION 40(A) (IA), THE AO HELD THAT THE ASSESSEE FAILED TO DEDUCT TAX AT SOURC E U/S. 194C OF THE ACT. HE, THEREFORE, MADE TOTAL DISALLOWANCE OF RS.13,92,185/-. THE LD. CIT(A) CONFIRMED THE SAME. 3. HAVING HEARD BOTH THE SIDES AND PERUSED THE RELEVANT MATERIAL ON RECORD, IT IS SEEN FROM THE DETAILS PLACED ON RECO RD ABOUT THE FREIGHT AND TRANSPORTATION CHARGES THAT THE ASSESSEE DID NOT PAY ANY FREIGHT TO TRANSPORTERS. IT IS ONLY THE ICHALKARANJI SIZING CO-OPERATIVE SOCIETY LTD., WHICH CHARGED LORRY FREIGHT, T. PHONE CHARGES, GODOWN CHARGES, SERV ICE CHARGES ETC. FROM THE ASSESSEE. THE LD. AR CONTENDED THAT NO TRANSPORTATION CHARGES WERE PAID BY THE ASSESSEE AND THE PAYMENT WAS, IN FACT, IN THE NATURE OF REIMBURSEMENT OF VARIOUS EXPENSES AND AS SUCH THE PROVISIONS OF TDS WERE NOT ATTRACTED. IN VIEW OF THE FACT THAT THE DEBIT NOTES PLACED O N RECORD DECIPHER THAT THE ASSESSEE PAID LORRY FREIGHT, TELEPH ONE ITA NO.2229/PUN/2017 ATHARVA SIZERS 3 CHARGES, GODOWN CHARGES, SERVICE CHARGES ETC. AND SUC H DEBIT NOTES WERE CLAIMED TO HAVE BEEN ISSUED BY THE SUPPLIER, TH E POSITION NEEDS TO BE EXAMINED AS TO WHETHER IT IS A CASE OF REIMBURSEMENT OF TRANSPORTATION PAID BY THE SUPPLIER AND LATER RECOVERED FROM THE ASSESSEE OR OTHERWISE. WITHOUT COMMENTING ON THE APPLICABILITY OF THE PROVISIONS OF SECTION 40(A)(IA), I SET-ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF AO TO DECIDE THE ISSUE AFRESH AS PER LAW AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. AS REGARDS THE SECOND PAYMENT OF RS.9 LAKHS, THE LD. AR CONTENDED THAT IT IS NOT IN THE NATURE OF JOB WORK CHARGES AND THE MATTER SHOULD BE RE-EXAMINED WITH REFERENCE TO THE AGREEMENT AND OTHER RELATED MATERIAL, WHICH HAVE NOT BEEN TAKEN INTO CONSIDERATION IN RIGHT PERSPECTIVE. NO SERIOUS OBJECTION WAS TAKEN BY THE LD. DR. IN VIEW OF THE FOREGO ING FACTS, I SET-ASIDE THE IMPUGNED ORDER AND REMIT THE ISSUE TO THE FILE OF AO FOR EXAMINING THE APPLICABILITY OF THE CORRECT SECTION FOR TAX WITHHOLDING AFTER GRATING DUE OPPORTUNITY TO THE ASSESSEE. ITA NO.2229/PUN/2017 ATHARVA SIZERS 4 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07 TH DECEMBER, 2018. SD/- (R.S.SYAL) / VICE PRESIDENT PUNE; DATED : 07 TH DECEMBER, 2018 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS)-2, KOLHAPUR 4. / THE PR. CIT-2, KOLHAPUR 5. , , SMC / DR SMC, ITAT, PUNE; 6. / GUARD FILE. // TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO.2229/PUN/2017 ATHARVA SIZERS 5 DATE 1. DRAFT DICTATED ON 06-12-18 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 06-12-18 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *