M/S. Desai Trading (Agency), Asansol V. ITO, Ward-2(4), Asansol, Asansol

ITA 2269/KOL/2014

• Counselvise Citation: 226923514 RSA 2014
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 29-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N O N E

Judgement Text

I.T.A. NO . 2 2 6 9 / KOL ./201 4 ASSESSMENT YEAR: 200 6 - 20 0 7 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI GEORGE MATHAN , JUDICIAL MEMBER I.T.A. NO. 2 2 6 9 / KOL / 20 1 4 ASSESSMENT YEAR : 200 6 - 20 0 7 M/S. DESAI TRADING (AGENCY),................. .. ..... ........... .. .APP ELL ANT RAM BANDH UTALA, G.T. ROAD EAST, ASANSOL - 713 303 [ PAN : A A CFD 4788 N ] - VS. - INCOME TAX OFFICER , ........................... ................... ... . RESPONDENT WARD - 2 ( 4 ), ASANSOL , ASANSOL - 713 304 APPEARANCES BY: N O N E , FOR THE ASSESSEE S HRI RAJESH KUMAR , J CIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : FEBRUARY 2 6 , 2 01 5 DATE OF PRONOUNCING THE ORDER : FEBRUARY 2 6 , 201 5 O R D E R PER GEORGE MATHAN : THIS IS AN APPEAL FILED BY THE ASSESSE E AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) , ASANSOL IN APPEAL NO. 1 52 / CIT(A)/ASL/W - 2(4)/ASL/08 - 09 D ATED 1 1 . 12 .201 4 FOR THE ASSESSMENT YEAR 200 6 - 0 7 . 2 . NONE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI RAJESH KUMAR , JCIT, SR. D.R. REPRESENTED ON BEHALF OF THE REVENUE. 3 . AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD. SR. D.R. THAT THE ASSESSEE IS C&F AGENT FOR CLARIS LIFE SCIENCES LIMITED. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD PAID TRANSPORTATION CHARGES TO M/S. GITANJALI ROADWAYS WITHOUT DEDUCTING TDS UNDER SECTI ON 194C. IT WAS THE SUBMISSION THAT CONSEQUENTLY THE TRANSPORTATION CHARGES PAID WAS I.T.A. NO . 2 2 6 9 / KOL ./201 4 ASSESSMENT YEAR: 200 6 - 20 0 7 PAGE 2 OF 3 DISALLOWED BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. IT WAS THE SUBMISSION THAT THE DISALLOWANCE AS MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE LD. CIT(APPEALS) WAS LIABLE TO BE UPHELD. 4. I HAVE CONSIDERED THE SUBMISSION OF LD. SR. D.R., PERUSED THE ASSESSMENT ORDER AND THE ORDER OF THE LD. CIT(APPEALS). A PERUSAL OF THE AUDIT REPORT IN THE ASSESSEE S CASE CLEARLY SHOWS THAT THE ASSESSEE IS IN THE BUSINESS OF WHOLESALE MEDICINE, I.E. THE ASSESSEE PURCHASES FROM M/S. CLARIS LIFE SCIENCES LIMITED AND S E L L S THE SAME. THE ASSESSEE IS NOT A CONTRACTOR IN RESPECT OF THE TRANSPORTATION OF GOODS. THE COST OF TRANSPORTATION OF THE GOODS, IN FACT, IS PART OF THE COST OF PURCHASES OF THE GOODS BY THE ASSESSEE. ONCE IT IS TREATED AS THE COST OF PURCHASES IN THE HANDS OF THE ASSESSEE, THEN ADMITTEDLY THE SAME CANNOT BE TREATED AS LIABLE FOR TDS UNDER SECTION 194C. THIS IS IN VIEW OF MY EARLIER DECISION IN THE CASE OF M/S. DHIRENDRA NATH MONDAL PVT. LTD. IN ITA NO. 617/KOL/2014 DATED 23.02.2015, WHEREIN IT HAS BEEN HELD AS FOLLOWS: - 5. I HAVE CONSIDERED THE SUBMISSIONS AS ALSO THE ASSESSMENT ORDER AND THE ORDER OF THE LD. CIT(APPEALS). A PERUSAL OF THE ORDER O F LD. CIT(APPEALS) MORE SPECIFICALLY THE GROUNDS RAISED BEFORE THE LD. CIT(APPEALS) SHOWS THAT THE ASSESSEE HAS SPECIFICALLY MENTIONED THAT THE TRANSPORTER IS NOT A CONTRACTOR APPOINTED BY THE ASSESSEE BUT A CONTRACTOR APPOINTED BY THE SUPPLIER COMPANY FOR CARRYING GOODS AT THE OWNERS (SUPPLIERS) RISK AND INSURANCE TERMS TO THE DESTINATION AT KOLKATA. THE SUPPLIER IS A CONSIGNOR WHO IS SENDING HIS GOODS THROUGH HIS LORRY CONTRACTOR TO THE ASSESSEE - COMPANY, THE CONSIGNEE. THE ASSESSEE - COMPANY IS NO WAY CONNE CTED TO THIS WHOLE OPERATION AND THE ASSESSEE CAME TO THE PICTURE WHEN THE GOODS WERE DELIVERED TO HIM AND THEREAFTER HE BECAME THE OWNER OF THE GOODS. ONCE THIS SUBMISSION OF THE ASSESSEE IS CONSIDERED, THEN IT BECOMES QUITE EVIDENT THAT THE PAYMENT OF TH E TRANSPORT COST BECOMES PART OF THE COST OF PURCHASES OF THE ASSESSEE. THIS IS IN VIEW OF THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF INDIA METERS LIMITED VS. - STATE OF TAMILNADU IN CIVIL APPEAL NO. 1032 - 33 OF 2003 DATED 07.09.2010 WHEREIN THE HON BLE SUPREME COURT HAS HELD THAT IF THE OWNERSHIP IN THE GOODS GETS TRANSFERRED AT THE PREMISES OF THE BUYER AND THE SUPPLIER HAS THE OBLIGATION OF TRANSPORTING THE GOODS TO THE PREMISES OF THE BUYER, THEN NOTWITHSTANDING THE FACT THAT THE FREIGHT CHARGES WERE RECOVERED SEPARATELY FROM THE BUYER, THE TRANSPORTATION CHARGES SHALL FORM PART OF TURNOVER OF THE SUPPLIER, I.E. COST OF I.T.A. NO . 2 2 6 9 / KOL ./201 4 ASSESSMENT YEAR: 200 6 - 20 0 7 PAGE 3 OF 3 PURCHASES FOR THE BUYER . ONCE THIS IS SO, THEN ADMITTEDLY THE PROVISIONS OF TDS IN RESPECT OF THE SAME WOULD NOT APPLY. IN THESE CIRCUMSTANCES, RESPECTFULLY APPLYING THE PRINCIPLES LAID DOWN BY THE HON BLE SUPREME COURT IN THE CASE OF INDIA METERS LIMITED, THE DISALLOWANCE AS MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE LD. CIT(APPEALS) BY INVOKING THE PROVISIONS O F SECTION 40(A)(IA) OF THE ACT STANDS DELETED . IN THESE CIRCUMSTANCES, ON IDENTICAL REASONS THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE LD. CIT(APPEALS) STANDS DELETED. 5 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 6 TH FEBRUARY , 201 5 . SD/ - GEORGE MATHAN ( JUDICIAL MEMBER) KOLKATA, THE 2 6 TH D AY OF FEBRUARY , 201 5 COPIES TO : (1) M/S. DESAI TRADING (AGENCY), RAM BANDHUTALA, G.T. ROAD EAST, ASANSOL - 713 303 (2) INCOME TAX OFFICER, WARD - 2(4), ASANSOL, ASANSOL - 713 304 (3) COMMISSIONER OF INCOME - T AX (APPEALS) (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S .