I.T.O Wd - 56(3),kolkata, Kolkata V. M/s Bhagwati Construction Co., Kolkata

ITA 228/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100007 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 11-09-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 01-02-2013
• Court: TRIBUNAL
• Department Lawyers: AMITABHA ROY
• Assessee Lawyers: VIKASH SINGH
• Keywords: Retrospective amendment
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI M. BALAGANES H, AM] I.T.A NO. 228/KOL/2013 ASSESSMENT YEAR: 2007-08 INCOME-TAX OFFICER, WD-56(3), KOLKATA. VS. M/S. BHAGWATI CONSTRUCTION CO. (PAN: AAFFB7764B) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 05.11.2015 DATE OF PRONOUNCEMENT: 13.11.2015 FOR THE APPELLANT: SHRI AMITABHA ROY, JCIT FOR THE RESPONDENT: SHRI VIKASH SINGH, ADVOCATE ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XXXVI, KOLKATA IN APPEAL NO.862/CIT(A)-XXXVI/KOL/WD-56(3)/SET ASIDE/0 9-10/1624 DATED 19.11.2012. ASSESSMENT WAS FRAMED BY ITO, WD-56(3), KOLKATA U/S . 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASS ESSMENT YEAR 2007-08 VIDE HIS ORDER DATED 23.12.2009. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING DISALLOWANCE MADE BY AO ON ACCOUNT OF HIRE CHARGES PAID TO EIGHT PARTIES WITHOUT DEDUCTION OF TDS 194C OF THE ACT BY INVOKING PROVIS IONS OF SECTION 40(A)(IA) OF THE ACT. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORT CONTRACT AND DOING BUSINESS WITH ROONGTA MINES ON CONTRACT BASIS FOR T RANSPORTING IRON ORE FROM MINES TO OTHER PLACES BY PLYING THEIR OWN VEHICLES AND ALSO HIRED VEHICLES. THE ASSESSEE FILED DETAILS OF HIRING CHARGES PAID TO EIGHT PARTIES AT RS.31,00,907/-, WHICH ARE HIT BY THE PROVISIONS OF SECTION 194C OF THE ACT. AS THE ASSE SSEE FAILED TO DEDUCT TDS ON THE ABOVE, AO MADE DISALLOWANCE BY INVOKING THE PROVISI ONS OF SECTION 40(A)(IA) OF THE ACT. 4. WE FIND THAT THE CIT(A) DELETED THE DISALLOWANCE BY FOLLOWING THE DECISION OF ITAT, SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORT LTD. VS. ACIT, ITA NO. 477/VIZAG/2008 BEING ONLY PAID AMOUNT AT RS.29, 76,599/- AND RESTRICTED THE 2 ITA NO.228/K/2013 M/S. BHAGWATI CONSTN. CO. AY 2007-08 DISALLOWANCE TO PAYMENT AMOUNT OF RS.1,24,308/-. W E ALSO FIND THAT NOW ITAT SPECIAL BENCH DECISION IN THE CASE OF MERILYN SHIPPING & TR ANSPORT LTD., SUPRA HAS BEEN REVERSED BY HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT V. CRESCENT EXPORTS SYNDICATE (2013) 216 TAXMAN 258 (CAL), WHEREIN IT H AS BEEN HELD THAT THE DISALLOWANCE IS TO BE APPLICABLE TO ALL THE PAYMENTS WHETHER PAID O R PAYABLE. HENCE, THIS ISSUE IS NOW COVERED AGAINST ASSESSEE AND IN FAVOUR OF REVENUE. ACCORDINGLY, THIS ISSUE OF REVENUES APPEAL IS ALLOWED. 5. ALTERNATIVELY, LD. COUNSEL FOR THE ASSESSEE ARGU ED THAT LET THE ISSUE BE SET ASIDE TO THE FILE OF AO FOR EXAMINATION OF THE STATUS OF REC IPIENTS WHETHER THEY HAVE INCLUDED THE INCOME IN THEIR HANDS AND PAID TAXES ON THE SAME AN D ACCORDINGLY, IT CAN BE VERIFIED. ACCORDING TO LD. COUNSEL, ASSESSEE IS READY TO FILE REQUISITE DETAILS IN THIS RESPECT. FOR THIS, HE PLACED RELIANCE ON DECISION OF HONBLE DEL HI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD., ITA NOS. 160 & 1 61/KOL/2015, WHEREIN IT HAS BEEN HELD AS UNDER: NO S. 40(A)(IA) DISALLOWANCE FOR FAILURE TO DEDUCT TDS ON PAYMENT IF PAYEE HAS OFFERED AMOUNT TO TAX. SECOND PROVISO TO S. 40(A)(I A) INSERTED BY FINANCE ACT 2013 W.E.F. 1.4.2013 SHOULD BE TREATED AS CURATIVE AND T O HAVE RETROSPECTIVE EFFECT FROM 1.4.2005. ITAT PRAISED FOR 'THOROUGH ANALYSIS' OF T HE PROVISION 6. ON QUERY FROM THE BENCH LD. SR. DR FAIRLY CONCED ED THAT YES, THE ISSUE CAN BE REMITTED BACK TO THE FILE OF THE AO TO DECIDE IN TE RMS OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ANSAL LAND MARK TOWNSHIP (P) LTD., SUPRA. ACCORDINGLY, WE DECIDE THIS APPEAL IN FAVOUR OF REVENUE AND AGAINST THE ASSESSEE BUT THE ALTERNATIVE ISSUE IS ACCEPTED AND THE FILE IS REMITTED BACK TO THE FI LE OF AO. 7. IN THE RESULT, THE APPEAL OF REVENUE IS ALLOWED AS INDICATED ABOVE. 8. ORDER IS PRONOUNCED IN THE OPEN COURT ON 13.11.2 015 SD/- SD/- (M. BALAGANESH) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13TH NOVEMBER, 2015 JD. SR. P.S 3 ITA NO.228/K/2013 M/S. BHAGWATI CONSTN. CO. AY 2007-08 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT ITO, WARD-56(3), KOLKATA. 2 RESPONDENT M/S. BHAGWATI CONSTRUCTION CO. P-41, P RINCEP STREET, KOL- 700072. 3 . THE CIT(A), KOLKATA 4. 5. CIT KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .