Shri Sandeep Bansal (Individual), Ballabgarh V. ACIT, Faridabad

ITA 2294/DEL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8081 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 28-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR GUPTA SHRI N K
• Keywords: TDS
• Section: 40A(3)

Judgement Text

~ 1 ~ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMLE, JUDICIAL MEMBER ITA NO.2294/DEL/2016 ASSESSMENT YEAR:2008-09 SHRI SANDEEP BANSAL, PROP M/S BANSAL STEEL TRADERS, B-612-613, NEHRU GROUND, NIT FARIDABAD. PAN:ADZPB 6372 N VS. A.C.I.T., CIRCLE-II, FARIDABAD. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LEARNED CIT(A), FARIDABAD DATED 16/02/2016 PERTAINING TO AS SESSMENT YEAR 2008- 2009. IN THIS APPEAL THE ASSESSEE HAS RAISED THE F OLLOWING GROUNDS: 1. THAT THE APPELLANT MADE PAYMENT OF FREIGHT RS.65,295=00 TO TWO PARTIES [RS.14,978=00 AND RS.45,917=00], THEREFORE, THE PROVISIONS OF SECTION 40 [A] [IA] OF THE I.T. ACT FOR DISALLOWANCE OF THESE EXPENSES HAVE BEEN WRONGLY APPLIED IN THE PRESENT CASE. 2. THAT IN THE ASSESSMENT ORDER IT HAS BEEN FOUND T HAT THE APPELLANT HAS MADE PAYMENTS OF FREIGHT EXCEEDIN G RS.20,000=00 IN A DAY TO ONE PERSON [TOTAL RS.4,00, 237=00] . SUCH A FINDING IS INCORRECT AS NO PAYMENT EXCEEDING RS.20,000=00 HAS BEEN MADE IN A DAY TO ONE PERSON, AS SUCH, THE PROVISIONS OF SECTION 43A[3] OF I.T. ACT HAVE BEEN WRONGLY APPLIED IN THE PRESENT CASE. APPELLANT BY SHRI VIJAY KUMAR GUPTA, ADVOCATE RESPONDENT BY SHRI N. K. BANSAL, SR. D.R. DATE OF HEARING 09/04/2019 DATE OF PRONOUNCEMENT 12/04/2019 ~ 2 ~ 3. THAT THE EXPENSES RS.14,000=00 ON ACCOUNT OF REPLACEMENT OF BATTERIES IN INVERTER USED FOR THE P URPOSES OF BUSINESS PREMISES HAVE BEEN DISALLOWED ON WHIMSICAL GROUND THAT THE SAID INVERTER WAS NOT PART OF ASSETS IN TH E BALANCE SHEET. 4. THAT ON APPEAL THE LD. CIT [A] HAS DECIDED ISSUE S INVOLVED IN APPEAL IN A UNIQUE WAY AND THAT ALSO EV EN WITHOUT APPLICATION OF HIS MIND AS UNDER : 'THE SUBMISSIONS OF THE LD. AR ON THIS ISSUE DURING THE COURSE OF APPELLATE PROCEEDINGS ARE IDENTICAL TO TH E SUBMISSIONS MADE BY THE APPELLANT BEFORE THE AO. NO FRESH EVIDENCES / ARGUMENTS HAVE BEEN MADE BY THE APPELLANT DURING THE APPELLATE PROCEEDINGS. SINCE A LL THE ARGUMENTS AND EVIDENCES DURING THE COURSE OF APPELL ATE PROCEEDINGS ARE PART OF THE ASSESSMENT ORDER AND HA VE BEEN CONSIDERED BY THE AO IN HIS ASSESSMENT ORDER, I FIND NO REASON TO INTERFERE WITH THE ORDER OF THE A O AND THIS ADDITION MADE BY THE AO IS ALSO CONFIRMED. ' THE DECISION ON ISSUES INVOLVED IN APPEAL IN THIS M ANNER IS AGAINST ALL SETTLED PRINCIPLES OF LAW ON THE SUBJEC T. 2. AT THE OUTSET, LEARNED A.R. SUBMITTED THAT ASSES SING OFFICER HAD WRONGLY MADE A DISALLOWANCE OF RS.65,295/- BY HOLDI NG THAT THE TAX WAS REQUIRED TO BE DEDUCTED. LEARNED A.R. IN THIS RESP ECT SUBMITTED THAT IN FACT THE PAYMENT OF FREIGHT WAS MADE TO TWO PARTIES NAMELY M/S BALAJI TRANSPORT CO. HISSAR AND M/S BALAJI TRANSPORT CO. K ALA-AMB. IN THIS RESPECT LEARNED A.R. INVITED OUR ATTENTION TO THE C OPY OF LEDGER ACCOUNT OF THESE TWO COMPANIES APPEARING AT PAGES 1 AND 3 OF T HE PAPER BOOK WHEREIN THE AMOUNT OF RS.45,917/- AND RS.14,978/- H AS BEEN CREDITED SEPARATELY IN TWO ACCOUNTS. LEARNED A.R. ALSO TOOK US TO PAGES 2 AND 4 OF THE PAPER BOOK WHERE THE GRS ISSUED BY THE TWO PART IES WAS PLACED. LEARNED A.R. SUBMITTED THAT THESE WERE TWO DIFFEREN T PARTIES AND AUTHORITIES BELOW HAVE WRONGLY HELD TO BE ONE PARTY AND THEREFORE, HAVE HELD THAT TDS WAS REQUIRED TO BE DEDUCTED AS THE AM OUNT OF FREIGHT EXCEEDED RS.50,000/-. ~ 3 ~ 3. ARGUING NEXT GROUND OF APPEAL, LEARNED A.R. SUBM ITTED THAT THE ASSESSING OFFICER HAS MADE DISALLOWANCE U/S 40A(3) OF THE ACT BY HOLDING THAT THE PAYMENTS MADE BY THE ASSESSEE TO PARTICULA R PERSON EXCEEDED RS.20,K000/- WHEREAS THE FACT REMAINS THAT NONE OF THE PAYMENTS EXCEEDED RS.20,000/- AND IN THIS RESPECT OUR ATTENT ION WAS INVITED TO PAGES 8 TO 13 OF THE PAPER BOOK WHERE COPY OF ACCOU NT OF THESE TRANSPORTERS WAS PLACED. LEARNED A.R. SUBMITTED TH AT AUTHORITIES BELOW HAVE ASSUMED THAT ASSESSEE MUST HAVE PAID PAYMENTS EXCEEDING RS.20,000/- AND IN THE ACCOUNTS HAD SHOWN THE SAME BY SPLITTING THE SAME INTO TWO OR MORE. LEARNED A.R. SUBMITTED THAT THE PROVISIONS OF SECTION 40A(3) WERE AMENDED WITH EFFECT FROM 01/04/2009 WHE REBY THE AGGREGATE OF PAYMENT EXCEEDING RS.20,000/- IN A DAY HAS TO BE CONSIDERED AND BEFORE AMENDMENT OF THIS SECTION, THE DISALLOWANCE WAS ONLY IF THE INDIVIDUAL PAYMENT EXCEEDED RS.20,000/-. 4. LEARNED D.R., ON THE OTHER HAND, SUBMITTED THAT NO EVIDENCE OF THESE TWO SEPARATE ENTITIES WAS FILED WITH THE AUTH ORITIES BELOW. HE SUBMITTED THAT IF THE OFFICE OF A TRANSPORT COMPANY IS SITUATED AT MORE THAN ONE PLACE, THAT DOES NOT MEAN THAT TWO PARTIES ARE DIFFERENT. HE SUBMITTED THAT IN THE FR THERE WAS NO MENTION OF PAN AND SERV ICE TAX NUMBER AND THEREFORE, AUTHORITIES BELOW HAVE RIGHTLY HELD THE PAYMENT TO BE A SINGLE PARTY INSTEAD OF TWO. 4.1 AS REGARDS THE OTHER ISSUE U/S 40A(3), LEARNED D.R. SUBMITTED THAT IT IS NOT POSSIBLE FOR A TRANSPORTER TO GET THE PAYMEN T OF FREIGHT ON MORE THAN ONE OCCASION AS ON THE DELIVERY OF GOODS A TRUCK OP ERATOR IMMEDIATELY REQUIRES HIS PAYMENT AND DOES NOT WAIT FOR ANOTHER DAY FOR COLLECTION OF THE REMAINING AMOUNT. IT WAS ARGUED THAT ASSESSEE HAD DELIBERATELY SPLIT THE PAYMENTS MAKING A SINGLE PAYMENT LESS THAN RS.20,00 0/- WHEREAS IN FACT THE PAYMENT EXCEEDED RS.20,000/- WHICH THE ASSESSEE HAD WRONGLY RECORDED IN THE BOOKS OF ACCOUNT. ~ 4 ~ 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ASSESSEE HAD M ADE PAYMENTS OF RS.14,978/- AND RS.45,917/- ON ACCOUNT OF PAYMENT O F FREIGHT TO TWO DIFFERENT PARTIES, THE NAME OF WHICH HAPPENS TO BE SAME HOWEVER, THE ASSESSEE IS MAINTAINING SEPARATE LEDGER ACCOUNTS OF TWO PARTIES WHICH IS EVIDENT FROM PAGES 3 & 5 OF THE PAPER BOOK. MOREOV ER, WE FIND THAT THERE IS CONSIDERABLE DIFFERENCE BETWEEN THE GRS SUBMITTE D BY M/S BALAJI TRANSPORT CO. HISSAR AND M/S BALAJI TRANSPORT CO. K ALA-AMB. MOREOVER THE ADDRESS ON THE TWO FRS ARE DIFFERENT AND RATHER LATTER GR CONTAINS PAN OF THE TRANSPORTER ALSO. THEREFORE, FINDINGS O F THE AUTHORITIES BELOW THAT THE PAYMENTS WERE MADE TO A SINGLE PARTY ARE N OT CORRECT AND THEREFORE, GROUND NO. 1 OF THE APPEAL IS ALLOWED. 6. NOW COMING TO GROUND NO. 2, WE FIND THAT ASSESSI NG OFFICER HAD MADE ADDITION ON ACCOUNT OF VIOLATION OF SECTION 40 A(3) FOR PAYMENT TO SIX PARTIES, THE COPY OF LEDGER ACCOUNT OF WHICH ARE PL ACED AT PAGES 8 TO 13 OF THE PAPER BOOK. THE EXAMINATION OF LEDGER ACCOUNTS OF THESE PARTIES CLEARLY DEMONSTRATES THAT NONE OF THE PAYMENTS EXCE EDED RS.20,000/- EXCEPT PAYMENT OF RS.20,432/- AND RS.21,236/- TO PA NDEY TRAILER SERVICE, THE PAYMENT OF WHICH HAS BEEN MADE THROUGH CHEQUES. THEREFORE, WE REVERSE THE FINDINGS OF LEARNED CIT(A) ON THIS ISSU E AND ALLOW GROUND NO. 2 OF THE ASSESSEE. 7. GROUND NO. 3 OF THE APPEAL WAS NOT ARGUED BY LEA RNED A.R. THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 12/04/2019) SD/. SD/. (SUCHITRA KAMLE) ( T. S. KAPOOR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:12/04/2019 *SINGH ~ 5 ~ COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T.,