Vansh Project Services, Kolkata V. ITO,(TDS) 3(3), Kolkata, Kolkata

ITA 2297/KOL/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 0875 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 05-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHERJEE
• Assessee Lawyers: K K GOSWAMI
• Section: 194C; 201(1)

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. 2297 / KOL / 20 16 ASSESSMENT YEAR :2007-08 VANSH PROJECT SERVICES, 73, PURNA DAS ROAD, KOLKATA-29 [ PAN NO.AADFV 9729 L ] V/S . INCOME TAX OFFICER (TDS) WARD-3(3), 10B, MIDDLETON ROW, KOLKATA-71 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI K.K. GOSWAMI, ADVOCATE /BY RESPONDENT SHRI A. BHATTACHERJEE, ADDL. CIT-DR /DATE OF HEARING 09-07-2018 /DATE OF PRONOUNCEMENT -10-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2007-08 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-24, KOLKATAS ORDER DATED 24.11.2015, PASSED IN CASE NO.659/CIT(A)-24/KOL/2011-12, IN PRO CEEDINGS U/S. 201(1)/201(1A) OF THE INCOME TAX ACT, 1961; IN SHOR T THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE GROUND PLEADED I N THE INSTANT APPEAL CHALLENGES CORRECTNESS OF THE CIT(A)S ACTION PARTL Y AFFIRMING THE ASSESSING AUTHORITYS FINDINGS HOLDING IT TO BE AN ASSESSEE IN DEFAULT FOR SHORT DEDUCTION OF TDS OF 9,48,336/- ALONG WITH INTEREST OF 4,55,207;TOTALLING TO 14,03,527/-; RESPECTIVELY 201(1) & 201(1A) AS FOLLO WS:- 4. THE AO HAS RECORD THE SHORT DEDUCTION OF TAX US . 194I OF R.9,48,336/ AND INTEREST THEREON OF RS.4,55,207/- AGGREGATING TO RS.14,03,53 7/-. THE ORDER WAS PASSED EX- PARTE AS THE APPELLANT DID NOT RESPOND TO THE AO'S NOTICE. IN APPEAL THE GROUNDS HAVE BEEN RAISED AGAINST THE SAID LEVY OF TAX AND INTERE ST. THE SUBMISSIONS CONTAINED IN SOF ENCLOSED TO FORM NO.35 ON THE POINT IS AS UNDER :- ITA NO.2297/K/2016 A.Y. 2007-0 8 VANSH PROJECT SERVICES VS. ITO (TDS) WD 3(3), KOL. PAGE 2 AS THE COMPOSITE AMOUNT IS PAID FOR HIRING THE MAC HINERY & SUPPLY OF MANPOWER AND THE SAME CANNOT BE SEGREGATED BY THE A SSESSEE, THE TDS CANNOT BE DEDUCTED ON THE WHOLE AMOUNT AND AS SUCH SECTION 194I IS NOT APPLICABLE. FURTHER THE ASSESSEE OBTAINS THE CONTRA CT FROM THE PRINCIPAL IN HIS PERSONAL CAPACITY AS A CONTRACTOR AND ENTERS CONTRA CTS WITH THE SUB- CONTRACTORS FOR CARRYING OUT THE WORK UNDERTAKEN BY HIM AND THE ASSESSEE IS SOLELY RESPONSIBLE FOR THE ACT COMMITTED BY HIM AND THE ASSESSEE IS SOLELY RESPONSIBLE FOR THE AFT COMMITTED BY HIM AND THE SU PPLIER OF MACHINERY & VEHICLES ARE NOT FASTENED WITH SUCH LIABILITY AND T HE INDIVIDUAL VEHICLE AND MACHINERY OWNERS ARE SIMPLE HIRER OF THE SAME AND AS SUCH THE SECTION 194C IS ALSO NOT APPLICABLE. WITHOUT PREJUDICE TO THE ABOVE THE TOTAL PAYMENT OF RS.42,26,099/- INCLUDES RS.2,58,099/- WHICH ARE LESS THAN RS.1,20,000/- IN EACH CASE ARE NOT ATTRACTED TO THE PROVISION OF SECTION 194I AND NO T DS IS REQUIRED TO BE DEDUCTED. WITHOUT PREJUDICE TO THE ABOVE THE RATE OF 22.44% W ORKED OUT FOR DEDUCTION OF TAX IS NOT APPLICABLE FOR PAYMENT MADE TO THE INDIV IDUALS AND HUFS WHICH AMOUNT TO RS.37,26,148/-. THE APPELLANT HAS SUBMITTED A CHART ACCORDING TO WH ICH MOST OF RS.42,26,099/- IS SHOWN AS HIRING CHARGES OF VEHICLE AND TRACTOR. SOM E OTHER CHARGES ARE SHOWN AGAINST DOZER, JCB AND MACHINERY CHARGES. THUS THE CLAIM OF THE APPELLANT THAT HIRING CHARGES OF MACHINERY, DOZERS AND TRACTOR BEI NG COMPOSITE ONE INCLUDING THE SUPPLY OF OPERATORS. SEC. 194I AND SEC. 194C CANNOT BE ATTRACTED, IS NOT CORRECT. MACHINES HAVE ADMITTEDLY BEEN HIRED AND CHARGES THE REFORE HAVE BEEN PAID BY THE APPELLANT. SMALL AMOUNTS ARE SHOWN AS TRANSPORT CHA RGES. BOTH FROM THE DETAILS IT IS QUITE APPARENT THAT THE AMOUNTS INVOLVED ARE SUBSTA NTIVE FOR HIRING OF VARIOUS MACHINES. BY WAY OF TRANSPORTATION CHARGES ONLY RS. 1,23,692/- IS SHOWN TO HAVE BEEN PAID IN ITS SUBMISSION DT. 17.07.2015. THUS TH E APPELLANTS CLAIM THAT SEC. 1941 IS NOT APPLICABLE IS NOT CORRECT. AS REGARDS PROVIS IONS U/S. 194C IT CAN BE SAID TO BE APPLICABLE ONLY TO A SMALL AMOUNT BEING RS.1,23,692 /- AS PER THE APPELLANTS OWN CLAIM VIDE THE SAID SUBMISSION. THE APPELLANTS CLAIM THAT EVEN SEC. 194C IS NOT AP PLICABLE IS ALSO FOUND NOT CORRECT. IN RESPECT OF SMALL AMOUNT OF TRANSPORTATION CHARGE S OF RS.1,23,692/- THE AO IS DIRECTED TO RECOMPUTE SHORTAGE OF TAX AND INTEREST THEREON. IN RESPECT OF BALANCE AMOUNT OUT OF RS.42,26,099/- THE APPELLANT SEEMS TO HAVE DEFAULTED AND THEREFORE LIABILITY FOR TAX AND INTEREST NEEDS TO BE COMPUTED . A BREAK UP HAS BEEN GIVEN BY THE APPELLANT VIDE ITS SUBMISSION DTD. 17.07.2015 AT PAGE NO.2 WHICH IS SUMMARIZED AS UNDER:- LESS THAN RS.1,20,000 AND/OR RS.50,000 : RS.2,58,0 99/- (WHERE NO TDS U/S194I IS REQUIRED TO BE DEDUCTED WITHOUT PREJUDICE TO ANYTHING ELSE STATED) INDIVIDUALS : RS.37,26,148/- FIRMS : RS. 2,41,852/- TOTAL : RS.42,26,099/[ THE AO IS DIRECTED TO VERIFY WHETHER THE PAYEES ARE INDIVIDUALS IN RESPECT OF PAYMENT AMOUNTING TO RS.37,26,148/- AS CLAIMED ABOVE. AO IS FURTHER DIRECTED TO VERIFY WHETHER PAYMENTS TO FIRMS ARE OF RS.2,41,852/- AND WHETHER PAYMENTS OF LESS THAN RS.,1,20,00/- AND/OR RS.50,000/- IN RESPECT OF SEC. 194I AND 194C HAS RIGHTLY BEEN CLAIMED AS ABOVE. THE AO IS THUS DIRECTED TO MODIFY THE ORDER U/S 201(1)/201(1A), DT. 21.03.2011 ACCORDING TO THE FINDINGS ON THE ABOVE P OINTS AND SOME AMOUNTS BEING LESS THAN RS.1,20,000/- AND/OR RS.50,000/- AND PAYM ENTS BEING TO INDIVIDUALS AND FIRMS AS ABOVE. IT IS REITERATED THAT THE GROUNDS O BJECTING TO THE APPLICATION OF SEC. 194I AND SEC. 194C ARE REJECTED. ON GROUNDS CONCERN ING PAYEES BEING ITA NO.2297/K/2016 A.Y. 2007-0 8 VANSH PROJECT SERVICES VS. ITO (TDS) WD 3(3), KOL. PAGE 3 INDIVIDUALS//HUFS, THE APPEAL ORDER IS TREATED AS P ARTLY ALLOWED FOR STATISTICAL PURPOSE A THE RATES HAVE TO BE REDUCED ACCORDING TO THE STA TUS OF THE RESIDENT AS MAY BE DETERMINED IN PURSUANCE OF THE ENQUIRY DIRECTED AS ABOVE. 3. SOME KEY FACTS EMERGE FROM THE INSTANT CASE FIL E. THERE IS NO DISPUTE EVEN AS PER ASSESSEES STAND THAT IT HAD ENTERED IN TO CONTRACT WITH ITS PRINCIPAL FOLLOWED BY ITS SUB-CONTRACTS WITH THE PAYEE PARTIE S. WE MAKE IT CLEAR THAT IT HAS NOT PLACED ON RECORD THE SAID SUB-CONTRACTS IND ICATING IT TO HAVE NOT PASSED OVER THE CORRESPONDING LIABILITIES TO THE PA YEES CONCERNED. WE MAKE IT CLEAR THAT SEC. 194C OF THE ACT IN ASSESSMENT YEAR 2007-08 QUESTION DULY APPLIED IN CASE OF SUB-CONTRACTUAL PAYMENTS AS WELL . COUPLED WITH THIS, THERE IS NO EVIDENCE MUCH LESS COGENT ONE ON RECORD WHICH COULD SUGGEST THAT PAYEES CONCERNED HAD THEMSELVES RETAINED ALL CONTRO L AND POSSESSION OF THE VEHICLES, TRACTORS, BULLDOZER, JCD AND OTHER MACHIN ERIES QUA SEC. 194I ISSUE. CASE FILE MAKES IT CLEAR THAT THE ASSESSING OFFICER HAS PASSED HIS CONSEQUENTIAL ORDER / RECEIVED ON 05.10.2016 REDUCI NG THE IMPUGNED DEMAND FROM 14,03,537/- TO 6,26,719/- ONLY. WE THEREFORE DO NOT SEE ANY MERIT IN ASSESSEES ABOVE SOLE SUBSTANTIVE GRIEVANCE IN THES E PECULIAR FACTS AND CIRCUMSTANCES. 4. THIS ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 05/10/2018 SD/- SD/- ( %) (' %) (DR. A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 05 / 10 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-VANSH PROJECT SERVICES, 73, PURNA DAS ROAD, KOLKATA-29 2. /RESPONDENT-ITO(TDS) WD-3(3), 10B, MIDDLETON ROW, KOLK ATA-71 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,