ACIT, Pune V. Shri Suhas N Jangle, Pune

ITA 2360/PUN/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76046 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 29-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Assessee Lawyers: ASHOK DIGHE
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE: SHRI G. S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 23 60 /PN/20 12 ASSESSMENT YEAR : 2009 - 10 ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 3, PUNE VS. SHRI SUHAS N. JANGLE, 2/6, SHUBHMANGAL SOCIETY, S.B. ROAD, SHIVAJI NAGAR, PUNE (APPELLANT) (RESPONDENT) PAN NO. AAPPJ9128F APPELLANT BY: SHRI P.L. PATHADE RESPONDENT BY: SHRI ASHOK DIGHE DATE OF HEARING : 02 - 01 - 2014 DATE OF PRONOUNCEMENT : 17 - 01 - 2014 ORDER P ER R.S. PADVEKAR , JM : - IN THIS APPEAL , THE REVENUE HAS CHALLENG ED THE IMPUGNED ORDER OF THE LD. CIT(A) - II, PUNE DATED 16 - 07 - 2012 F OR THE A.Y. 2009 - 10. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS IN THE APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF RS.21,92,407/ - MADE U/S. 40(A)(IA) OF THE INCOME TAX ACT, 1961 EVEN THOUGH THE TAX WAS DEDUCTED AT A RATE LOWER THAN THE RATE PRESCRIBED AS PER CHAPTER XVII - B OF THE ACT. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT APPRECIATING THAT THE WORDS ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII - B AND SUCH TAX HAS NOT BEEN DEDUCTED . IN SECTION 40(A)(IA) OF THE ACT NECESSARILY MEANS TAX DEDUCTIBLE AS PER PRESCRIBED RATE. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT APPRECIATING THAT THE DEDUCTION OF TAX AT LOWER THAN PRESCRIBED RATE WITHOUT A CERTIFICATE FROM THE ASSESSING OFFICER WOULD AMOUNT TO .SUCH TAX HAS NOT BEEN DEDUCTED WITHIN THE MEANING OF SECTION 40(A)(IA) OF THE ACT. 2 ITA N O. 23 60 /PN/2012, SHRI SUHAS N. JANGLE, PUNE 2. THE BRIEFLY STATED FACTS ARE UNDER. THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF LABOUR CONTRACTS UNDER THE NAME AND STYLE AS M/S. S J CONSTRUCTIONS. THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 3,79,66,409/ - . SUBSEQUENTLY, THE ASSESSEE REVISED THE RETURN DECLARING INCOME OF RS.4,54,66,409/ - . THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT HAS BEEN COMPLETED U/S. 143(3) OF THE INCOME - TAX ACT. IT WAS NO TICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS DEBITED HIRE CHARGES AMOUNTING TO RS.21,92,407/ - AND HAD DEDUCTED TAX AT SOURCE (TDS) U/S. 194C AT THE RATE OF 1.123%. IN THE OPINION OF THE ASSESSING OFFICER THE ASSESSEE OUGHT TO HAVE DEDUCTED TDS AT THE RATE OF 10% FOR THE REASONS GIVEN IN THE ASSESSMENT ORDER AND IN CONSEQUENCE THE ASSESSING OFFICER IN VOKED THE PROVISIONS OF SEC.40(A)(IA) OF THE I.T. ACT A ND MADE THE ENTIRE DISALLOWANCE OF THE HIRE CHARGES TO THE EXTENT OF RS.21,92,407/ - AND MADE THE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT(A) AND LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE. NOW THE REVENUE IS IN APPEAL BEFORE US. 3 . WE HAVE HEARD THE PARTIES. ADMITTEDLY, IN THE PRESENT CASE THE DISPUTE RAISED BY THE ASSESSING OFFICER WAS IN RESPECT OF THE NATURE OF THE PAYMENT AS WELL AS THE RATE AT WHICH THE TDS WAS REQUIRED TO BE MADE. IN THE OPINION OF THE ASSESSING OFFICER THE ASSESSEE SHOULD HAVE DEDUCTED THE TAX AT SOURCE AT THE RATE OF 10% INSTEAD OF 1.123% WHICH HAS BEEN DEDUCTED BY THE ASSESSE. 4. IN SUM AND SUBSTANCE THE CONTROVERSY IS WHETHER THE ASSESSEE OUGHT TO HAVE DEDUCTED THE TAX AT 10% OR 1.123% . O N THE PERUSAL OF THE ASSESSMENT ORDER , W E FIND THAT THERE IS NO DISC USSION BUT VERY CRYPTIC REASONS ARE GIVEN AND THE ASSESSING OFFICER MADE THE DISALLOWANCE. WE FIND THAT THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE FOLLOWING DECISIONS OF THE CO - ORDINATE BENCHES (I) DCIT VS. S.K. TEKRIWAL (2011) 48 SOT 515 (CAL.) AND (II) DCIT VS. CHANDABHOY AND 3 ITA N O. 23 60 /PN/2012, SHRI SUHAS N. JANGLE, PUNE JASSOBHAY (2012) 49 SOT 448 (MUM.). AS THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE CO - ORDINATE BENCHES CITED (SUPRA) , HENCE NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD. CIT(A) . WE MAKE IT CLEAR THAT EVEN THOUGH THE CIT(A) HAS REFERRED TO THE DECISION OF THE SPECIAL BENCH OF THE ITAT IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS VS. ADDL. CIT, (2012) 70 DTR (VISAKHA) (SB) (TRIB) 81 BUT IN OUR OPINION THAT IS IN THE DIFFERENT CONTEXT AND WE ARE CONFIRMING THE ORDER OF THE LD. CIT(A) ON THE REASONS THAT WHEN THERE IS A SHORT DEDUCTION OF TAX AND IF THERE IS A DISPUTE IN RESPECT OF THE RATE OF TAX @ WHICH THE TDS IS TO BE MADE U/S. 40(A)(IA) OF THE ACT CANNOT BE EVOKED AND T HIS V IEW IS SUPPORTED BY THE OTHER CO - ORDINATE BENCH ALSO. IN OUR OPINION, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD. CIT(A). ACCORDINGLY, SAME IS CONFIRM AND GROUNDS TAKEN BY THE REVENUE ARE DISMISS. 5. IN RESULT, THE REVENUES APPEAL IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 17 - 01 - 201 4 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 17 TH JANUARY, 2014 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 T HE CIT(A) - II, PUNE 4 THE CIT - II, PUNE 5 THE DR, ITAT, A BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE