Shri Anilkumar Arjundas Sharda, Sabarkantha V. The Income Tax Officer, Ward-4, Sabarkantha

ITA 2425/AHD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85558 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 10-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD , LH LHLH LH BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. ITA. NO.2425/AHD/2013 (ASSESSMENT YEAR:2008-09) SHRI ANILKUMAR ARJUNDAS SHARDA PROP. OF GANESH COCONUT, X-9, OLD MARKET YARD, AT & POST MODSA, DIST. SABARKANTHA-383315 APPEL LANT VS. INCOME TAX OFFICER, WARD 4, MODSA RESPONDENT PAN: AFXPS4615R /BY APPELLANT : SHRI TEJ SHAH, A.R. /BY RESPONDENT : SHRI M. K. SINGH, SR. D.R. !' /DATE OF HEARING : 04.02.2015 #$% !' /DATE OF PRONOUNCEMENT : 06.02.2015 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-VIII, AHMEDABAD, DATED 14.08.2013 FOR A.Y. 2008-09 ON THE FOLLOWING GROUNDS: ITA NO. 2425/AHD/13 A.Y. 08-09 [SHRI ANILKUMAR ARJUNDAS SHARDA VS. ITO] PAGE 2 1. THE ID CIT (APPEALS) ERRED BOTH IN LAW AND ON F ACTS IN CONFIRMING ADDITION OF RS. 20,46,696/- MADE BY ID A.O. U/S 40 A (IA) OF I. T. ACT. 1961 FOR NON DEDUC TING THE TDS ON FREIGHT CHARGES PAID BY ASSESSES DURING THE F.Y. 2007-08 FOR PURCHASING COCONUT FROM SOUTH INDI A. THERE BEING NO CONTRACT ORAL OR WRITTEN WHEN GOODS WERE DISPATCHED BY OUTSTATION SUPPLIER ON HIS OWN DECISION WITHOUT ANY INSTRUCTION ABOUT TRANSPORTER, THERE WAS NO LIABILITY TO MAKE TDS. IT BE SO HELD N OW. 2. THE ID. CIT(APPEALS) ERRED IN LAW AND ON FACTS I N NOT APPRECIATING THAT THE ASSESSEE HAD NEVER SPLIT LORR Y RECEIPT INTO TWO PARTS, WHICH WAS UNILATERALLY PRESUMED BY LEARNED CIT (APPEALS) SINCE ONLY PAYMENTS ARE MADE ON .DIFFERENT DATES BELOW AMT. OF RS. 20,000/- BY TWO DIFFERENT VOUCHERS. AS THE ASSESSEE HAD NOT ENTERED INTO ANY ORAL OR WRITTEN CONTRACT WITH THE TRUCK OWNERS THE ERRONEOUS ADDITI ON OUGHT TO HAVE BEEN DELETED. IT BE DELETED. 3. THE ID CIT (APPEALS) ERRED IN LAW AND ON FACTS IN NOT FOLLOWING THE BINDING PRECEDENTS CITED BEFORE HIM A ND THE PROVISIONS OF SECTION 194C BEING NOT APPLICABLE THE ADDITION OF RS. 20.46,696/-U/S 40(A)(IA) BE DELETED . 4. BOTH THE LOWER AUTHORITIES ERRED IN LAW AND ON F ACTS IN NOT CONSIDERING THE PLEA, SUBMISSIONS AND CONTENTIO NS RAISED WHICH OUGHT TO HAVE BEEN CONSIDERED BEFORE PASSING THE ERRONEOUS ORDER. 2. ASSESSING OFFICER MADE ADDITION OF RS.20,72,500/ - ON ACCOUNT OF FREIGHT AND LABOUR CHARGES DUE TO NON DE DUCTION OF TDS U/S. 40(A)(IA) OF THE ACT. AS STATED ABOVE, TH AT DISALLOWANCE HAS BEEN MADE BY ASSESSING OFFICER AS ASSESSEE DID NOT DEDUCT TDS AND PAYMENT MADE TO VARIOUS TRUC K OWNERS ON ACCOUNT OF FREIGHT OF TRANSPORTATION OF C OCONUTS WHICH WERE RECEIVED FROM SOUTH INDIA. ASSESSING OF FICER WAS OF THE VIEW THAT SINCE EACH PAYMENT IS MORE THAN RS.20 ,000/- ITA NO. 2425/AHD/13 A.Y. 08-09 [SHRI ANILKUMAR ARJUNDAS SHARDA VS. ITO] PAGE 3 ASSESSEE SHOULD HAVE DEDUCTED TDS. STAND OF ASSESS EE HAS BEEN THAT THERE WAS NO ORAL OR WRITTEN CONTRACT WIT H TRUCK OWNERS. THEREFORE PROVISIONS OF SECTION 194C WERE N OT APPLICABLE. HE PRODUCED SOME COPIES OF PURCHASE BI LL AND TRANSPORT BILL WHICH REVEALS THAT TRANSPORTATION CH ARGES WERE MENTIONED BY SUPPLIER OF COCONUT IN THE BILL. IT I S NOT IN DISPUTE THAT TRANSPORT HAS NOT HIRED DIRECTLY BY AS SESSEE. TRUCKS WERE HIRED BY SELLER WHO USED TO SEND COCONU T TO ASSESSEE AND AS EACH BILL CONTAINED TRUCK NUMBER. THERE WAS DIRECTION TO ASSESSEE THAT CERTAIN AMOUNT SHOULD BE PAID TO TRUCK DRIVER ON ACCOUNT OF FREIGHT. IT IS NOT IS D ISPUTE WHILE ISSUING SALE INVOICE FOR COCONUTS THE SELLER ALSO U SED TO WRITE A LETTER TO ASSESSEE INFORMING THE DISPATCH OF COCONU TS. IT WAS ALSO INFORMED ASSESSEE THAT GOODS BEING DISPATCHED BY A PARTICULAR TRUCK NUMBER AND FREIGHT TO BE PAID TO T RUCK DRIVER WAS ALSO MENTIONED. THIS KIND OF PRACTICE OF SENDI NG GOODS BY SELLER AND FIXING FREIGHT TO BE PAID BY ASSESSEE IN DICATES THAT THERE MUST HAVE BEEN AN UNDERSTANDING BETWEEN ASSES SEE AND SELLER OF COCONUT REGARDING FREIGHT TO BE PAID. ON THIS PRESUMPTION, REVENUE AUTHORITIES DREW INFERENCE THA T THERE WAS ORAL CONTRACT BETWEEN TRANSPORTER AND ASSESSEE WHICH HAS BEEN ENGAGED THROUGH SELLER. WE FIND THAT AHMEDABA D D BENCH IN ITA NO. 3422/AHD/2008 FOR A.Y. 2005-06 IN CASE OF M/S. PRAMUKH JUTE TRADERS VS. ITO HAS HELD AS UNDER : 3. IT IS THE CONTENTION OF THE ASSESSEE THAT THE TRANSPORTERS WERE ENGAGED BY AGENTS IN CALCUTTA AND THE ASSESSEE WAS MERELY PAYING THE TRANSPORT CHARGES TO THEM AND THAT THERE WAS NO TRANSPORT CONTRACT BETWEEN TH E ASSESSEE AND THE TRANSPORTERS NAMED ABOVE. IT WAS T HEREFORE ITA NO. 2425/AHD/13 A.Y. 08-09 [SHRI ANILKUMAR ARJUNDAS SHARDA VS. ITO] PAGE 4 SUBMITTED THAT THERE WAS NO LIABILITY TO DEDUCT TAX UNDER SECTION 194C. WE FIND THAT THE CONTENTION IS CORREC T. AT PAGE 9 OF THE PAPER BOOK THE ASSESSEE HAS PLACED A COPY OF THE ACCOUNT OF BHARAT ROADLINES FOR THE PERIOD ENDE D 31-3- 2005 WHICH SHOWS THAT THERE WAS FOUR PAYMENTS AGGREGATING TO RS.1,27,408/-. THE BILLS OF BHARAT R OADLINES PLACED PAGES 11 TO 15 OF THE PAPER BOOK SHOW THE NA MES OF THE JUTE MILLS IN CALCUTTA FROM WHERE THE JUTE GOOD S WERE TRANSPORTED. FROM THESE BILLS IT APPEARS TO US THAT IT WAS THE JUTE MILLS WHICH ENGAGED THE TRANSPORTERS THROUGH A GENTS IN CALCUTTA AND THE ASSESSEE WAS REQUIRED TO PAY THE T RANSPORT CHARGES. THE MATERIAL ON RECORD DOES NOT SHOW THE E XISTENCE OF ANY TRANSPORT CONTRACT BETWEEN THE ASSESSEE AND THE TRANSPORTERS. THE SAME IS THE CASE WITH ROADCO (IND IA) CORPORATION, CALCUTTA TO WHOM THE ASSESSEE HAS PAID THE TRANSPORT CHARGES OF RS.44,792/-. THE BILLS AT PAGE S 18 AND 19 DO NOT SHOW THAT THERE WAS ANY CONTRACT FOR TRAN SPORT BETWEEN THE ASSESSEE AND THE TRANSPORTERS. THESE AR E SINGLE TRIPS. CIRCULAR NO.715 DATED 8-8-1995 ISSUED BY THE CBDT SHOWS THAT EACH GOODS RECEIPT CAN BE CONSIDERED TO BE A SEPARATE CONTRACT IF THE GOODS ARE TRANSPORTED AT O NE TIME. THIS REQUIREMENT IS SATISFIED AS CAN BE SEEN FROM T HE BILLS ISSUED BY THE TRANSPORTERS. THE ORDER OF THE MUMBAI BENCH OF THE TRIBUNAL IN CITY TRANSPORT CORPORATION VS. IT O DATED 12-9-2006 IN ITA NOS.7708 TO 7711/MUM/2003 (COPY PLACED AT PAGE 46 OF THE PAPER BOOK) AND THE JUDGME NT OF THE PUNJAB AND HARYANA HIGH COURT IN CIT VS. UNITED RICE LAND LIMITED DATED 12-5-2008 IN IT APPEAL NO.638 OF 2007 (COPY FILED AT PAGE 41 OF THE PAPER BOOK) SUPPORT T HE ASSESSEE'S CASE. IN THESE CIRCUMSTANCES WE HOLD THA T THE ASSESSEE WAS NOT LIABLE TO DEDUCT TAX UNDER SECTION 194C FROM THE TRANSPORT CHARGES. CONSEQUENTLY, SECTION 4 0(A)(IA) IS NOT ATTRACTED. THE TRANSPORT CHARGES OF RS.1,72, 200/- IS ACCORDINGLY DIRECTED TO BE ALLOWED. THE GROUNDS ARE ALLOWED. IN M/S. PRAMUKH JUTE TRADERS (SUPRA) TRANSPORTERS W ERE ENGAGED BY AGENT IN CALCUTTA AND ASSESSEE WAS MEREL Y PAYING TRANSPORT CHARGES TO THEM AND THERE WAS NO CONTRACT BETWEEN ASSESSEE AND TRANSPORTERS. IN CASE BEFORE US TRANS PORTER IS ITA NO. 2425/AHD/13 A.Y. 08-09 [SHRI ANILKUMAR ARJUNDAS SHARDA VS. ITO] PAGE 5 ENGAGED BY SELLER OF COCONUT AS DISCUSSED. IN FACT , SELLER WAS ENGAGING TRANSPORTERS AND ASSESSEE WAS MAKING PAYME NT TO TRANSPORTERS AS DIRECTED BY SELLER. THERE IS NOTHI NG ON RECORD TO SUGGEST THAT THERE IS EXISTENCE OF ANY TRANSPORT CONTRACT BETWEEN ASSESSEE AND TRANSPORTERS. IN THESE FACTS A ND CIRCUMSTANCES, WE HOLD THAT ASSESSEE WAS NOT LIABLE TO DEDUCT TDS U/S. 194C FOR TRANSPORTATION CHARGES PAID TO TR UCK OWNERS ENGAGED BY SELLER. SECONDLY, PROVISIONS OF SECTION 40(A)(IA) IS NOT ATTRACTED. IN VIEW OF THIS, ADDITION OF RS.20, 46,696/- U/S. 40(A)(IA) IS DIRECTED TO BE DELETED. 3. AS A RESULT, APPEAL FILED BY THE ASSESSEE IS ALL OWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 06 TH DAY OF FEBRUARY, 2015. SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER S.K.SINHA & & & & ' ' ' ' ('% ('% ('% ('% / COPY OF ORDER FORWARDED TO:- 1. +, / REVENUE 2. / ASSESSEE 3. // 0 / CONCERNED CIT 4. 0- / CIT (A) 5. '45 , , / DR, ITAT, AHMEDABAD 6. 589 :; / GUARD FILE. BY ORDER / & ,