Shri Sushil Kumar Agarwal, Burdwan V. Income Tax Officer, Ward - 1(1), Asansol, Asansol

ITA 2480/KOL/2013

• Counselvise Citation: 248023514 RSA 2013
• Duration Of Justice: 1 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 24-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R AJINDRA PRASAD
• Assessee Lawyers: V N PUROHIT
• Section: 194C

Judgement Text

I.T.A. NO . 2 480 / KOL ./20 1 3 ASSESSMENT YEAR: 200 8 - 20 0 9 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI MAHAVIR SINGH , JUDICIAL MEMBER I.T.A. NO. 2 480 / KOL / 20 1 3 ASSESSMENT YEAR : 200 8 - 20 0 9 SHRI SUSHIL KUMAR AGARWAL, ............... ........ . APPELLANT PROP. JAGANNATH BISSES ARIAL, 51, R.R. ROAD, P.O. RANIGANJ, DIST. BURDWAN - 713 347 [PAN : A CGPA 1496 G ] - VS. - INCOME TAX OFFICER , ............................... . ...... ..... . RESPONDENT WARD - 1 ( 1 ), ASANSOL , SAHANA APARTMENT, LOWER CHELIDANGA, PO. ASANSOL - 713 304, DIST. BURDWAN . APPEARANCES BY: SHRI V.N. PUROHIT, FCA , FOR THE ASSESSEE S H RI R AJINDRA PRASAD JCIT, FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : JU LY 1 6 , 2 01 5 DATE OF PRONOUNCING THE ORDER : JU LY 30 , 201 5 O R D E R THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) , ASANSOL IN APPEAL NO. 1 4 8 / CIT(A) /ASL/WD - 1(1)/ASL/10 - 11 DATED 2 9 . 0 8 .20 1 3 FOR THE ASSESSMENT YEAR 200 8 - 0 9. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS IN REGARD TO DISALLOWANCE OF RS.737,71 3/ - UNDER SECTION 40(A)(IA) OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESESE IS ENGAGED IN THE BUSINESS OF TRADING OF VANASPATI, REFINE OIL, SOYA REFINE, MUSTARD OIL ETC. THE ASSESSEE PAID VARIOUS AMOUNTS ON DIFFERENT DATES TO MANY I.T.A. NO . 2 480 / KOL ./20 1 3 ASSESSMENT YEAR: 200 8 - 20 0 9 PAGE 2 OF 5 TRANSPORTE RS TOTALLING TO RS.737,713/ - . THE PAYMENT OF RS.737,713/ - WAS MADE TO THE FOLLOWING TRANSPORTERS: - SL. NO. NAME OF THE TRANSPORTER AMOUNT PAID 1. BHAGAT ENTERPRISE 1,08,000/ - 2. GUDDU TRANSPORT 1,37,150/ - 3. HIND ENTERPRISE 1,32,400/ - 4. RAJESH TRANSPO RT 2,70,937/ - 5. SRI RAM ROADWAYS 89,226/ - TOTAL AMOUNT PAID RS.7,37,713/ - AS PER THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER, THE ASSESSEE HAS STATED THAT THE PAYMENT OF RS.737,713/ - WAS MADE TO VARIOUS TRANSPORTERS DURING THE YEAR AND TDS UNDER SECTION 194C(2) WAS DULY DEDUCTED AND PAID. TDS OF RS.15,342/ - (2% OF RS.737,713/ - ) WAS PAID ON 19.05.2008. THE ASSESSING OFFICER HAS ALSO MENTIONED IN HIS ASSESSMENT ORDER THAT THE ASSESSEE HAS PRODUCED THE PROOF OF PAYMENT/CHALLAN OF RS.15,342/ - M ADE ON 19.05.2008. THE ASSESSING OFFICER DISALLOWED THE PAYMENT TO TRANSPORTERS OF RS.7,37,713/ - UNDER SECTION 40(A)(IA) OF THE ACT WITH THE FOLLOWING REASONS: - IT IS ALSO CLEAR FROM THE BALANCE SHEET THAT HAD HE DEDUCTED THE ABOVE AMOUNT OF TAX, THE SAME AMOUNT MUST HAVE BEEN REFLECTED IN THE BALANCE SHEET. IT MEANS THE TAX WAS DEDUCTED NOT WITHIN THE FINANCIAL YEAR UNDER CONSIDERATION BUT THE TAX WAS DEDUCTED IN THE SUBSEQUENT YEAR (I.E. AFTER THE DATE 31. 03.200 8) AND PAID THE TAX AMOUNT IN THE CENTRAL G OVT. ACCOUNT ON 19. 05.2008 AND THUS THE ABOVE AMOUNT OF RS. 7,37,713/ - SHALL NOT BE ALLOWED FOR DEDUCTION IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION U/S 4 9(A) (IA) OF THE I.T. ACT, 1961. THE DISCREPANCY AS DETECTED ABOVE WAS BROUGHT TO THE NOTICE OF THE A/R OF THE ASSESSEE AND HE WAS ASKED FOR EXPLANATION OF THE SAME. NO SATISFACTORY EXPLANATION FOR THE SAME COULD BE OFFERED BY THE ASSESSEE. HENCE) THE ENTIRE AMOUNT OF PAYMENT FOR TRANSPORT CONTRACT WHIC H COMES TO RS.7,37,713/ - IS DISALLOWED U/S 4 0 (A)(IA) OF THE I. T. ACT) 1961. FOR COMPUTATION PURPOSE , 100% OF TRANSPORTATION BEING RS. 7 , 37 , 713/ - IS ADDED BACK TO THE INCOME OF THE ASSESSEE THIS YEAR. INITIATE PENA L TY PROCEEDING U/S: 271C OF THE I. T . A C T' 1961 HAS BEEN INITIATED SEPARATE L Y . I.T.A. NO . 2 480 / KOL ./20 1 3 ASSESSMENT YEAR: 200 8 - 20 0 9 PAGE 3 OF 5 BEING AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(APPEALS) ON THE SAME GROUND. THE MAIN REASON FOR DISALLOWANCE OF RS.737,713/ - BY THE ASSESSING OFFICER WAS THAT THE ASSESSEE HAS NOT DEDUCTED THE TDS OF RS.15,342/ - DURING THE YEAR AT THE TIME OF PAYMENT/CREDIT AS REQUIRED UNDER SECTION 194C ( 2) OF THE ACT AND THE ASSESSING OFFICER DID NOT GIVE COGNIZANCE TO THE FACT THAT THE ASSESSEE HAS PAID THE TDS AMOUNT IN THE NEXT FINANCIAL YEAR ON 19.05.2008. 4. LD. CIT(APPEALS) CONFIRMED THE VIEW TAKEN BY THE ASSESSING OFFICER WITH THE FOLLOWING FINDING IN HIS ORDER: - 7. THE FOREGOING DISCUSSION AMPLIFIES THE FACT THAT APPELLANT ONLY HAD LIABILITY TO PAY TRANSPORTER. IT IS APPELLANT WHO RECORDED THE PAYMENT IN HIS BOOKS OF ACCOUNTS. THE BILL FOR TRANSPORTATION CHARGES RAISED BY TRANSPORTER ACCOMPANIED THE GOODS. THE PAYER TO TRANSPORTER IS APPELLANT HIMSELF. WHEN PAYMENT TO TRANSPORTER EXCEEDS AMOUNT SPECIFIED IN SECTION 194C, LIABILITY FOR TAX DEDUCTION AT SOUR CE ARISES. IN THIS CASE, TAX HAS NOT BEEN DEDUCTED UNDER SECTION 194C EVEN THOUGH THERE WAS LIABILITY TO DEDUCT. THE ASSESSING OFFICER WAS RIGHT IN EFFECTING THE DISALLOWANCE OF RS.737,713/ - . ACCORDINGLY I UPHOLD THE ADDITION MADE BY ASSESSING OFFICER OVER RULING THE CONTENTION OF THE APPELLANT THAT THE SUM PAID IS COST OF PURCHASE. GROUNDS 1 AND 2 STANDS DISMISSED . 5. BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME AL ONG WITH THE ORDERS OF TAX AUTHORITIES BELOW. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSESSEE HAS STATED BEFORE THE TRIBUNAL THAT THE TRANSPORTATION CHARGES PAID DURING THE YEAR ARE PART OF COST OF PURCHASES. IN A PURCHASE TRANSACTION REGARDING TRANSP ORTATION OF GOODS EITHER THE PURCHASER OR THE SELLER HAS TO BEAR THE COST. IN THE CASE OF THE ASSESSEE, THE PURCHASER HERE THE APPELLANT SPENT TRANSPORTATION CHARGES AND THE PAYMENT OF TRANSPORTATION CHARGES WAS RECORDED UNDER THE HEAD OF PURCHASES, AND TH E SELLER HAS NOT RAISED ANY BILL FOR TRANSPORTATION CHARGES. THEREFORE, NO SUM WAS PAYABLE TO THE SELLER. HOWEVER, THE I.T.A. NO . 2 480 / KOL ./20 1 3 ASSESSMENT YEAR: 200 8 - 20 0 9 PAGE 4 OF 5 ASSESSEE HAS DEPOSITED THE TDS AMOUNT CALCULATED AT THE RATE OF 2% ON THE TRANSPORTATION CHARGES OF RS.7,37,713/ - AT RS.15,342/ - WHICH WA S PAID ON 19.05.2008, WHICH IS DULY VERIFIABLE AND ACCEPTED BY THE ORDER OF THE ASSESSING OFFICER. IT IS A FACT THAT THE AMOUNT OF TDS WAS DEPOSITED ON 19.05.2008 I.E. BEFORE THE DUE DATE OF FILING OF RETURN UNDER SECTION 139(1) OF THE ACT. THIS ISSUE IS C OVERED BY THE DECISION OF THE HON BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. - VIRGIN CREATIONS IN ITAT NO.302 OF 2011, GA NO. 3200/2011 DATED 23.11.2011, WHEREIN EVEN AMENDMENT MADE BY THE FINANCE ACT 2010 IN SECTION 40(A)(IA) OF THE ACT IS HELD TO B E RETROSPECTIVE. HON BLE HIGH COURT HELD AS UNDER: WE HAVE HEARD MR. NIZAMUDDIN AND GONE THROUGH THE IMPUGNED JUDGMENT AND ORDER. WE HAVE ALSO EXAMINED THE POINT FORMULATED FOR WHICH THE PRESENT APPEAL IS SOUGHT TO BE ADMITTED. IT IS ARGUED BY MR. NIZAM UDDIN THAT THIS COURT NEEDS TO TAKE DECISION AS TO WHETHER SECTION 40(A)(IA) IS HAVING RETROSPECTIVE OPERATION OR NOT. THE LEARNED TRIBUNAL ON FACT FOUND THAT THE ASSESSEE HAD DEDUCTED TAX AT SOURCE FROM THE PAID CHARGES BETWEEN THE PERIOD APRIL 1, 2005 A ND APRIL 28, 2006 AND THE SAME WERE PAID BY THE ASSESSEE IN JULY AND AUGUST 2006, I.E. WELL BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. THIS FACTUAL POSITION WAS UNDISPUTED. MOREOVER, THE SUPREME COURT, AS HAS B EEN RECORDED BY THE LEARNED TRIBUNAL, IN THE CASE OF ALLIED MOTORS PVT. LTD. AND ALSO IN THE CASE OF ALOM EXTUSIONS LTD., HAS ALREADY DECIDED THAT THE AFORESAID PROVISION HAS RETROSPECTIVE APPLICATION. AGAIN, IN THE CASE REPORTED IN 82 ITR 570, THE SUPREME COURT HELD THAT THE PROVISION, WHICH HAS INSERTED THE REMEDY TO MAKE THE PROVISION WORKABLE, REQUIRES TO BE TREATED WITH RETROSPECTIVE OPERATION SO THAT REASONABLE DEDUCTION CAN BE GIVEN TO THE SECTION AS WELL. IN VIEW OF THE AUTHORITATIVE PRONOUNCEMENT O F THE SUPREME COURT, THIS COURT CANNOT DECIDE OTHERWISE. HENCE WE DISMISS THE APPEAL WITHOUT ANY ORDER AS TO COSTS. AS THE ISSUE IS COVERED BY THE DECISION OF THE HON BLE CALCUTTA HIGH COURT IN FAVOUR OF THE ASSESSEE, THE APPEAL OF THE ASSESSEE IS ALLOWED . 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE S TANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON JU LY 30 , 201 5 . SD/ - MAHAVIR SINGH ( JUDICIAL MEMBER) KOLKATA, THE 30 TH D AY OF JU L Y , 201 5 I.T.A. NO . 2 480 / KOL ./20 1 3 ASSESSMENT YEAR: 200 8 - 20 0 9 PAGE 5 OF 5 COPIES TO : (1) SHRI SUSHIL KUMAR AGARWAL, PROP. JAGANNATH BISSESARIAL, 51, R.R. ROAD, P.O. RANIGANJ, DIST. BURDWAN - 713 347 (2) INCOME TAX OFFICER, WARD - 1(1), ASANSOL, SAHANA APARTMENT, LOWER CHELIDANGA, PO. ASANSOL - 713 304, DIST. BURDW AN. (3) COMMISSIONER OF INCOME - TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR I NCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S .