Nandy Guha & Co., North 24 Parganas V. Income Tax Officer, Ward - 51(2), Kolkata, Kolkata

ITA 2540/KOL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83207 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 05-11-2013
• Court: TRIBUNAL
• Department Lawyers: K K TRIPATHI
• Assessee Lawyers: N O N E
• Section: 143(3); 194C

Judgement Text

, SM C , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH: KOLKATA ( ) BEFORE , ) [BEFORE SHRI MAHAVIR SINGH, JM] / I.T.A NO. 2 54 0 /KOL/20 1 3 / ASSESSMENT YEAR : 20 1 0 - 1 1 NANDY GUHA & CO. VS. INCOME - TAX OFFICER, WD - 5 1 ( 2 ) , KOLKATA (PAN:A A C F N2160N ) ( /APPELLANT ) ( / RESPONDENT ) DATE OF HEARING: 2 6 . 11 .201 4 DATE OF PRONOUNCEMENT: 28 . 1 1 .201 4 FOR THE APPELLANT : N O N E FOR THE RESPONDENT : SHRI K. K. TRIPATHI , JCIT, SR. DR / ORDER THIS APPEAL BY ASSESSEE IS ARI SING OUT OF ORDER OF CIT(A) - XXXII, KOLKATA IN APPEAL NO. 94 / XXXII/12 - 13/51(2)/KOL DATED 16 . 0 9 .201 3 . ASSESSMENT WAS FRAMED BY ITO, WARD - 5 1 ( 2 ) , KOLKATA U/S. 143(3) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) FOR ASSESSMENT YEAR 20 1 0 - 1 1 VIDE HIS ORDER DATED 2 4.0 1 .20 1 3 . 2 . THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE MADE BY AO ON ACCOUNT OF TRANSPORT PAYMENTS FOR HIRING OF VEHICLES FOR NON - DEDUCTION OF TDS AT SOURCE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF T HE ACT. 3. I HAVE HEARD LD. SR. DR AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY STATED FACTS ARE THAT THE AO DISALLOWED A SUM OF RS.2,94,350/ - BEING PAYMENT ON ACCOUNT OF TRANSPORT CHARGES MADE BY AO WITHOUT DEDUCTING TDS U/S. 194C REA D WITH SECTION 40(A)(IA) OF THE ACT. THE RELEVANT DETAILS OF PAYMENT ARE AS UNDER: VEHICLE NO. NUMBER OF DAYS RATE INCLUDING CARRIAGE AGGREGATE AMOUNT WB - 41C/8000 WB - 41B/8268 WB - 41D/4316 97 42 64 RS.1,450/ - RS.1,450/ - RS.1,450/ - TOTAL : RS.1,40,650/ - RS. 60,900/ - RS. 92,800/ - RS.2,94,350/ - ADMITTEDLY, ASSESSEE IS A TRANSPORTER AND THE ISSUE BEFORE AO WAS NON - DEDUCTION OF TDS ON TRANSPORT PAYMENTS FOR HIRING OF TRUCKS. I FIND THAT THERE IS ORAL C ONTRACT BETWEEN 2 ITA NO.2 54 0/K/2013 NANDY GUHA & CO. AY 20 1 0 - 1 1 ASSESSEE AND TRANSPORTER TO TRANSPORT THE GOODS AND TO DELIVER THE SAME SAFELY FOR A CONSIDERATION. THIS ORAL CONTRACT HAS ALREADY BEEN APPROVED BY HON BLE KARNATAKA HIGH COURT IN THE CASE OF SMT. J. RAMA VS. CIT (2010) 236 CTR 105 (KTK). THIS CASE HAS BEEN FOLLOWED BY HON BLE CALCUTTA HIGH COURT IN THE CASE OF ITO VS. MGB TRANSPORT IN ITA NO. 2280/KOL/2010 FOR AY 2007 - 08 DATED 15 TH MARCH, 2013, WHEREIN IT IS OBSERVED AS UNDER: WE FIND THAT THIS ISSUE IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF THE HON BLE KARNATAKA HIGH COURT IN THE CASE OF SMT. J. RAMA VS. - CIT (2010) 236 CTR (KAR.) 105, WHEREIN IT IS HELD THAT LAW DOES NOT STIPULATE THE EXISTENCE OF A WRITTEN CONTRACT AS A CONDITION PRECEDENT FOR INVOKING THE PROVISIONS OF S ECTION 194C OF THE ACT WITH RESPECT TO PAYMENT OF TDS . HON BLE KARNATAKA HIGH COURT CONCLUDED AS UNDER : - IN ORDER TO PROVIDE VEHICLES TO A CUSTOMER AS PER AGREEMENT, ASSESSEE USED TO HIRE VEHICLES FROM OTHERS AND HIRING OF VEHICLES BY THE ASSESSEE IS IN THE NATURE OF TRANSPORT CONTRACT AND HENCE, THE DISALLOWANCE UNDER SECTION 40(A)(IA) WAS JUSTIFIED WHEN NO TAX WAS DEDUCTED AT SOURCE FROM PAYMENTS MADE TO THOSE PERSONS . FURTHER, FOLLOWING SMT. J. RAMA S CASE OF HON BLE KARNATAKA HIGH COURT (SUPRA), WE HAVE TAKEN A DECISION DATED 17.02.2012 OF ITAT, KOLKATA BENCH IN ITA NO. 199/KOL/2010 IN THE CASE OF DCIT, CIRCLE - 9 VS. - KAMAL MUKHERJEE & CO. (SHIPPING) (P.) LTD., WHEREIN IT IS HELD AS UNDER : - ( FROM HEAD NOTES) .U NDOUBTEDLY, THESE DECISIONS DO INDICATE THAT THERE IS A WORKMAN EMPLOYER RELATIONSHIP BETWEEN THE DOCK WORKERS AND THE STEVEDORES LIKE ASSESSEE WHEN THEY EMPLOY THOSE WORKERS, BUT BE THAT AS IT MAY, THE FACT REMAINS THAT THE ASSESSEE HAS MADE PAYMENTS TO THE CDLB FOR SUPPLY OF LABOUR, E VEN WHEN THIS LABOUR MAY BE TREATED AS EMPLOYED BY THE ASSESSEE FOR ALL PRACTICAL PURPOSES, THE PROVISIONS OF SECTION 194C ARE CLEARLY ATTRACTED. IN SUCH A SITUATION, I.E. WHEN LABOUR HIRED BY THE ASSESSEE THROUGH CDLB IS CONSIDERED TO BE IN ASSESSEE S EMP LOYMENT, THE PAYMENTS MADE TO CDLB CANNOT BE TREATED AS PAYMENTS FOR ANY WORK, BUT NEVERTHELESS THESE PAYMENTS COULD STILL BE COVERED BY THE PROVISIONS OF SECTION 194C BECAUSE THESE ARE PAYMENTS MADE FOR SUPPLY OF LABOUR WHICH ARE SPECIFICALLY COVERED BY S ECTION 194C(1). CDLB IS AN AGENT OF THE STEVEDORES LIKE THE ASSESSEE IN THE SENSE THAT THE LABOUR IS RECRUITED BY THE ASSESSEE THROUGH CDLB, BUT WHEN THIS FACT DOES NOT AFFECT THE NATURE OF PAYMENT BY THE ASSESSEE TO THE CDLB WHICH IS ADMITTEDLY IN THE NAT URE OF PAYMENT FOR SUPPLY OF LABOUR. THE REASONING ADOPTED BY THE COMMISSIONER (APPEALS), THOUGH SOMEWHAT IMPRESSIVE AT FIRST GLANCE, IS FALLACIOUS. THERE IS NO CAUSE AND EFFECT RELATIONSHIP BETWEEN WORKERS ASSIGNED BY THE CDLB HAVING EMPLOYER WORKMAN RELA TIONSHIP WITH THE ASSESSEE, AND THE PAYMENTS BEING MADE BY THE ASSESSEE TO CDLB BEING NOT IN THE NATURE OF PAYMENT FOR SUPPLY OF LABOUR . IT IS ALSO A FACT THAT THE PAYMENTS ARE HIT BY THE PROVISO TO SECTION 194(5) OF THE ACT FOR THE REASON THAT THE PAY MENTS ARE EXCEEDING RS.50,000/ - IN AGGREGATE IN CASE OF O N E TRUCK . 3 ITA NO.2 54 0/K/2013 NANDY GUHA & CO. AY 20 1 0 - 1 1 THERE IS A CONTRACT AND ASSESSEE HAS FAILED TO DEDUCT TDS U/S. 194C OF THE ACT, THEREBY THE AO HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT FOR MAKING DISALLOWANCE . HENCE, I CONFIRM THE ORDERS OF THE LOWER AUTHORITIES AND THIS ISSUE OF ASSESSEE S APPEAL IS DISMISSED. 4 . THE NEXT COMMON ISSUE IS AS REGARDS TO THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE OF EXPENSES ON ACCOUNT OF LOADING CHARGES, COOLIE CHARGES @ 10% AND CASUAL LABOUR CHARGES @ 20%. 5. I HAVE HEARD LD. SR. DR AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. I FIND THAT THE AO HAS MADE THE DISALLOWANCE @ 10% AND 20% ON ACCOUNT OF LOADING AND COLLIE CHARGES AS WELL AS CASUAL LABOUR CHARGES RESPECTIVELY AS UNDER: BESIDES ABOVE THE ASSESSEE (FIRM) HAS DEBITED EXPENSES ON ACCOUNT OF LOADING & COOLIE CHARGES OF RS.72,100/ - & RS.86,520/ - RESPECTIVELY. IN THIS CASE THE ASSESSEE (FIRM) HAS PAID THE ABOVE EXPENSES IN CASH THROUGH SELF MADE VOUCH ERS. THE ABOVE PAYMENTS ARE NOT VERIFIABLE AS THE ASSESSEE HAS FAILED TO SUBMIT ANY OTHER DETAILS OTHER THAN SELF MADE VOUCHERS. IN VIEW OF ABOVE I DISALLOWED RS.7210/ - & RS.8652/ - @ 10% OF RS.72,100/ - & RS.86,520/ - RESPECTIVELY AND ADDED TO THE TOTAL IN COME OF THE ASSESSEE (FIRM) FOR THE YEAR. THE ASSESSEE IN THEIR PROFIT & LOSS A/C. HAS DEBITED RS.53,600/ - ON ACCOUNT OF CASUAL LABOUR CHARGES IN ADDITION EXPENSES ON A/C. OF LOADING & COOLIE CHARGES AND SALARY TO STAFF. THE PAYMENTS FOR CASUAL LABOUR C HARGES WAS ALSO MADE THROUGH SELF MADE VOUCHERS. IN VIEW OF ABOVE I HAVE DISALLOWED RS.10,720/ - @ 20% OF RS.53,600/ - ON THE REASON THAT THE PAYMENTS TO CASUAL LABOURS ARE NOT VERIFIABLE. DISALLOWANCE ON THIS A/C. IS RS.10,720/ - AND ADDED IN THE TOTAL I NCOME OF THE ASSESSEE. CIT(A ) ALSO CONFIRMED SIMPLY ON THIS. I FIND THAT THERE IS NO BASIS FOR MAKING DISALLOWANCE BECAUSE THESE ARE PETTY PAYMENTS TO LABOURERS WHO HAS AFFIXED THEIR THUMB IMPRESSION ON THE RECEIPTS ALTHOUGH THE SAME ARE SELF MADE. THE SE ARE DAILY EXPENSES AND NOTHING ELSE. THIS FACTUM HAS BEEN ADMITTED BY AUTHORITIES BELOW BY ACCEPTING 90% OF THE EXPENSES. I FIND NO REASON TO SUSTAIN THIS ADDITION. ACCORDINGLY, THE SAME IS DELETED. 6. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLOWED . 7 . ORDER IS PRONOUNCED IN THE OPEN COURT ON 2 8 . 1 1 . 2 0 1 4 S D / - , (MAHAVIR SINGH) JU DICIAL MEMBER DATED : 2 8 T H NOVEMBER , 201 4 JD.(SR.P.S.) 4 ITA NO.2 54 0/K/2013 NANDY GUHA & CO. AY 20 1 0 - 1 1 - COPY OF THE ORDER FORWARDED TO: 1 . / A PPELLANT NANDY GUHA & CO., B. T. ROAD, PANIHATI, 24 PARGANAS (NORTH), PIN - 700 114. 2 / RESPONDENT ITO, WARD - 5 1 ( 2 ) , KOLKATA 3 . ( )/ THE CIT(A), KOLKATA 4. 5. / CIT KOLKATA / DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, / BY ORDER, /ASSTT. REGISTRAR .