The Dy. Commissioner of Income-tax, Jammu V. M/s. Upkar Goods Transports Company Pvt. Ltd, Jammu

ITA 256/ASR/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95035 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-10-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 31-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S. KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A. NO. 256(ASR)/2012 ASSESSMENT YEAR: 2007-08 PAN: AAACU2026R THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, JAMMU. VS. M/S UPKAR GOODS TRANSPORT COMPANY PVT. LTD., PANJBAKHTAR ROAD, JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. TARSEM LAL (DR) RESPONDENT BY: SH. SUDHIR SEHGAL (ADV.) DATE OF HEARING: 0 6.10.2015 DATE OF PRONOUNCEM ENT: 27.10.2015 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER OF CIT(A), JAMMU, DATED 19.03.2012 FOR THE ASST. YEAR 2007-08. THE REVENUE HAS TAKEN TWO GROUNDS OF APPEAL, HOWEVER, THE GRIEVANCE OF RE VENUE IS WITH THE ACTION OF LEARNED CIT(A), BY WHICH, HE HAD DELETED THE ADDITI ON OF RS.65,88,745/- WHICH THE ASSESSING OFFICER HAD MADE ON ACCOUNT OF VIOLA TION OF PROVISIONS OF SECTION 40(A)(IA) OF THE I.T. ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A TRANSPORTER AND ENGAGED IN THE BUSINESS OF PLAYING TRUCKS FOR MOVEM ENT OF GOODS FROM ONE PLACE TO ANOTHER PLACE. THE ASSESSEE OWNS TRUCKS FO R THE PURPOSES OF ITS 2. ITA NO. 2 56(ASR)/2012 ASST. YE AR 2007-08 BUSINESS AND IT ALSO HIRES TRUCKS FROM THE OUT SIDE ON THE BASIS OF ITS NEED FROM TIME TO TIME. IN THE ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER OBSERVED THAT THAT ASSESSEE HAD MADE PAYMENT OF RS.65,88,745 /- DURING THE YEAR UNDER THE HEAD LORRY HIRE CHARGES AND HAD NOT DEDUCTED TA X THEREON AND THEREFORE, THE ASSESSEE HADE VIOLATED THE PROVISIONS OF SECTIO N 194C AND THEREFORE, HE MADE THE ADDITION ON ACCOUNT OF NON DEDUCTION OF TD S. AGGRIEVED THE ASSESSEE FILED THE APPEAL BEFORE THE CIT(A) AND THE LEARNED CIT(A) HAS DELETED THE ADDITIONS BY HOLDING AS UNDER: 5. I HAVE CAREFULLY CONSIDERED THE SUBMISSION MADE AND THE ASSESSMENT ORDER. AS PER THE FACTS CULLED OUT FROM THE RECORDS THE ASSESSEE ARRANGES INDIVIDUAL TRUCKS AS PER ITS REQUIREMENT KEEPING IN VIEW THE LOAD TO BE CARRIED. THE FREIGHT IS PAID TO INDIVIDUAL DRIVERS/TRUCK OWN ERS. THE FREIGHT PAID ALSO VARIES FROM TIME TO TIME AND FLUCTUATES DUE TO DEMA ND AND SUPPLY. NO SPECIFIC CONTRACT IS ENTERED INTO BY ASSESSEE WITH ANY OF TH E TRUCK OWNER FOR ANY SPECIFIED PERIOD OR QUANTITY OR AS PER ANY PRE-AGRE ED RATES. EACH TRUCK IS PAID SEPARATE PAYMENT FOR EACH TRIP AS THE DESTINATION W ERE ALSO NOT SAME. I HAVE GONE THROUGH THE DOCUMENTS PRODUCED BEFORE ME WHICH EVIDENCE THAT NO PAYMENT TO ANY TRANSPORTER HAS BEEN MADE BY THE ASS ESSEE AND THEIR ROLE WAS LIMITED TO ISSUE G.RS. MERELY BECAUSE ONE PARTICUL AR TRUCK WAS HIRED ON CERTAIN OCCASIONS, IT DOES NOT LEAD TO CONCLUSION THAT ALL THE TRIPS WERE MADE CONTINUOUSLY UNDER THE SPECIFIC CONTRACT. ADMITTEDL Y, THERE IS NO SPECIFIC CONTRACT BROUGHT ON RECORD. THERE IS ANOTHER IMPORT ANT ASPECT WHICH IS NOTED FROM THE DETAILS FURNISHED BEFORE US THAT DIFFERENT FREIGHT IS PAID IN RESPECT OF DIFFERENT TRIPS. HAD THERE BEEN A SINGLE CONTRACT, THEN ASSESSEE WOULD HAVE NOT PAID DIFFERENT AMOUNTS IN RESPECT OF DIFFERENT TRIP S. THIS CIRCUMSTANCE SHOWS THAT DIFFERENT CONTRACT EXISTED ON DIFFERENT OCCASI ONS WHEN THE TRUCKS WERE HIRED. 6. THESE FACTS ARE UNCONTROVERTED. FROM THE FACTS A S ABOVE IT IS CLEAR THAT THERE EXISTED NO ORAL AS WELL AS WRITTEN CONTRACT W ITH THE PAYEE I.E. THE TRUCK 3. ITA NO. 2 56(ASR)/2012 ASST. YE AR 2007-08 DRIVERS AND HENCE THE PROVISIONS OF SECTION 194C WE RE NOT APPLICABLE. CIRCULAR NO.715 OF CBDT DATED 08.08.1995 IS ALSO APPLICABLE AS THERE WAS NO CONTRACT EITHER FOR ANY SPECIFIC PERIOD OR ANY SPECIFIED QUA NTITY. IN THE PRESENT CASE, THERE CANNOT BE SAID THAT ANY ARRANGEMENT AS TO THE PREFIXED RATES OR TRIPS WAS ALSO PRESENT. IN VIEW OF THIS EACH G.R. HAS TO BE T REATED AS A SEPARATE CONTRACT. THE DECISION OF HONBLE P&H HIGH COURT IN CASE OF M /S UNITED RICE MILLS 217 CTR AND HONBLE ITAT, AMRITSAR IN CASE OF M/S INDIA ROAD LINES 45 DTR 49 ARE APPLICABLE ON THE FACTS OF THE CASE. 3. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 4. THE LEARNED DR, AT THE OUT READ WITH THE PROVISI ONS OF SECTION 194C AND IN VIEW OF THE PROVISIONS, THE LEARNED DR SUBMITTED THAT THE TOTAL OF PAYMENTS TO A PERSON HAD TO BE CONSIDERED FOR CONSIDERATION AS TO WHETHER THE PROVISIONS OF SECTION 194C WERE APPLICABLE WHICH THE LEARNED C IT(A) HAD IGNORED AND HE HAS HELD THAT EACH PAYMENT HAS TO BE CONSIDERED SEP ARATELY. THE LEARNED DR SUBMITTED THAT PROVISO TO SECTION 194C CLEARLY STAT ES THAT IF AGGREGATE OF AMOUNTS PAID DURING THE EXCEEDS RS.50,000/-, THE AS SESSEE IS REQUIRED TO DEDUCT THE TAX. THE LEARNED AR ON THE OTHER HAND, S UBMITTED THAT LEARNED CIT(A) HAS CLEARLY RECORDED A FINDING OF FACT THAT NO CONTRACT WRITTEN OR ORAL WAS ON RECORD TO ESTABLISH THAT ASSESSEE HAD ENTERED IN TO ANY CONTRACT WITH THE OWNERS OR DRIVERS OF THE TRUCKS AND THEREFORE, HAS RIGHTLY ARRIVED AT THE CONCLUSION THAT EACH PAYMENT HAS TO BE CONSIDERED A S A SEPARATE AND THEREFORE, HAS RIGHTLY DELETED THE ADDITION. THE LE ANER AR PLACED HIS RELIANCE ON THE FOLLOWING CASE LAWS. A) CIT VS UNITED RICE LAND LTD. 322 ITR 594 (P&H HI GH COURT) B) CIT VS. GREWAL BROTHERS (240 CTR 325) (P&H HIGH COURT) C) DCIT VS. SATISH AGGARWAL & CO.124 TTJ 542 (ITAT ASR.) 4. ITA NO. 2 56(ASR)/2012 ASST. YE AR 2007-08 D) ITO VS. INDIAN ROAD LINES (45 DTR 49) ITAT ASR.) E) DCIT VS. VIKASH SHARMA ITA NO. 833/CHD/2011 F) ACIT VS. TRUCK OPERATOR UNION IN ITA NO. 816/CHD /2009 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT HONBLE PUNJAB & HAR YANA HIGH COURT IN THE CASE OF CIT VS. UNITED RICE LAND LTD. 322 ITR 594 ( P&H) UNDER SIMILAR FACTS AND CIRCUMSTANCES HAS DISMISSED THE APPEAL OF REVEN UE. THE FINDINGS OF HONBLE PUNJAB & HARYANA HIGH COURT ARE REPRODUCED A S UNDER: THE AO HAD HELD THE ASSESSEE IS LIABLE FOR DEDUCTI ON OF TAX ONLY ON THE ASSUMPTION THAT ASSESSEE WAS HAVING AGREEMENT WITH THE PARTIES THROUGH WHOM TRUCKS WERE ARRANGED FOR TRANSPORTATION OF GOO DS. HOWEVER, THE CIT(A) HAS RECORDED A FINDING OF FACT THAT THERE WAS NEITH ER ANY ORAL OR WRITTEN AGREEMENT BETWEEN THE ASSESSEE AND TRANSPORTERS FOR CARRIAGE OF GOODS NOR IT HAS BEEN PROVED THAT ANY SUM OF MONEY REGARDING FRE IGHT CHARGES WAS PAID TO THEM IN PURSUANCE OF A CONTRACT FOR SPECIFIC PERIOD , QUANTITY OR PRICE. THIS FINDING OF FACT WAS RECORDED BY THE CIT(A) AFTER CO NSIDERING THE CERTIFICATE FURNISHED BY THE TRANSPORTERS. THE TRIBUNAL HAS ALS O RECORDED A FINDING OF FACT THAT THE DEPARTMENT HAS NOT CONTROVERTED THE SAID F INDING OF THE CIT(A) EVEN BEFORE THE TRIBUNAL. WHILE RECORDING THIS FINDING O F FACT, THE TRIBUNAL HAS CLEARLY STATED THAT NOTHING HAS BEEN BROUGHT ON RECORD BY T HE AO TO PROVE THAT THERE WAS WRITTEN OR ORAL AGREEMENT BETWEEN THE ALLEGED P ARTIES FOR CARRIAGE OF THE GOODS. IN VIEW OF THE ABOVE, THE FINDING OF FACT RE CORDED BY THE TRIBUNAL IS NOT TO BE INTERFERED WITH. THERE BEING NEITHER ANY ORAL OR WRITTEN AGREEMENT BETWEEN THE ASSESSEE AND THE TRANSPORTERS FOR CARRIAGE OF G OODS NOR IT IS PROVED THAT ANY FREIGHT CHARGES WERE PAID TO THEM IN PURSUANCE OF A CONTRACT FOR A SPECIFIC PERIOD, QUANTITY OR PRICE, THE ASSESSEE WAS NOT LIA BLE TO DEDUCT TAX UNDER S.194C FROM THE PAYMENTS MADE TO THE TRANSPORTERS. WE FIND THAT THE FACTS AND CIRCUMSTANCES IN THE PRE SENT CASE ARE SIMILAR WITH THE CASE LAW OF UNITED RICE LIMITED (SUPRA) DECIDED BY HONBLE P&H HIGH 5. ITA NO. 2 56(ASR)/2012 ASST. YE AR 2007-08 COURT. THE LEARNED CIT(A) HAS RECORDED A FINDING OF FACT THAT THERE WAS NO WRITTEN OR ORAL AGREEMENT BETWEEN THE PARTIES FOR C ARRIAGE OF GOODS. THEREFORE, RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A). IN VIEW OF THE ABOVE, THE APPEAL FILED BY REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH OCTOBER, 2015. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTA NT MEMBER DATED: 27.10.2015. /PK/ PS. COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S UPKAR GOODS TRANSPORT COMPANY PVT . LTD. JAMMU. 2. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-2, JAMMU . 3. THE CIT, 4. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.