Rahi Construction, Baroda V. The Income Tax Officer, Ward-2(6), Baroda

ITA 2560/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5821 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-05-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 16-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 194C; 2

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ ITA NO. 2560/AHD/2014 / A.Y. 2006-2007 RAHI CONSTRUCTION, 304, STATUS AVENUE, 9 SAMPATRAO COLONY, OPP. NEW INDIA MILLS, DIST: VADODARA PAN : AAFFR 1126 B VS ITO, WARD-2(6), BARODA / (APPELLANT) / (RESPONDENT) BY ASSESSEE : MR. PARIN SHAH, AR BY REVENUE : MR. PRASOON KABRA, SR DR / DATE OF HEARING : 08/05/2017 /DATE OF PRONOUNCEMENT: 18/05/2017 / O R D E R PER S.S. GODARA, JUDICIAL MEMBER :- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2006-07 ARISES AGAINST THE CIT(A)-II, BARODAS ORDER DATED 27.06.2 014 PASSED IN CASE NO.CAB/II-283/11-12 UPHOLDING ASSESSING OFFICERS A CTION MAKING SECTION 40(A)(IA) DISALLOWANCE ON CONTRACTUAL PAYME NT ON ACCOUNT OF SHORT DEDUCTION OF TDS U/S 194C OF THE ACT, IN PROC EEDINGS U/S 143(3) R.W.S. 147 OF THE ACT. 2. HEARD BOTH THE PARTIES STRONGLY REITERATING THEI R RESPECTIVE STANDS. CASE FILE PERUSED. RELEVANT FACTS OF THE CASE ARE IN A VERY NARROW COMPASS. THIS ASSESSEE IS A CIVIL CONTRACTOR . IT ADMITTEDLY MADE THE FOLLOWING PAYMENTS FORMING SUBJECT MATTER OF THE ITA NO. 2560/AHD/2014 RAHI CONSTRUCTION VS. ITO A.Y : 2006-07 - 2 - IMPUGNED SECTION 14(A)(IA) DISALLOWANCE WITHOUT DED UCTING TDS QUA SURCHARGE AMOUNT INVOLVED THEREIN:- SHORT DEDUCITON OF TDS SR. NO. NAME OF PARTY TOTAL AMOUNT OF TDS CER. SHORT TDS PROPORTIONATELY ALLOWABLE EXPENSES 1 BALAJI TRANSPORT 171518 350 155921 2 DHRUV TRANSPORT 157475 322 134127 3 KASHYAP CORPORATION 471229 480 428447 4 KHODIYAR CARTING 284329 580 258481 5 KHODIYAR TRANSPORT 123624 252 112394 6 SANDIP T PATEL 1478240 - 1344017 7 SUHANI TRANSPORT 439704 897 399731 3126119 2842117 EXCESS ALLOWED IS RS.284002 3. BOTH THE LOWER AUTHORITIES REJECT ASSESSEES EXP LANATION PLEADING THAT THE ABOVE SHORT DEDUCTION OF TDS HAS BEEN ON ACCOUNT OF THE FACT THAT IT DID NOT INCLUDE THE RELEVANT SU RCHARGE AMOUNT BEFORE MAKING THE IMPUGNED DEDUCTION WHICH AS PER L OWER AUTHORITIES INVITES SECTION 40(A)(IA) DISALLOWANCE. LD. COUNSEL REPRESENTING ASSESSEE FILES BEFORE US CBDT CIRCULAR NO.14/2006 DATED 28.12.2006 CLEARLY INDICATING THEREIN THAT TH E TAX DEDUCTED AT SOURCE SHALL BE INCREASED BY A SURCHARGE WHERE THE INCOME OR THE AGGREGATE OF SUCH INCOMES PAID OR LIKELY TO BE PAID AS ALLOWABLE FOR THE RELEVANT TDS DEDUCTION EXCEEDS RS.10 LAKHS. TH IS IS NOT THE REVENUES CASE ANY WAY THAT THE ASSESSEES PAYMENTS IN QUESTION INVITING THE IMPUGNED DISALLOWANCE EXCEED THE SAID THRESHOLD LIMIT. WE THUS FIND IT A FIT CASE AS COVERED UNDER THE CBD TS ABOVE STATED BENEFICIAL CIRCULAR. WE FURTHER DEEM IT APPROPRIATE TO QUOTE THE HONBLE CALCUTTA HIGH COURTS DECISION IN THE CASE OF CIT VS. M/S. ITA NO. 2560/AHD/2014 RAHI CONSTRUCTION VS. ITO A.Y : 2006-07 - 3 - S.K. TEKRIWAL, REPORTED IN (2014) 361 ITR 432, HOLD ING THAT SECTION 40(A)(IA) DISALLOWANCE IS NOT ATTRACTED IN CASE OF SHORT DEDUCTION OF TDS IN QUESTION. WE, THEREFORE, DIRECT THE ASSESSI NG OFFICER TO DELETE THE IMPUGNED SECTION 40(A)(IA) DISALLOWANCE OF RS.2 .84 LAKHS UNDER CHALLENGE. THIS ASSESSEES APPEAL IS ACCORDINGLY AL LOWED. 4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE CO URT ON 18 TH MAY , 201 7 AT AHMEDABAD SD/- SD/- (PRADIP KUMAR KEDIA) (S.S. GODAR A) ACCOUNTANT MEMBER JU DICIAL MEMBER AHMEDABAD, DATED 18/05/2017 *BT ! '! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ' $ / CONCERNED CIT 4. $ ( ) / THE CIT(A) 5. ' **' , ' , / DR, ITAT, AHMEDABAD 6. / / GUARD FILE. / BY ORDER, TRUE COPY / (DY./ASSTT.REGISTRAR) ' (, / ITAT, AHMEDABAD