Shri Sumermal Ghewarchand Jain, Ahmedabad V. The Income Tax Officer, Ward-4, Sabarkantha

ITA 2702/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0381 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 29-09-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 19-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ITA NO. 2702/AHD/2013 / ASSESSMENT YEAR : 2010-11 SUMERMAL GHERWARCHAND JAIN, C/O. RANMAL SUMERMAL MARKET YARD, MODASA, SABARKANTHA PAN : ABMPJ 0361 L VS ITO, WARD-4, SABARKANTHA / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI TEJ SHAH, ADVOCATE REVENUE BY : SHRI RAHUL KUMAR, SR. DR / DATE OF HEARING : 29/09/2016 / DATE OF PRONOUNCEMENT: 30/09/2016 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-VIII, AHMEDABA D DATED 29.08.2013 FOR AY 2010.11. 2. FOLLOWING TWO GROUNDS ARE RAISED:- 1. THAT THE LD. CIT(A) ERRED IN LAW AND IN THE FACTS O F THE CASE IN CONFIRMING THE ORDER OF THE AO IN DISALLOWING RS.4, 42,887/- AS FREIGHT AND LABOUR EXPENSES U/S 40(A)(IA) OF THE ACT. 2. THAT THE LD. CIT(A) ERRED IN LAW AND IN THE FACTS O F THE CASE IN CONFIRMING THE ORDER OF THE AO IN DISALLOWING RS.47 ,000/- AS SALARY EXPENSES PAID TO HIS WIFE U/S 40A(2)(B) OF THE ACT. 3. GROUND NO.2 IS NOT PRESSED; HENCE DISMISSED AS N OT PRESSED. 4. APROPOS GROUND NO.1, LD. COUNSEL FOR THE ASSESSE E CONTENDS THAT SECTION 194C CONTEMPLATES THAT WHERE ANY PAYMENT IS MADE TOWARDS A CONTRACTOR IN PURSUANCE OF A CONTRACT, THEN THE SAM E SHOULD BE LIABLE FOR TDS. IN THIS CASE, THE LD. CIT(A) HIMSELF HAS ACCE PTED THAT TRANSPORT VEHICLES ARE NOT HIRED BY THE ASSESSEE, BUT BY THE OUTSTATIO N VENDORS WHICH IS APPARENT FROM THE FOLLOWING OBSERVATIONS:- SMC-ITA NO. 2702/AHD/2013 SUMERMAL GHERWARCHAND JAIN VS. ITO AY : 2010-11 2 AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES, I T IS NOTED THAT THE TRANSPORT IS NOT HIRED DIRECTLY BY THE APPELLANT. THE TRUCKS ARE HIRED BY THE SELLER WHO SENDS THE GOODS TO THE APPELLANT AS EACH BILL THERE IS A MENTION OF TRUCK NUMBER AND THERE IS A DIRECTION TO THE APPELL ANT THAT CERTAIN AMOUNT SHOULD BE PAID TO THE TRUCK DRIVER ON ACCOUNT OF FR EIGHT. CERTAIN BILLS HAVE ALSO BEEN PRODUCED BEFORE ME DURING THE COURSE OF A PPELLATE PROCEEDINGS, IT IS SEEN THAT WHILE ISSUING THE SALE INVOICE THE SELLER ALSO WRITES A LETTER TO THE APPELLANT INFORMING THE DISPATCH OF GOODS. 4.1 THESE OBSERVATIONS MAKE IT CLEAR THAT THE ASSES SEE HAD NO KNOWLEDGE ABOUT THE TRANSPORTER OR ANY CONTRACT ENTERED WITH THE TRANSPORTER. THE PAYMENT WAS MADE ON THE INSTRUCTIONS AND INVOICE OF THE VENDORS. THEREFORE, THE PROVISIONS OF SECTION 194C ARE NOT A PPLICABLE. CONSEQUENTLY, NO DISALLOWANCE CAN BE MADE U/S 40(A)(IA) OF THE AC T. 5. LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE OR DERS OF THE AUTHORITIES BELOW. 6. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. FROM THE RECORD, IT CLEARLY EMERGES THAT THE ASSESSEE USED T O RECEIVE JIGGERY FROM KARNATAKA ON THE TRANSPORT VEHICLES SENT BY THE VEN DORS. ALL THE DETAILS OF TRANSPORT AND AMOUNTS WERE ENTERED INTO BY THE TRAN SPORTERS AND VENDORS. ASSESSEE HAS NO ROLE TO PLAY IN THE CONTRACT. IN V IEW OF THESE FACTS AND CIRCUMSTANCES, PROVISIONS OF SECTION 194C ARE NOT A PPLICABLE TO THE ASSESSEES CASE. IN VIEW THEREOF, THE DISALLOWANCE MADE U/S 40(A)(IA) IS DELETED. ACCORDINGLY, ASSESSEES APPEAL IS PARTLY A LLOWED. 7. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED. ORDER PRONOUNCED IN THE COURT ON 30 TH SEPTEMBER, 2016 AT AHMEDABAD. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 30/09/2016 *BIJU T. SMC-ITA NO. 2702/AHD/2013 SUMERMAL GHERWARCHAND JAIN VS. ITO AY : 2010-11 3 / 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