Sri Surendra Kumar Kedia, Ranchi V. ACIT, Ranchi

ITA 28/RAN/2013

• Counselvise Citation: 2825114 RSA 2013
• Duration Of Justice: 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 13-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K TRIVEDI SR S C
• Assessee Lawyers: S K PODDAR
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI CIRCUI T BENCH, RANCHI (BEFORE SHRI P.K.BANSAL, HONBLE A.M.& SHR I D,T. GARASIA, HONBLE J.M.) I.T.A. NO. 28/RAN/2013 : ASSESSMENT YEAR 2007 -08 SRI SURENDRA KUMAR KEDIA, RANCHI -VS- ACIT , CIRCLE-3, RANCHI (APPELLANT) PAN: ABQPK6001J (RES PONDENT) APPELLANT BY : SHRI S.K.PODDAR, ADVOCATE. RESPONDENT BY : SHRI A.K.TRIVEDI, SR.S.C. DATE OF CONCLUDING THE HEARING : 01.05.2013 DATE OF PRONOUNCING THE ORDER : 03.05.2013 O R D E R PER BENCH : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), RANCHI DATED 31.01.2012 FOR THE ASSESSMENT YEAR 200 7-08. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES T O THE DISALLOWANCE OF RS.4,56,000/- UNDER SECTION 40(A)(IA) OF THE INCOM E-TAX ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CL AIMED THE TRUCK HIRING CHARGES AMOUNTING TO RS.4,56,000/-. THE ASSESSING OFFICER I NVOKED THE PROVISIONS OF SECTION 194J AND ALSO THE PROVISIONS OF SECTION 194C AND TO OK THE VIEW THAT THE ASSESSEE FAILED TO DEDUCT THE TDS AND THEREFORE DISALLOWED T HE SAID EXPENSES UNDER SECTION 40(A)(IA) OF THE I.T. ACT. THE ASSESSEE WENT IN APP EAL BEFORE THE CIT(A) AND THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 4. THE LD. A.R. BEFORE US CONTENDED THAT THE PROVIS IONS OF TDS WERE NOT APPLICABLE IN THE CASE OF THE ASSESSEE UNDER SECTIO N 194C. THE ASSESSEE IS NOT UNDER OBLIGATION TO DEDUCT TAX FOR HIRING OF THE PLANT AN D MACHINERY WHICH WILL INCLUDE THE 2 TRUCK HIRING CHARGES. CLAUSE K, SUB-SECTION 1 OF SE CTION 194C WAS BROUGHT ON THE STATUTES SUBSEQUENT TO ASSESSMENT YEAR 2007-08. THE PROVISIONS OF SECTION 194I WILL ALSO NOT APPLY AS THE ASSESSEE IS NOT AN INDIVIDUAL AND THE ASSESSEE HAS NOT MADE PAYMENT FOR HIRING OF THE PLANT. THE LD. D.R., ON T HE OTHER HAND, VEHEMENTLY CONTENDED THAT THE PROVISIONS OF SECTION 194-I WERE CLEARLY APPLICABLE IN THE CASE OF THE ASSESSEE. THE PLANT HAS BEEN DEFINED UNDER SECT ION 43(3) OF THE ITA ACT TO INCLUDE SHIPS, VEHICLES, BOOKS, SCIENTIFIC APPARATU S AND SURGICAL EQUIPMENTS USED FOR THE PURPOSE OF BUSINESS OR PROFESSION. THE TRUCK IS A VEHICLE AND THEREFORE IS A PLANT. 5. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CON SIDERED THE SAME. WE HAVE ALSO GONE THROUGH THE PROVISIONS OF SECTION 194-I. IN SECTION 194-I, IF ANY PERSON RESPONSIBLE FOR PAYING TO AN AGENT AN INCOME BY FRE IGHT IS BOUND TO DEDUCT THE TDS AT THE PRESCRIBED RATE AT THE TIME OF CREDIT OF SUC H INCOME TO THE ACCOUNT OF THE PAYEE, AT THE TIME OF PAYMENT BY ANY MODE WHATSOEVER. EARL IER, THIS PROVISION WAS APPLICABLE IN THE CASE OF INDIVIDUAL OR HUF WHOSE S ALES GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSION CARRIED ON BY HIM E XCEEDS THE MONETARY LIMITS SPECIFIED UNDER CLAUSE A OR CLAUSE B OF SECTION 44A DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANCIAL YEAR IN WHICH S UCH INCOME BY WAY OF RENT IS CREDITED OR PAID. IT IS NOT DENIED THAT ASSESSEES TURNOVER EXCEEDS THE LIMIT AS HAS BEEN SPECIFIED UNDER SECTION 44AB. THE RENT HAS BEE N DEFINED UNDER THE EXPLANATION, ACCORDING TO WHICH, EVEN THE PAYMENT OF LEASING OF THE MACHINERY OR PLANT OR EQUIPMENT WHETHER THEY ARE OWNED OR NOT BY THE PAYE E ARE INCLUDED IN THE DEFINITION OF THE RIGHT. THE PLANT HAS BEEN DEFINED UNDER SECT ION 43(3) TO INCLUDE THEREUNDER EVEN A VEHICLE. THIS DEFINITION OF THE RENT HAS BEE N SUBSTITUTED BY THE TAXATION LAWS AMENDMENT ACT 2006 W.E.F. 13.07.2006. PRIOR TO THIS , THE RENT DOES NOT INCLUDE THE LEASE RENT PAID FOR MACHINERY, PLANT, EQUIPMENTS, F URNITURE OR FITTINGS. IN VIEW OF THIS FACT, IN OUR OPINION, THE ASSESSEE WAS LIABLE TO DE DUCT TDS IN RESPECT OF LEASE RENT, WHICH HAS BEEN CREDITED OR PAID BY THE ASSESSEE IN RESPECT OF PERIOD FROM 13.07.2006. 3 WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AN D DIRECT THE ASSESSING OFFICER TO WORK OUT THE RENT INCURRED BY THE ASSESSEE AFTER 13 .07.2006 ON WHICH THE TDS HAS NOT BEEN DEDUCTED AND DISALLOW THE SAME UNDER SECTI ON 40(A)(IA). HENCE, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 3 RD MAY, 2013. SD/- SD/- [D.T.GARASIA] [P.K.BANSAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 3 RD MAY, 2013 COPY OF ORDER FORWARDED TO : 1. SRI SURENDRA KUMAR KEDIA, RANCHI 2. ACIT, CIRCLE-3, RANCHI 3. C.I.T.(A), 4. THE .C.I.T., RANCHI 5. THE D.R., I.T.A.T., TRUE COPY, BY ORDER, [MST, SR.PS] SR. PRIVATE SECRETARY (ON T OUR) ITAT, RANCHI