The ITO, TDS, Anand V. Rinku Comm.Carrier Pvt. Ltd., Anand

ITA 281/AHD/2005

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8952 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 07-09-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 31-01-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: DHIREN R SHAH
• Keywords: TDS
• Section: 194C; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD D BENCH (BEFORE S/SHRI R.V.EASWAR, VICE-PRESIDENT AND A.N. PAHUJA, ACCOUNTANT MEMBER) ITA NO.281/AHD/2005 [ASSTT.YEAR : 2003-2004] ITO, TDS ANAND. VS. RINKU COMMERCIAL CARRIER PVT. LTD. GOPAL FARM, NATIONAL HIGHWAY NO.8 SAMARKHA CROSSING, ANAND. REVENUE BY : SHRI C.K.MISHRA ASSESSEE BY : SHRI DHIREN R. SHAH O R D E R PER R.V.EASWAR, VICE-PRESIDENT : IN THIS APPEAL, WHICH IS BY THE REVENUE, THE FIRST GROUND TAKEN IS THAT THE CIT(A) ERRED IN EXCLUDING THE PAYMENTS AGGREGATING TO RS.5,26,09,106 FROM THE PUR VIEW OF TAX DEDUCTION U/S.194C OF THE IT ACT. IT IS CLAIMED IN THE GROUND THAT THE CIT(A) WAS NOT RIGHT IN HIS VIEW THAT THE AMOUNT OF PAYMENT WAS LE SS THAN RS.20,000 IN RESPECT OF EACH GOODS RECEIPT TAKEN SINGLY, BECAUSE THE CON TRACT FOR HIRING THE VEHICLES WAS A CONTINUOUS CONTRACT AND THE CONSIDERATION THE REFORE CANNOT BE LIMITED TO THE AMOUNT OF THE GOODS RECEIPT. THE SECOND GROUND IS THAT, WITHOUT PREJUDICE, THE CIT(A) ERRED IN TAKING THE TOTAL AMOUNT OF THE GOODS RECEIPT AT RS.5,26,09,106 WITHOUT ANY EVIDENCE OR ANY VERIFICA TION BY HIM OR BY THE ASSESSING OFFICER. 2. THE ASSESSEE IS MAINLY ENGAGED IN THE BUSINESS O F TRANSPORT OF VEHICLES, MAINLY TRACTORS, UNDER CONTRACT WITH THE MANUFACTUR ERS OF TRACTORS. IT HAS OFFICES AT VARIOUS PLACES SUCH AS BOMBAY, MADRAS, BANGALORE , FARIDABAD, HYDERABAD, NAGPUR,CHANDIGARH, NOIDA ETC. THESE ARE THE PLACES WHERE MOST OF THE MANUFACTURERS ARE LOCATED AND THE BUSINESS OF TRANS PORT FOR THE CONSTITUENTS IS TO COORDINATE IT THROUGH LOCAL OFFICES IN THESE PLACES . THE MANNER IN WHICH THE ASSESSEE CARRIES ON THIS BUSINESS IS DETAILED IN PA RAGRAPH 3.2 OF THE ORDER OF THE PAGE - 2 ITA NO.281/AHD/2005 -2- CIT(A). IT WOULD APPEAR THAT THE ASSESSEE MADE PAYM ENTS TO THE LOCAL TRANSPORTER FROM WHICH NORMALLY TAX IS TO BE DEDUCT ED U/S.194C(1) OF THE ACT. HOWEVER, THE ASSESSEE DID NOT DEDUCT THE TAX ON THE GROUND THAT IT WAS UNDER THE BONA FIDE BELIEF THAT NO TAX IS TO BE DEDUCTED AT SOURCE WHERE THE AMOUNT UNDER EACH OF CONTRACT OF BILTY-FREIGHT, AS THE P AYMENT IS CALLED IN THESE CIRCLES, DOES NOT EXCEED RS.20,000. THE ASSESSEE CI TED CLAUSE (I) OF SUB-SECTION (3) OF SECTION 194C WHICH AT THE RELEVANT TIME STAT ED THAT NO TAX NEED BE DEDUCTED FROM SUCH PAYMENTS IF THE SUM CREDITED OR PAID IN PURSUANCE OF ANY CONTRACT THE CONSIDERATION FOR WHICH DOES NOT EXCEE D TWENTY THOUSAND RUPEES. IT WAS THE CASE OF THE ASSESSEE THAT IT HAD NOT ENT ERED INTO ANY CONTRACT OR SUB- CONTRACT WITH OTHER TRANSPORTERS TO CARRY OUT THE W ORK ON ITS BEHALF AND THAT EACH GOODS RECEIPT (GR) IS A SEPARATE CONTRACT SINCE NO FIXED CONTRACTS ARE ENTERED INTO WITH THE VEHICLE-PROVIDERS. THESE SUBMISSIONS WERE REJECTED BY THE ASSESSING OFFICER WHO PASSED ORDERS SEEKING TO RECO VER THE TAX FROM THE ASSESSEE U/S 201 AND ALSO TO LEVY INTEREST U/S.201( 1A) OF THE ACT. THE SUBMISSIONS WERE HOWEVER ACCEPTED BY THE CIT(A), WH O DIRECTED THE ASSESSING OFFICER NOT TO RECOVER THE TAX OR LEVY INTEREST IN RESPECT OF PAYMENT WHICH DID NOT EXCEED RS.20,000. THE AGGREGATE OF SUCH PAYMENT S CAME TO RS.5,26,09,106. IN RESPECT OF THE GOODS RECEIPT (GR ) WHICH EXCEEDED RS.20,000, HE UPHELD THE ORDERS OF THE ASSESSING OF FICER AND SUCH PAYMENTS CAME TO RS.5,65,61,376. 3. THE ASSESSEE HAS NOT COME IN APPEAL AGAINST THAT PART OF THE IMPUGNED ORDER WHICH IS AGAINST IT BUT IT IS THE DEPARTMENT WHICH HAS COME IN APPEAL QUESTIONING THE DECISION OF THE CIT(A) IN SO FAR AS IT RELATES TO PAYMENT OF LESS THAN RS.20,000 UNDER EACH GOODS RECEIPT (GR). AT TH E TIME OF THE HEARING, IT WAS POINTED OUT ON BEHALF OF THE ASSESSEE THAT IN I TA NO.2678/AHD/2004 (AY 2003-04) IN THE CASE OF M/S.SAINIK TRANSPORT, AHMED ABAD V ITO THE AHMEDABAD BENCH (SMC) HAS TAKEN THE VIEW THAT IF IN DIVIDUAL PAYMENTS OF GOODS RECEIPT ARE BELOW RS.20,000 AND THERE IS NO C ONTINUOUS CONTRACT WITH THE PAGE - 3 ITA NO.281/AHD/2005 -3- TRANSPORTER THE PAYMENT NEED NOT BE SUBJECTED TO TA X DEDUCTION AS PROVIDED IN CLAUSE (I) OF SUB-SECTION (3) OF SEC.194C. A COPY O F THE SAID ORDER WAS FILED. IT WAS ALSO SUBMITTED THAT THE MUMBAI BENCH OF THE TRI BUNAL (DIVISION BENCH) IN CITY TRANSPORT CORPN. V ITO (2007) 13 SOT 479 HAS A LSO TAKEN A SIMILAR VIEW. IN THESE CASES, THE CIRCULAR NO.715 DATED 8-8-1995 ISSUED BY THE CBDT HAS BEEN TAKEN NOTE OF, WHERE IT WAS STATED THAT EACH G R CAN BE CONSIDERED TO BE A SEPARATE CONTRACT IF THE GOODS ARE TRANSPORTED AT O NE TIME AND ONLY IF THE GOODS ARE TRANSPORTED CONTINUOUSLY IN PURSUANCE OF A CONT RACT FOR SPECIFIC PERIOD OR FOR A SPECIFIC QUANTITY CAN THE GRS BE AGGREGATED A ND SECTION 194C BE APPLIED. IN THE PRESENT CASE, THERE IS NO MATERIAL TO QUESTI ON OR DOUBT THE VERSION OF THE ASSESSEE THAT NO FIXED CONTRACTS WERE ENTERED INTO WITH SUB-CONTRACTORS. THIS ASPECT HAS BEEN REFERRED TO IN PARAGRAPH 3.16 OF TH E ORDER OF THE CIT(A). NO MATERIAL WAS BROUGHT BEFORE US ALSO TO CONTRADICT T HE FINDING. IN THESE CIRCUMSTANCES AND RESPECTFULLY FOLLOWING THE ORDERS OF THE AHMEDABAD AND MUMBAI BENCHES OF THE TRIBUNAL CITED ABOVE, WE UPHO LD THE DECISION OF THE CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE WITH NO ORDER AS TO COSTS. ORDER PRONOUNCED IN THE OPEN COURT 18 TH SEPTEMBER, 2009. SD/- SD/- (A.N. PAHUJA) ACCOUNTANT MEMBER (R.V.EASWAR) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 18-09-2009 COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR, ITAT, AHMEDABAD