Shri Manoj Kumar Agarwal, Paschim Medinipur V. Addl. CIT, Range - 2, Midnapore, Midnapore

ITA 281/KOL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70408 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2013
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 20-02-2012
• Court: TRIBUNAL
• Department Lawyers: MUZAFFAR HUSSAIN
• Assessee Lawyers: ALOK KUMAR GHOSH
• Keywords: Business income
• Section: 143(3); 194C

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE , /AND . . . . ''# ''# ''# ''#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 281/KOL/2012 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2007-08 SHRI MANOJ KUMAR AGARWAL VS. ADDL. COMMISSIONER OF INCOME-TAX, (PAN:ACQPA9653D) RANGE-2, MIDNAPORE (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 06.11.2013 DATE OF PRONOUNCEMENT: 21.11.2013 FOR THE APPELLANT: SHRI ALOK KUMAR GHOSH FOR THE RESPONDENT: SHRI MUZAFFAR HUSSAIN, ADDL. CIT, SR. DR $0 / ORDER PER BENCH: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXXVI, KOLKATA IN APPEAL NO. 766/CIT(A)-XXXVI/KOL/R-2,MID/09-10 DATED 01.12. 2011. ASSESSMENT WAS FRAMED BY ADDL. CIT, RANGE-2, MIDNAPORE U/S. 143(3) OF THE IN COME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2007-08 VIDE HIS ORDER DATED 24.12.2009. 2. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) CONFIRMING THE ADDITION OF RS. 4,33,337/- BEING UNRECONCILED AMOUN T TOWARDS PURCHASE FROM ADNANI WILMAR & CO. LTD. FOR THIS, ASSESSEE HAS RAISED FOLLOWING G ROUND NO.1: 1. FOR THAT UNDER THE FACTS AND CIRCUMSTANCES OF T HE CASE THE LD. APPELLATE AUTHORITY WAS ABSOLUTELY WRONG WHILE MAKING ADDITIO N OF THE AMOUNT OF RS.4,33,337/- AS UNRECONCILED AMOUNT TOWARDS PURCHA SE FROM M/S. ADNANI WILMAR & CO. LTD. AND IN TREATING THE SAME AS INCOM E OF THE APPELLANT FOR THE MATERIAL PERIOD. 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESS EE REFERRED TO PAGE 1 OF ASSESSEES PAPER BOOK WHEREIN RECONCILIATION STATEMENT IN RESPECT PU RCHASES MADE FROM ADNANI WILMAR & CO. LTD. AS ON 31.03.2007 IS SUBMITTED, WHEREIN THE SAL E VOUCHER DATED 31.03.2007, INVOICE NO. 0675105238 DISCLOSING THAT THE PARTY ADNANI WILMAR & CO. LTD. MADE SALE OF RS.4,33,337/- 2 ITA NO. 281/K/2012 MANOJ KUMAR AGARWAL, AY:2007-08 BUT GOODS WERE RECEIVED AS ON 01.04.2007 AND DULY R EFLECTED AS ASSESSEES STOCK IN BOOKS OF ACCOUNT AS ON 01.04.2007. HE FILED COPY OF RECONCI LIATION WHICH READS AS UNDER: RECONCILIATION STATEMENT OF ADNANI WILMAR LIMITED AS ON 31 ST MARCH, 2007 DR. BALANCE SHOWN AS PER STATEMENT RS.4,29,337. 00 LESS: AMOUNT DEBITED IN THE STATEMENT AGAINST SALE ON 31.03.07 AS PER INVOICE NO. 0675105238 BUT I RECEIVED GOODS ON 1.4.07 AND DULY REFLECTED IN MY BOOKS ON 1.4.07 I.E. DURING THE F.Y 2007-08 RS.4,33,337.00 CLOSING BALANCE AS PER BOOKS AS ON 31.03.07 RS. 4,000.00 ON QUERY FROM THE BENCH, THE LD. SR. DR FAIRLY CONC EDED THAT IF THIS IS THE POSITION, THE ISSUE CAN BE ALLOWED IN FAVOUR OF THE ASSESSEE BUT IT SHO ULD BE VERIFIED BY THE AO AT THE FIRST INSTANCE. IN SUCH CIRCUMSTANCES AND AFTER HEARING BOTH THE SI DES AND GOING THROUGH THE RECONCILIATION STATEMENT, WE ARE OF THE VIEW THAT THE ASSESSEE HAS RECONCILED THE STOCK STATEMENT BY INCLUDING THE PURCHASES MADE BY ASSESSEE FROM ADNANI WILMAR & CO. LTD. AS ON 31.03.2007 FOR AN AMOUNT OF RS.4,33,337/-. ONCE THIS IS THE POSITION , WE DIRECT THE AO TO VERIFY THE FACT AND ACCORDINGLY ALLOW THE CLAIM OF ASSESSEE. THIS ISSU E OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 4. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE ON ACCOUNT OF TRANSPORTATION CHARGES B Y INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT FOR NON-DEDUCTION OF TDS U/S. 194C OF THE ACT. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.2: 2. FOR THAT UNDER THE FACTS AND CIRCUMSTANCES OF TH E CASE THE LD. ASSESSING AUTHORITY AND THE LD. APPELLATE AUTHORITY FAILED TO APPRECIAT E THE FACTS AND NATURE OF TRANSPORTATION CHARGES INVOLVED IN THE INSTANT CAS E AND WHICH WAS PAID DURING THE COURSE OF PURCHASE AND THE ENTIRE ADDITION OF THE S AID AMOUNT TREATING THE SAME AS EXPENSES DISALLOWABLE UNDER SECTION 40(A)(IA) IN TH E HANDS OF THE APPELLANT, WAS ABSOLUTELY ARBITRARY AND BAD IN LAW. 5. BRIEFLY STATED FACTS ARE THAT THE RELEVANT ASSES SMENT YEAR INVOLVED IS 2007-08 AND ASSESSEE IS AN INDIVIDUAL RUNNING A PROPRIETARY CON CERN UNDER THE NAME AND STYLE OF LAKSHMI NARAYAN TRADING CO. THE ASSESSEE HAS CLAIMED EXPEN SES OF RS.8,82,696/- AND RS.42,368/- BEING CARRIAGE INWARD AND CARRIAGE OUTWARD EXPENSE S RESPECTIVELY. AS THE ASSESSEE HAS NOT DEDUCTED TDS ON CARRIAGE INWARD OF RS.8,82,696/-, T HE AO MADE DISALLOWANCE OF THIS EXPENSES BY INVOKING PROVISIONS OF SECTION 40(A)(IA ) OF THE ACT. THE CIT(A) HAS CONFIRMED THE ACTION OF AO EXCEPT THE AMOUNT WHICH ARE BELOW RS.2 0,000/-. ACCORDINGLY, CIT(A) CONFIRMED THE ADDITION OF RS.8,66,896/-. AGGRIEVED, ASSESSEE CAME IN APPEAL BEFORE US. 3 ITA NO. 281/K/2012 MANOJ KUMAR AGARWAL, AY:2007-08 6. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF IN THE CASE OF ACIT VS SMT. KEYA SETH IN ITA NO.842 & 843/K/2010 FOR ASSESSMENT YEARS 2006-07 & 2007-08 VIDE ORDER DATED 11.03.2011. WE FIND THAT IN THE CASE OF SMT. KEYA SETH CITED SUPRA, WHEREIN EXACTLY THE SAME ISSUE HAS BEEN DECIDED AS UNDER: 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. IT IS AN ADMITTED POSITION THAT THE ASSESSEE AN INDIVIDUA L CARRYING ON THE BUSINESS OF AYURVEDIC (COSMETIC DIVISION) AND THE CONSULTANCY ON BEAUTICI AN AND ALSO RELATED THERAPIES. AS CLAIMED BY THE ASSESSEE, WHETHER THE PROVISIONS OF SECTION 194 (1) AS EXISTED IN ASSESSMENT YEARS 2006-07 & 2007-08 WILL APPLY TO THE ASSESSEE OR NOT? ADMITTED LY, ASSESSEE HAS NOT DEDUCTED ANY TDS ON ADVERTISEMENT PAYMENT AND ACCORDING TO HER, PROVISI ONS OF SECTION 194C(1) AS EXISTED IN THE RELEVANT ASSESSMENT YEARS WILL NOT OBLITERATE ANY D UTY ON ASSESSEE TO DEDUCT TDS. NOW, WE HAVE TO EXAMINE THIS. THE RELEVANT PROVISIONS OF SECTION 194C(1) & (2) AS EXIST IN ASSESSMENT YEAR 2006-07 & 2007-08 READS AS UNDER :- (1) ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO A NY RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE CONTRACTOR) FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK) IN PURSUANCE O F A CONTRACT BETWEEN THE CONTRACTOR AND-- (A) THE CENTRAL GOVERNMENT OR ANY STATE GOVERNMENT ; OR (B) ANY LOCAL AUTHORITY ; OR (C) ANY CORPORATION ESTABLISHED BY OR UNDER A CENTR AL, STATE OR PROVINCIAL ACT ; OR (D) ANY COMPANY, OR (E) ANY CO-OPERATIVE SOCIETY ; OR (F) ANY AUTHORITY, CONSTITUTED IN INDIA BY OR UNDER ANY LAW, ENGAGED EITHER FOR THE PURPOSE OF DEALING WITH AND SATISFYI NG THE NEED FOR HOUSING ACCOMMODATION OR FOR THE PURPOSE OF PLANNIN G, DEVELOPMENT OR IMPROVEMENT OF CITIES, TOWNS AND VILLAGES, OR FO R BOTH ; OR (G) ANY SOCIETY REGISTERED UNDER THE SOCIETIES REGI STRATION ACT, 1860 (21 OF 1860), OR UNDER ANY LAW CORRESPONDING TO THAT AC T IN FORCE IN ANY PART OF INDIA ; OR (H) ANY TRUST ; OR (I) ANY UNIVERSITY ESTABLISHED OR INCORPORATED BY O R UNDER A CENTRAL, STATE OR PROVINCIAL ACT AND AN INSTITUTION DECLARED TO BE A UNIVERSITY UNDER SECTION 3 OF THE UNIVERSITY GRANTS COMMISSION ACT, 1956 (3 OF 1956), OR (J) ANY FIRM, 4 ITA NO. 281/K/2012 MANOJ KUMAR AGARWAL, AY:2007-08 SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACC OUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CH EQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO-- (I) ONE PER CENT. IN CASE OF ADVERTISING, (II) IN ANY OTHER CASE TWO PER CENT. OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THERE IN. (2) ANY PERSON (BEING A CONTRACTOR AND NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY) RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE SUB-CONTRACTOR) IN PURSUANCE OF A CONTRACT WITH THE SUB-CONTRACTOR FOR CARRYING OUT, OR FOR THE SUPPLY OF LABOUR FOR CARRYING OUT, THE WHOLE OR ANY PART OF THE WORK UNDERTAKEN BY THE CON TRACTOR OR FOR SUPPLYING WHETHER WHOLLY OR PARTLY ANY LABOUR WHICH THE CONTR ACTOR HAS UNDERTAKEN TO SUPPLY SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE SUB-CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISS UE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMO UNT EQUAL TO ONE PER CENT OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THEREIN. XXXX XXXX XXXX 6. FROM THE ABOVE PROVISIONS OF SECTION 194C(1), IT IS CLEAR THAT THE PAYMENTS MADE BY INDIVIDUAL OR HINDU UNDIVIDED FAMILY DOES NOT COME WITHIN THE AMBIT OF TDS I.E. THE EXPENDITURE INCURRED FOR ADVERTISEMENT AS INDIVIDUAL AND HUF ARE SPECIFI CALLY EXCLUDED IN THE ABOVE PROVISIONS. THE PROVISION OF SUB-SECTION (2) APPLIES ONLY TO PAYMEN TS MADE TO SUB-CONTRACTORS AND NOT TO CONTRACTORS. ACCORDINGLY, ASSESSING OFFICER CAN NOT MADE DISALLOWANCE BY INVOKING PROVISIONS OF SECTION 40A(IA), AS PRESENT ASSESSEE BEING AN INDIV IDUAL IS NOT LIABLE TO DEDUCT TAX IN VIEW OF PROVISIONS OF SECTION 194C(1) AS EXISTED IN THE REL EVANT ASSESSMENT YEARS. NO DOUBT, ASSESSEES TURNOVER EXCEEDS THE MONETARY LIMIT AS SPECIFIED UN DER CLAUSE (A) OR CLAUSE (B) OF SECTION 44AB AND THE ASSESSEES ACCOUNTS ARE SUBJECT TO AUDIT AN D THE ASSESSEE HAS AUDITED HER ACCOUNTS AND FILED TAX AUDIT REPORT ALONG WITH RETURN OF INCOME. WE FIND THAT THE ASSESSING OFFICER HAS MADE DISALLOWANCE IN VIEW OF THE AMENDED PROVISIONS OF S ECTION 194C(1) BY THE FINANCE ACT, 2007 WITH EFFECT FROM 01.06.2007 WHEREIN IT IS PROPOSED TO A MEND SUB-SECTION (1) IN SECTION 194C SO AS TO INCLUDE PAYMENTS MADE BY ANY INDIVIDUAL OR HINDU UN DIVIDED FAMILY WHOSE TOTAL SALES / GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSIO N CARRIED ON BY HIM EXCEED MONETARY LIMIT SPECIFIED UNDER CLAUSE (A) OR CLAUSE (B) OR SECTION 44AB DURING THE FINANCIAL YEAR OR IMMEDIATELY PRECEDING FINANCIAL YEAR IN WHICH SUCH SUM IS CREDI TED OR PAID TO THE ACCOUNT OF THE CONTRACTOR. THIS AMENDMENT TAKES EFFECT FROM 1 ST DAY OF JUNE, 2007 AND IS APPLICABLE FOR AND FROM A SSESSMENT YEAR 2008-09. IN SECTION 194C(1) WITH EFFECT FROM 0 1.06.2007, BY THE FINANCE ACT, 2007, CLAUSE AS INSERTED, READS AS UNDER :- (K) ANY INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WH OSE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSIO N CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE (A) OR CLAUS E (B) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANC IAL YEAR IN WHICH SUCH SUM IS CREDITED OR PAID TO THE ACCOUNT OF THE CONTRACTOR, SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTH ER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO - 5 ITA NO. 281/K/2012 MANOJ KUMAR AGARWAL, AY:2007-08 (I) ONE PER CENT IN CASE OF ADVERTISING, (II) IN ANY OTHER CASE TWO PER CENT, OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THERE IN : PROVIDED THAT NO INDIVIDUAL OR A HINDU UNDIVIDED FA MILY SHALL BE LIABLE TO DEDUCT INCOME-TAX ON THE SUM CREDITED OR PAID TO THE ACCOUNT OF THE CONTRACTOR WHERE SUCH SUM IS CREDITED OR PAID EXCLUSIVELY FOR PERSONAL PURPOSES OF SUCH INDIVIDUAL OR ANY MEMBER OF HINDU UNDIVIDED FAMILY. 7. WE FIND FROM THE ARGUMENTS OF LD.SR. DR THAT REV ENUE WANT TO INVOKE PROVISIONS OF SUB-SECTION (2) OF SECTION 194C FOR FURTHERANCE OF THIS CASE BU T WE ARE OF THE CONSIDERED VIEW THAT SECTION 194C(2) WILL APPLY TO THE PAYMENTS MADE TO SUB-CONT RACTORS BY THE CONTRACTOR AND NOT BY THE ASSESSEE. IN THE PRESENT CASE, IT IS AN ADMITTED PO SITION THAT THE ASSESSEE HAS MADE PAYMENTS ON ADVERTISEMENT TO THE CONTRACTORS AND NOT TO SUB-CON TRACTORS. FURTHER AS REFERRED BY LD. COUNSEL FOR THE ASSESSEE, THIS PROVISION WAS EXPLAINED BY C BDT CIRCULAR NO.3 OF 2008 DATED 12.03.2008 WHICH IS REPORTED IN (2008)299 ITR 8 (STATUTE) AND THE RELEVANT CIRCULAR AS REPORTED AT PAGE 71, READS AS UNDER :- 54. EXPANSION OF SCOPE OF THE PROVISIONS OF SECTIO N 194C. 54.1 THE EXISTING PROVISIONS OF SUB-SECTION (1) OF SECTION 194C PROVIDED FOR DEDUCTION OF INCOME-TAX AT SOURCE FROM ANY SUM CRED ITED OR PAID TO THE RESIDENT CONTRACTOR FOR CARRYING OUT ANY WORK (INCLUDING SUP PLY OF LABOUR FOR CARRYING OUT ANY WORK) IN PURSUANCE OF A CONTRACT BETWEEN THE CO NTRACTOR AND THE GOVERNMENT, LOCAL AUTHORITIES, STATUTORY CORPORATIO NS, COMPANIES, CO-OPERATIVE SOCIETIES, STATUTORY AUTHORITIES ENGAGED IN PROVIDI NG HOUSING ACCOMMODATION, ETC., REGISTERED SOCIETIES, TRUSTS, UNIVERSITIES AN D FIRMS. THE RATE OF TDS IS 1% IN RESPECT OF ADVERTISING CONTRACTS AND 2% IN OTHER CA SES. 54.2 THE EXISTING PROVISIONS OF SUB-SECTION (1) OF SECTION 194C DID NOT PROVIDE FOR DEDUCTION OF TAX AT SOURCE ON PAYMENTS MADE BY AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY TO A CONTRACTOR. 54.3 CONSIDERING THE RISING NUMBER OF CONTRACTS BEI NG AWARDED BY INDIVIDUALS AND HUFS CARRYING ON BUSINESS OR PROFESSION AND THE INCREASING VOLUME OF SUCH PAYMENTS TO CONTRACTORS, IT WAS FELT THAT THERE IS NEED TO REQUIRE SUCH PERSONS TO DEDUCT TAX AT SOURCE FROM PAYMENTS MADE BY THEM TO CONTRACTORS. 54.4 THERE WOULD BE GENUINE DIFFICULTIES IF INDIVID UALS OR HUFS WITH SMALL BUSINESS TURNOVERS OR GROSS RECEIPTS OF PROFESSION ARE REQUIRED TO DEDUCT TAX AT SOURCE. AN EXCEPTION IN SUCH CASES WOULD BE JUSTIFI ED. SIMILARLY THE CONTRACTS AWARDED BY AN INDIVIDUAL OR A MEMBER OF HUF OF HUF EXCLUSIVELY FOR PERSONAL PURPOSES MERIT EXCLUSION. 54.5 ACCORDINGLY, THE FINANCE ACT, 2007, HAS SUBSTI TUTED THE SAID SUB-SECTION (1) TO INCLUDE IN ITS AMBIT SUCH INDIVIDUAL OR A HI NDU UNDIVIDED WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PRO FESSION CARRIED ON EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE (A) OR CLAUS E (B) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING FINANCIAL YEAR IN WHICH SUM IS CREDITED OR PAID TO THE ACCOUNT OF THE CONTRACTOR. THIS AMEN DMENT SHALL NOT APPLY IN RESPECT OF PAYMENTS MADE TO A CONTRACTOR BY ANY IND IVIDUAL OR A MEMBER OF A HINDU UNDIVIDED FAMILY EXCLUSIVELY FOR THEIR PERSON AL PURPOSES. 6 ITA NO. 281/K/2012 MANOJ KUMAR AGARWAL, AY:2007-08 54.6 APPLICABILITY - THIS AMENDMENT WILL TAKE EFFEC T FROM THE 1ST DAY OF JUNE, 2007. 8. IN VIEW OF THE ABOVE CLEAR PROVISIONS OF SECTION 194(1) AS EXISTING IN ASSESSMENT YEARS 2006-07 & 2007-08, I.E. RELEVANT ASSESSMENT YEARS IN THE PR ESENT APPEALS, IT IS CLEAR THAT THE ASSESSEE IS UNDER NO OBLIGATION TO DEDUCT TDS ON THE EXPENDITUR E OF ADVERTISEMENT, AS THE ASSESSEE BEING AN INDIVIDUAL, AND THE CLAIM OF THE ASSESSEE IS AS PER PROVISIONS OF LAW. ONCE THE ASSESSEE IS NOT LIABLE TO DEDUCT TDS UNDER THE PROVISION OF SECTION 194C(1 ), THE PROVISIONS OF SECTION 40A(IA) FOR MAKING DISALLOWANCE OF EXPENDITURE FOR NON-DEDUCTION OF TD S WILL NOT APPLY. WE FURTHER FIND THAT, IT IS NOT THE CASE OF THE REVENUE THAT THE EXPENSES ARE BOGUS OR UNREASONABLE OR EXCESSIVE BUT THE DISALLOWANCE IS MADE MERELY FOR NON-DEDUCTION OF TD S. ACCORDINGLY, WE ARE OF THE CONSIDERED VIEW THAT CIT(A) HAS RIGHTLY DELETED THE DISALLOWANCE AN D WE CONFIRM THE SAME. 7. IT IS A FACT THAT THE ASSESSEE IS AN INDIVIDUAL AND RELEVANT ASSESSMENT YEAR INVOLVED IS AY 2007-08. HENCE, THE PROVISIONS OF SECTION 194C OF THE ACT WILL NOT APPLY TO THE ASSESSEE AND ASSESSEE IS NOT LIABLE TO DEDUCT TDS. SO, NO DISAL LOWANCE U/S. 40(A)(IA) OF THE ACT CAN BE MADE. THIS ISSUE OF ASSESSEES APPEAL IS ALLOWED. 8. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. 9. ORDER IS PRONOUNCED IN THE OPEN COURT ON 21 ST NOVEMBER, 2013 . SD/- SD/- . . . . ''# ''# ''# ''# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21ST NOVEMBER, 2013 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT SHRI MANOJ KUMAR AGARWAL, THEMATHANI, LUTHUNIA, DIST. PASHIM MIDNAPORE-721101. 2 ./,- / RESPONDENT ADDL. CIT, RANGE-2, MIDNAPORE 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .