The DCIT, Circle-9, Surat V. M/s. D.P.Vekariya, Surat

ITA 2864/AHD/2011

• Counselvise Citation: 286420514 RSA 2011
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 03-10-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 18-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: K C MATHEWS SHRI R N VEPARI A
• Section: 194C

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BENCH, AHMEDABAD . , !' # $ $ $ $ % &', # BEFORE SHRI A.MOHAN ALANKAMONY,ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER APPEAL(S) /CO BY APPELLANT VS. RESPONDENT SL. NO(S). ITA NO(S) / CO NO. ASSESSMENT YEAR(S) APPELLANT (S) RESPONDENT(S) 1. 2864/AHD/2011 2008-09 THE DY.CIT CIRCLE-9 SURAT M/S.D.P.VEKARIYA D-302, SARTHI COMPLEX DOCTOR HOUSE HIRABAUG, VARACHHA RD SURAT 395 006 PAN : AABFD 8442 Q 2. 2270/AHD/2012 2009-10 -DO-REVENUE -DO-ASSESSEE 3. CO NO.243/AHD/2012 (IN ITA NO.2270/AHD/12) 2009-10 ASSESSEE REVENUE REVENUE BY : SHRI K.C. MATHEWS, CIT-DR ASSESSEE BY : SHRI R.N.VEPARI, AR %$( ) '' / / / / DATE OF HEARING : 03/10/2013 +, ) '' / DATE OF PRONOUNCEMENT : 25/10/2013 !- / O R D E R PER BENCH : BOTH THESE APPEALS BY THE REVENUE ARE DIRECTED A GAINST THE SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME T AX(APPEALS)-V, SRUAT (CIT(A) FOR SHORT) DATED 05/07/2011 & 11/07/2012 PERTAINING TO ASSESSMENT YEARS (AYS) 2008-09 & 2009-10 RESPECTIVE LY AND THE ASSESSEE IS IN CROSS-OBJECTION FOR AY 2009-10. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEALS:- ITA NO.2864/AHD/2011 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION BY DIS ALLOWING RS.97,41,084/- U/S.40A(IA) OF THE ACT FOR DEDUCTING OF TAX IN RESPECT ITA NOS.2864/AHD/11 & 2270/AHD/12 (BY REVENUE) AND CO NO.243/AHD/2012 - AY 2009-10 (BY ASSESSEE) DCIT VS.D.P.VEKARIA AYS 2008-09 & 2009-10 - 2 - OF PAYMENT TO SUB-CONTRACTS U/S.194C OF THE ACT INS TEAD OF 194-I OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) HAS ERRED IN RESTRICTING THE ADDITION TO RS.2,94,132/- AS AGAINST DISALLOWANCE MADE BY THE A.O. AT RS.12,41,4 89/- U/S.40A(IA) OF THE ACT IN RESPECT OF INTEREST PAID TO TML FINANCE LTD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O . 4. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.C IT(A) BE SET-ASIDE AND THAT OF THE A.O. BE RESTORED. ITA NO.2270/AHD/2012 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION BY DIS ALLOWING RS.3,10,27,262/- U/S.40A(IA) OF THE ACT FOR DEDUCTI NG OF TAX IN RESPECT OF PAYMENTS FOR JCB USAGE U/S.194C OF THE A CT INSTEAD OF 194-I OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE U/S.40A(IA) CONSIDERING THE FACT THAT JCB USAGE CHARGES INVOLVED TAX DEDUCTION U/S.194-I AND NOT UN DER SECTION 194C AS RIGHTLY HELD BY THE AO AS SUCH PAYMENTS MAD E WAS IN THE NATURE OF JCB HIRE CHARGES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O . 4. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.C IT(A) BE SET-ASIDE AND THAT OF THE A.O. BE RESTORED. 2. THE LD.DR OF THE REVENUE HAS SUPPORTED THE ORDE R OF THE AO, WHEREAS LD.COUNSEL FOR THE ASSESSEE HAS SUPPORTED THE ORDER OF THE LD.CIT(A). LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSU E REGARDING FIRST GROUND OF APPEALS IS COVERED IN FAVOUR ASSESSEE BY THE JUDGEM ENT OF HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF C IT(TDS) VS. RELIANCE ENGINEERING ASSOCIATES (P.) LTD. REPORTED AT (2012) 209 TAXMAN 351 / 21 TAXMANN.COM 539 (GUJ.). HE ALSO RELIED ON AN ANOTH ER JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF C IT VS. SHREE MAHALAXMI ITA NOS.2864/AHD/11 & 2270/AHD/12 (BY REVENUE) AND CO NO.243/AHD/2012 - AY 2009-10 (BY ASSESSEE) DCIT VS.D.P.VEKARIA AYS 2008-09 & 2009-10 - 3 - TRANSPORT CO. REPORTED AT (2011) 339 ITR 484 (GUJ.) AND SUBMITTED THAT THIS ISSUE IS ALSO COVERED IN FAVOUR OF ASSESSEE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE JUDGEMENTS CITED BY THE LD.AR OF THE A SSESSEE. WE FIND THAT REGARDING THE ISSUE IN RESPECT OF DISALLOWANCES MAD E BY THE AO IN BOTH THE YEARS ON ACCOUNT OF PAYMENT TO SUB-CONTRACTS/JCB US AGE OF RS.97,41,084/- FOR AY 2008-09 AND RS.3,10,27,262/- FOR AY 2009-10, THE TDS WAS REQUIRED TO BE DEDUCTED BY THE ASSESSEE U/S.194-I, WHEREAS THE ASS ESSEE HAS DEDUCTED THE TDS AT A LESSER RATE U/S.194-C OF THE ACT, AND THEREFOR E THIS AMOUNTS ARE TO BE DISALLOWED U/S.40A(IA) OF THE ACT IN BOTH THE YEARS . THE LD.CIT(A) HAS GIVEN A CLEAR-CUT FINDING IN PARAGRAPH NO.6 OF HIS ORDER(S) THAT IT WAS HELD BY THE LD.CIT(A)S-I VIDE HIS ORDER DATED 30/09/2010 IN A SSESSEES OWN CASE WHILE ADJUDICATING THE ISSUES RAISED IN THE ORDER PASSED U/S.2901(1) & 201(1A) OF THE ACT THAT THE ASSESSEE HAS RIGHTLY DEDUCTED THE TDS U/S.194-C OF THE ACT. AFTER MAKING HIS OBSERVATION, LD.CIT(A) HAS DELETED THE D ISALLOWANCES IN BOTH THE YEARS. AS PER THE TWO JUDGEMENTS OF HONBLE JURIS DICTIONAL HIGH COURT CITED BY THE LD.COUNSEL FOR THE ASSESSEE AS NOTED ABOVE, IT WAS HELD IN THE CASE OF CIT(TDS) VS. RELIANCE ENGINEERING ASSOCIATES (P.) L TD. BY THE HONBLE JURISDICTIONAL HIGH COURT THAT AGREEMENT FOR HIRING SERVICES OF CONTRACTORS FOR RENDERING TRANSPORTATION SERVICES FOR GOODS AND PAS SENGERS BY BUSES, CARS, SUMOS, UTILITY VANS, ETC., WOULD BE COVERED U/S.194 -C AND NOT U/S.194-I OF THE ACT. IN THE CASE OF CIT VS. SHREE MAHALAXMI TRANSP ORT CO., IT WAS HELD THAT THE PAYMENT MADE TO CONTRACTORS FOR HIRING DUMPERS IS NOT RENT FOR MACHINERY OR EQUIPMENT BUT PAYMENT FOR WORKS CONTRACT OF SHIF TING OF GOODS FROM ONE PLACE TO ANOTHER, HENCE SECTION 194C IS APPLICABLE AND NOT SECTION 194-I OF THE ITA NOS.2864/AHD/11 & 2270/AHD/12 (BY REVENUE) AND CO NO.243/AHD/2012 - AY 2009-10 (BY ASSESSEE) DCIT VS.D.P.VEKARIA AYS 2008-09 & 2009-10 - 4 - ACT. RESPECTFULLY FOLLOWING THESE TWO JUDGEMENTS O F HONBLE JURISDICTIONAL HIGH COURT, WE DECLINE TO INTERFERE WITH THE ORDER( S) OF THE LD.CIT(A) REGARDING FIRST ISSUE AND, ACCORDINGLY, GROUND NOD. 1 IS REJECTED. 4. REGARDING SECOND GROUND OF APPEAL, WE FIND THAT THE AO HAS HIMSELF HAS NOTED IN PARAGRAPH NO.6.1. OF THE ASSESSMENT OR DER THAT FOR THE FY 2007- 08, THE AMOUNT OF INTEREST PAID TO TML FINANCE LTD. WAS RS.2,94,132/- AS AGAINST MENTIONED AT RS.12,41,489/-. EVEN AFTER NO TING THIS, THE AO HAS MADE DISALLOWANCE OF RS.12,41,489/- WHICH HAS BEEN RESTR ICTED BY LD.CIT(A) AN AMOUNT OF INTEREST PAYMENT OF RS.2,94,132/-. SIMIL AR VIEW WAS TAKEN BY THE LD.CIT(A) FOR AY 2009-10 ALSO. UNDER THESE FACTS, NO INTERFERENCE IS CALLED FOR IN THE ORDER(S) OF THE LD.CIT(A) ON THIS ISSUE IN BOTH THE YEARS. GROUND IS REJECTED. 5. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. 6. NOW, WE TAKE UP THE CROSS OBJECTION NO.243/AHD/2 012 (IN ITA NO.2270/AHD/2012 FOR AY 2009-10 FILED BY THE ASSESS EE. IN THIS CROSS- OBJECTION, THE ASSESSEE HAS RAISED THE FOLLOWING G ROUNDS:- (1) THE LEARNED COMMISSIONER OF INCOME-TAX(APPEAL S) ERRED IN CONFIRMING DISALLOWANCE U/S.40(A)(IA) IN RESPECT OF PAYMENT OF INTEREST TO TML FINANCE LTD. WHEN THE TAX WAS NO T DEDUCTED FROM AMOUNTS PAID TO TML FINANCE LTD. AND NOT FROM INTEREST PAYABLE TO IT. (2) THE APPELLANT, THEREFORE, SUBMITS THAT IN VIEW OF THE ABOVE, THIS DISALLOWANCE IS REQUIRED TO BE DELETED. (3) THE RESPONDENT CRAVES LEAVE TO ADD, ALTER OR VA RY AND OF THE GROUNDS OF CROSS OBJECTIONS. ITA NOS.2864/AHD/11 & 2270/AHD/12 (BY REVENUE) AND CO NO.243/AHD/2012 - AY 2009-10 (BY ASSESSEE) DCIT VS.D.P.VEKARIA AYS 2008-09 & 2009-10 - 5 - 6.1. SINCE WE HAVE DISMISSED THE APPEAL OF THE REVE NUE FOR AY 2009- 10 IN ASSESSEES OWN CASE(SUPRA), THE CROSS-OBJECTI ON FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND THE SAME IS DIS MISSED AS INFRUCTUOUS. 7. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE REVENUE AND CROSS-OBJECTION FILED BY THE ASSESSEE ARE DISMISSED . ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE SD/- SD/- (. ) (% &') !' # # ( A. MOHAN ALANKAMONY ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 25 /10 /2013 0.., $.../ T.C. NAIR, SR. PS !- ) 1'2 3!2,' !- ) 1'2 3!2,' !- ) 1'2 3!2,' !- ) 1'2 3!2,'/ COPY OF THE ORDER FORWARDED TO : 1. 45 / THE APPELLANT 2. 1645 / THE RESPONDENT. 3. ' %7 / CONCERNED CIT 4. %7() / THE CIT(A)-V, SURAT 5. 2$&8 1' , , / DR, ITAT, AHMEDABAD 6. 89 :( / GUARD FILE. !-% !-% !-% !-% / BY ORDER, 62' 1' //TRUE COPY// ; ;; ;/ // / < < < < ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD ORDER PRONOUNCED IN THE COURT ON FRIDAY THE 25 TH OCTOBER,2013 SD/- SD/- KUL BHARAT(J.M.) NS SAINI(A.M.) ITA NOS.2864/AHD/11 & 2270/AHD/12 (BY REVENUE) AND CO NO.243/AHD/2012 - AY 2009-10 (BY ASSESSEE) DCIT VS.D.P.VEKARIA AYS 2008-09 & 2009-10 - 6 - 1. DATE OF DICTATION .. 7.10.13 (DICTATION-PAD 8 PAG ES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 8.10.13 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.25.10.13 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25.10.13 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER