ITO, New Delhi V. Smt. Shobha Rani Verma, New Delhi

ITA 303/DEL/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4472 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 03-04-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 19-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Assessee Lawyers: RAJAN MALIK
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO. 303 /DEL/201 2 A.Y. : 2008-09 INCOME TAX OFFICER, WARD 38(3), ROOM NO. 176, C.R. BUILDING, I.P. ESTATE, NEW DELHI VS. SMT. SHOBHA RANI VERMA, 1635/36, HIMMATGARH, BAZAR SITA RAM, DELHI 110 006 (PAN: ADSPV4640C) (ASSESSEE) (RESPONDENT) REVENUE BY : SH. KAUSHLENDRA TIWARI, SR. DR ASSESSEE BY : SH. RAJAN MALIK, ADV. ORDER PER H.S. SIDHU : JM THE REVENUE HAS FILED THIS APPEAL AGAINST THE IMP UGNED ORDER DATED 30.11.2011 OF THE LD. CIT(A)-XXVIII, NEW DELHI RELEVANT TO ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED IN THIS APPEAL READ AS UNDER: - 1. THE LD CIT (A) HAS GROSSLY ERRED IN DELETING THE ADDITION MADE BY THE AO DISALLOWING THE PAYMENTS MADE TO IATA AGENTS AMOUNTING TO RS. 50,90,546/- FOR NON DEDUCTION OF TDS BY 2 THE ASSESSEE, IN COMPLETE DISREGARD TO THE PROVISIONS OF SECTION 194C & 40(A)(IA) AND NOT APPRECIATING THE FACT THAT THE FACTS OF THE CASE OF THE JUDGEMENT QUOTED BY THE ASSESSE WERE ENTIRELY DIFFERENT FROM THE ASSESSEE. 2. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR MODIFY THE GROUNDS OF APPEAL AT ANY TIME. GIVEN TO THE ASSESSEE. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED HER RETURN OF INCOME ON 30.9.2008 DECLARING INCOME OF RS.2,95,960 /-. THE RETURN OF THE ASSESSEE WAS PROCESSED U/S. 143(1) OF THE INCO ME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT) AND THE CASE WAS SELECTED FOR COMPULSORY SCRUTINY. ACCORDINGLY, STATUTORY NOTICES W ERE ISSUED TO THE ASSESSEE AND SERVED UPON THE ASSESSEE. IN RESPON SE TO NOTICES, THE A.R. OF THE ASSESSEE ATTENDED THE PROCEEDINGS FRO M TIME TO TIME AND FILED THE NECESSARY DETAILS. BOOKS OF ACCOUNTS W ERE NOT PRODUCED FOR EXAMINATION, ON TEST CHECK BASIS. THE A SSESSEE IS ENGAGED IN THE BUSINESS OF FREIGHT SERVICES. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS DECLARED NET PROFIT OF RS. 295963/ ON TOTAL RECEIPTS OF RS. 8410141/- THEREBY GIVING A N ET PROFIT RATE OF 3.51% WHEREAS IN THE IMMEDIATE PRCEEEDING YEAR ON TO TAL RECEIPTS 3 OF RS. 1,51,66,317/- GP RATE OF 2.69% WAS DECLARED. ALTHOUGH THERE IS A FALL IN RECEIPTS IN COMPARISON TO LAST YEAR THE NP RATIO DURING THE YEAR IS BETTER IN COMPARISON TO LAST YEAR . SINCE NOTHING ADVERSE HAS BEEN NOTICED, THE TRADING RESULTS AS DECL ARED WERE ACCEPTED. AO NOTED DURING THE COURSE OF ASSESSMENT P ROCEEDINGS THAT THE ASSESSEE INCURRED FREIGHT AND SERVICES CHARG ES AMOUNTING TO RS. 64,21,315/- AND AIRPORT EXPENSES AMOUNTING TO R S. 1,72,815/-, WITHOUT DEDUCTING TDS ON THESE EXPENSES. AO ASKED THE ASSESSEE VIDE ORDER SHEET ENTRY DATED 15.12.2010 AS TO WHY PROVISION OF SECTION 40A(IA) ARE NOT ATTRACTED. AO VI DE QUESTIONNAIRE DATED 20.12.2010, ASKED TO GIVE PARTWISE DETAIL OF EX PENSES INCURRED, THE ASSESSEE DID NOT FILE THE COPY OF ACCOU NT OF THE SAID PARTIES OR PRODUCE BOOKS OF ACCOUNT FOR VERIFICATION . HOWEVER, THE ASSESSEE HAS STATED THAT SHE WAS NOT REQUIRED TO DEDUCT T DS, AS SHE IS ONLY A SUB AGENT AND THE LIABILITY TO DEDUCT T DS FALLS ON THE PRINCIPLES FOR WHOM SHE WORKS AND NOT HERS. AO OBSER VED THAT PROVISIONS OF EXPLANATION III TO SECTION 194C(2) ARE EXTREMELY CLEAR IN THIS REGARD. BY VIRTUE OF THIS PROVISION, AT THE TI ME OF PAYMENT OR CREDIT TO THE ACCOUNT OF THE SAID PARTIES THE ASSESSEE WAS REQUIRED TO DEDUCT TDS. SINCE THE ASSESSEE AHS FAILED TO COMP LY WITH THIS PROVISION, PROVISION OF SECTION 40A(IA) ARE ATTRACTED IN THIS CASE AND ACCORDINGLY THE ASSESSEE WAS LIABLE TO DEDUCT TDS. ACC ORDINGLY, THE 4 AO ASSESSED THE INCOME OF THE ASSESSEE AT RS. 69,18,6 60/- VIDE HIS ASSESSMENT ORDER DATED 28.12.1010 PASSED U/S. 143(3) OF THE ACT. AGAINST THE AFORESAID ASSESSMENT ORDER, ASSESSEE AP PEALED BEFORE THE LD. CIT(A)-XXVIII, NEW DELHI, WHO VIDE HIS IMPUG NED ORDER DATED 30.11.2011 HAS PARTLY ALLOWED THE APPEAL OF TH E ASSESSEE. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), THE REVENU E IS IN APPEAL BEFORE THE TRIBUNAL. 3. LD. DR RELIED UPON THE ORDER OF THE AO AND REITE RATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 4. ON THE CONTRARY, LD. COUNSEL OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS, ESPECIALLY THE IMPUGNED ORDER. WE FIND THAT PAYMENTS OF RS. 38,11,727/- AND RS. 13,78,819/- MADE TO SKYWAYS AIR SERVICES PVT. LTD. AND INDAIR CARRIERS PVT. LTD. RESPECTIVELY, AGGREGATING TO RS. 50,90,546/- THAT SINCE THE ASSESSEE WAS ACTING AS THEIR SUB- AGENT, WHICH FACT IS SUPPORTED BY THE CONFIRMATIONS/T DS CERTIFICATES OF THESE TWO PARTIES BEING LATA AGENTS, AND THERE BEING NO CONTRACT BETWEEN THE ASSESSEE AND THE ABOVE LATA AGENTS, AND ON THE CONTRARY, THE LATA AGENTS TREATING THE ASSESSEE AS THEI R SUB-AGENT, SHE WAS NOT REQUIRED TO DEDUCT TDS U/S 194C OF THE INC OME-TAX ACT 5 AND CONSEQUENTLY NO DISALLOWANCE U/S. 40(A)(IA) COU LD BE MADE. WE FURTHER FIND THAT WRITING THE BOOKS IN A FORM WHICH DOE S NOT REFLECT MERE COMMISSION BUT ENTERS THE RECEIPTS FROM THE EXPO RTERS ON ONE SIDE AND THE PAYMENTS TO THE LATA AGENTS ON THE OTHER SIDE IN THE PROFIT & LOSS ACCOUNT ALSO DO NOT COME IN A WAY TO ADJ UDICATE THE APPLICABILITY OF SECTION 194C BETWEEN THE ASSESSEE AN D THE LATA AGENTS. WHAT IS IMPORTANT TO BE SEEN IS WHETHER THE ASSESSEE HAS APPOINTED THE LATA AGENTS AS THEIR CONTRACTORS, WHICH IN THIS CASE IS MISSING. ON THE CONTRARY IT IS THE LATA AGENTS WHO HA VE APPOINTED THE ASSESSEE AS THEIR SUB AGENT. ON THE SIMILAR GROUND THE REMARKS OF THE AUDITOR THAT NO TAX HAS BEEN DEDUCTED CANNOT COM E IN A WAY TO HOLD THAT THE TDS HAS NOT BEEN DEDUCTED ON THE PAY MENTS MADE TO LATA AGENTS. THAT COULD BE ONLY PARTLY TRUE IN THE C ASE OF OTHER PAYMENTS, BARRING THE PAYMENTS TO TWO LATA AGENTS AS THE DETAILS FOR THE SAME HAVE NOT BEEN FURNISHED ON THE GROUNDS O F THE ASSESSEE HAVING GONE OUT OF THE BUSINESS AND BED RID DEN DUE TO ACUTE ILLNESS. THEREFORE, IN OUR CONSIDERED OPINION , THE LD. CIT(A) HAS RIGHTLY GAVE THE RELIEF OF RS. 50,90,546/- OUT OF TOTAL DISALLOWANCE/ADDITION OF RS. 65,94,130/- AND THUS, TH E BALANCE DISALLOWANCE OF RS. 15,03,584/- WAS CONFIRMED, WHI CH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE SAME AND REJECT THE GROUND RAISED BY THE REVENUE. 6 6. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T STANDS DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 28/09/2017. SD/- SD/- [PRASHANT MAHARISHI] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 28/09/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. ASSESSEE - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHE S