Krishi Utpadan Mandi Samiti, Lucknow V. Income -Tax Officer-3(2), Lucknow

ITA 31/LKW/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62156 (ITAT-LUCKNOW)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 19-06-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 24-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST
• Keywords: Opportunity of being heard
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B : LUCKNOW BEFORE SHRI S. K. YADAV, JUDICIAL MEMBER AND SHRI B. R. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 34 /LKW/ 12 ASSESSMENT YEAR: 2007 - 2008 M/S APALA CONSTRUCTION & DEVELOPERS VS. INCOME TAX OFFICER, PVT. LTD., RANGE - IV(4), 86, SUBHASH MARG, LUCKNOW. LUCKNOW. PAN:AABCA7719A (APPELLANT) (RESPONDENT) APPELLANT BY : RESPONDENT B Y : SMT. POOJA RAJ, D.R. DATE OF HEARING : 18 / 06 /201 2 DATE OF PRONOUNCEMENT : 20/06/2012 ORDER PER B. R. JAIN: THIS APPEAL BY ASSESSEE AGAINST THE ORDER DATED 02 / 11 /20 11 OF LEARNED CIT(A) - I , LUCKNOW RAISES AS MANY AS 8 GROUNDS CHALLENGING APPLICATION OF PROVISION OF SECTION 40 (A) (IA) OF THE ACT AND CONSEQUENT DISALLOWANCE OF DEDUCTION OF ` 1 4,77,500/ - . 2. DESPITE NOTICE NONE ATTENDS ON BEHALF OF ASSESSEE. IT WAS, THEREFORE, DECIDED TO HEAR LEARNED D.R. EX - PARTE QUA ASSESSEE WITH REFERENCE TO GROUND S IN APPEAL AS WELL AS MERITS OF THE CASE. 2 3. THE ASSESSEES CASE BEFORE THE ASSESSING OFFICER IS THAT T HE PROJECT CONSTRUCTION EXPENSES INCURRED IN TERMS OF A WRITTEN CONTRACT INCLUDED THE AMOUNT PAID FOR SUPPLY OF MATERIAL TO THE EXTENT OF ` 14,77,500/ - WHILE THE AMOUNT OF ` 1,20, 0 00/ - RELATED TO THE LABOUR EXPENSES. THE ASSESSING OFFICER, HOWEVER, DISREGARD ING THE ASSESSEES EXPLANATION, HELD THAT THE ASSESSEE COMPANY WAS LIABLE TO DEDUCT TAX AT SOURCE ON THE TOTAL PAYMENTS MADE TO THE CONTRACTOR M/S HAMALAYA MARBLE AND CONSTRUCTIONS AND THAT HAVING NOT BEEN DONE, PROCEEDED TO DISALLOW THE EXPENSES WITHIN TH E MEANING OF SECTION 40 (A) (IA) OF THE ACT. THE LEARNED CIT(A) CONFIRMED THE DISALLOWANCE. 4. HEARD LEARNED D.R. EX - PARTE QUA ASSESSEE. SUB SECTION (3) OF SECTION 194C OF THE ACT, WHICH IS RELEVANT TO THE ISSUE UNDER CONSIDERATION, READS AS UNDER: SECT ION 194C (3) WHERE ANY SUM IS PAID OR CREDITED FOR CARRYING OUT ANY WORK MENTIONED IN SUBCLAUSE (E) OF CLAUSE (IV) OF THE EXPLANATION, TAX SHALL BE DEDUCTED AT SOURCE (I) ON THE INVOICE VALUE EXCLUDING THE VALUE OF MATERIAL, IF SUCH VALUE IS MENTIONED SE PARATELY IN THE INVOICE; OR (II) ON THE WHOLE OF THE INVOICE VALUE, IF THE VALUE OF MATERIAL IS NOT MENTIONED SEPARATELY IN THE INVOICE. 5. ACCORDING TO THE AFORESAID PROVISION , AN ASSESSEE IS REQUIRED TO DEDUCT TAX ON THE WHOLE OF THE INVOICE VALUE WHERE THE VALUE OF MATERIAL IS NOT MENTIONED SEPARATELY IN THE INVOICE. IT HOWEVER, APPEARS THAT THE ASSESSEE HAS 3 LAID ON RECORD THE RUNNING BILLS OF THE CONTRACTOR BEFORE ANY PAYMEN T WAS MADE BY THE APPELLANT TO HIM. THE ASSESSING OFFICER, HOWEVER, DID NOT RECORD SATISFACTION THAT THE INVOICE PRODUCED BEFORE HIM DID NOT MENTION THE VALUE OF MATERIAL. THAT BEING SO AND IN CASE THE VALUE OF MATERIAL IS FOUND MENTIONED IN THE INVOICE , THE ASSESSEE SHALL NOT BE LIABLE TO DEDUCT TAX AT SOURCE ON THE VALUE OF SUCH MATERIAL INCLUDED IN THE INVOICE VALUE . THIS FACTUAL VERIFICATION HAS NOT BEEN MADE BY THE AUTHORITIES BELOW BEFORE PROCEEDING TO MAKE THE DISALLOWANCE OF WHOLE AMOUNT. WE, TH EREFORE, SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER BACK TO THE ASSESSING OFFICER FOR MAKING VERIFICATION OF FACTS AFRESH AND TAKE DECISION IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE AND EFFECTIVE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL STANDS ALLOWED. (THE ORDER PRONOUNCED IN THE OPEN COURT ON 20/06/2012 ) SD/. SD/. ( S. K. YADAV ) ( B. R. JAIN ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 20/06/2012 *SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR