ITO (TDS) 2(3), MUMBAI V. MEGA FRIGHT MOVERS LTD, MUMBAI

ITA 3128/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2870 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 05-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Non-deduction of tax
• Section: 201(1); 131

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NOS.3128 TO 3131/MUM/2014 ASSESSMENT YEARS: 2003-04 TO 2006-07 ITO(TDS)-2(3), R. NO.708, 7 TH FLOOR, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD, MUMBAI-400002 / VS. M/S MEGA FREIGHT MOVERS LIMITED, 39, MEHTA CHAMBERS, 127A KALYAN STREET, MUMBAI-400009 ( / REVENUE) ( !'# $ /ASSESSEE) PAN. NO. AA BCM9984D / REVENUE BY SHRI VIJAY KUMAR SONI !'# $ / ASSESSEE BY SHRI AMIT AGRAWAL % & $ ' / DATE OF HEA RING : 28/10/2015 & $ ' / DATE OF ORDER: 06/11/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) ALL THESE APPEALS ARE BY THE REVENUE FOR ASSESSMEN T YEARS 2003-04 TO 2006-07, AGGRIEVED BY THE IMPUGNED ORDERS ALL DATED 14/02/2014 OF THE LD. FIRST APPELLATE AUT HORITY, MUMBAI. THE COMMON GROUND RAISED IN THIS APPEAL PE RTAINS TO ADMITTING ADDITIONAL EVIDENCE PERTAINING TO LOR RY AND M/S MEGA FREIGHT MOVERS LTD. ITA NOS. 3128 TO 3131/MUM/2014 2 FREIGHT HIRE CHARGES WITHOUT GRANTING OPPORTUNITIE S TO THE ASSESSING OFFICER VIOLATING THE PROVISIONS OF RULE 46A OF THE INCOME TAX RULES AND FURTHER ERRED IN DELETING THE ADDITION MADE U/S 201(1)/201(1A) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). 2. DURING THE HEARING, THE LD. DR, SHRI VIJAY KUM AR SONI, ADVANCED HIS ARGUMENTS WHICH ARE IDENTICAL TO THE GROUND RAISED BY CONTENDING THAT THERE IS VIOLATION OF THE PROVISION OF RULE 46A OF THE RULES AND FURTHER DELE TING THE IMPUGNED ADDITIONS IN THE RESPECTIVE APPEALS. ON T HE OTHER HAND, SHRI AMIT AGRAWAL, LD. COUNSEL FOR THE ASSESS EE, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDERS. THE LD. REPRESENTATIVES FROM BOTH SIDES CONTENDED T HAT THE ISSUE IS IDENTICAL IN ALL THE APPEALS, THEREFORE, T HESE CAN BE HEARD TOGETHER. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE IS A TRANSPORT CONTRACTOR ENG AGED IN TRANSPORTING BULK CARGO/PULP, RAW MATERIALS FROM ON E PLACE TO OTHER AND ALSO TRANSPORTING FINISH GOODS FROM FA CTORY TO SALE DEPOT AT VARIOUS LOCATIONS IN THE COUNTRY. A S URVEY ACTION (TDS) WAS CONDUCTED ON 13/09/2006. STATEMENT OF ACCOUNTANT OF THE ASSESSEE COMPANY WAS RECORDED U/S 131 OF THE ACT. THE AUTHORIZED REPRESENTATIVE OF THE ASSE SSEE APPEARED ON BEHALF OF THE ASSESSEE, DURING SURVEY PROCEEDINGS, AND FILED DETAILS CALLED FOR FROM TIME TO TIME. IT WAS NOTICED THAT THE ASSESSEE DEBITED AN AMOUNT OF M/S MEGA FREIGHT MOVERS LTD. ITA NOS. 3128 TO 3131/MUM/2014 3 RS.12,07,67,401/- (F.Y. 2002-03) UNDER THE HEAD LOR RY AND FREIGHT HIRE CHARGES AND DEDUCTED TAX AT THE RATE O F 1.1% ON THE ABOVE PAYMENT. THE ASSESSEE WAS ASKED TO JUSTIF Y THE DEDUCTED TAX OF RS.13,28,441/- . THE ASSESSEE EXPLA INED THAT THIS DEDUCTION IS ON ACCOUNT OF TDS AT THE PRESCRIB ED RATE. HOWEVER, THE ASSESSING OFFICER WAS OF THE VIEW, THA T ASSESSEE HAS COMMITTED DEFAULT U/S 201(1)/201(1A) OF THE ACT . THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY, WHEREIN, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOUND SOME CONTRADICTIONS IN THE OPIN ION OF THE ASSESSING OFFICER AS DETAILED IN PARA 4.4 ONWARDS, WHICH IS REPRODUCED HEREUNDER FOR READY REFERENCE:- ITA NO.3129/MUM/2014 4. 4. I HAVE CONSIDERED THE SAME A READING OF THE ASSESSMENT ORDER MAKES IT CLEAR THAT THE FINDINGS MADE BY AO A ND OBSERVATION DO NOT GO HAND IN HAND AND ARE RATHER S ELF CONTRADICTORY FOR EXAMPLE IT IS COMING OUT FROM THE PARA 3 OF THE ORDER FOR AY 2003-04 THAT ON AN AMOUN T DEBITED UNDER THE HEAD 'LORRY AND FREIGHT HIRE CHAR GES' IN THE PROFIT AND LOSS ACCOUNT OF A Y2005-06 RS 12,07,67,401/- THE OFFICER HAS ALSO NOTED THAT TAX WAS DEDUCTED AT THE RATE OF 1.1 % ON THE ABOVE PAYMENT AT RS 13,28,441/-. HOWEVER IN PARA BELOW THAT ONLY IN THE SAME ORDER, AO HAS SAID THAT THE ASSESSEE COMPANY IS AN ASSESSEE IN DEFAULT FOR ITS FAILURE TO DEDUCT TAX AT SOURCE ON RS 12,07,67,401/- AT THE RATE 1.1% INCLUDING SURCHARGE AND THE ASSESSING OFFICER ACCORDINGLY HAS LEVIED TAX OF RS 13,28 441/- UNDER SECTION 201 (1) AND INTEREST UNDER SECT ION 201 (1 A) ON AN AMOUNT RS 12,75,303/- THUS IN ALL TOTAL RS 26,03,744/-. 4 3 ON THE OTHER HAND APPELLANT HAS FURNISHED GENE RAL LEDGER FOR THE PERIOD FROM 1ST OF APRIL 2002TO31T O F MARCH. 2003 OF LORRY HIRE CHARGES ACCOUNT ALONG WITH DETAI LS OF TDS M/S MEGA FREIGHT MOVERS LTD. ITA NOS. 3128 TO 3131/MUM/2014 4 MADE OF RS.2,60,580/- IN SUPPORT OF THE SAME APPEL LANT HAS ALSO FURNISHED COPIES OF CHALLANS FOR PAYMENT OF TAXES. 4.4. INCIDENTALLY APPELLANT HAS ALSO BROUGHT THIS FACT O N RECORD THAT DURING THE PERIOD RELEVANT TO ASSESSMEN T YEAR 2003-04, 2004-05 2005-06 FORM 15. I WERE NOT APPLIC ABLE FOR TRANSPORTERS AND HENCE THERE WAS NO QUESTION OF FUR NISHING THE SAME BEFORE THE ASSESSING OFFICER IT IS FOR THE REA SON THAT FORM 15 I WERE MADE APPLICABLE ONLY DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2006 -07, AND FOR THAT YEARS AT THE MOST THEY ARE AT FAULT I HAVE FOUND THAT 15 I F ORMS MADE APPLICABLE TO TRANSPORTERS W.E.F. 17.06.2005 THE A Y 2005-06 WAS TOTALLY OUT OF THIS ISSUE. 4.4. THE APPELLANT HAS ALSO SUBMITTED THAT THE TAX WAS NOT DEDUCTED ON EACH AND EVERY PAYMENT MADE TO TRUCK OWNERS FOR THE JOB OF TRANSPORTATION TAKEN FROM THEM FOR THE REASON THAT APPELLANT HIRES THESE TRUCKS AS PER THE REQUIR EMENT AND THEY ARE NOT AWARE THAT IN THE FUTURE SAME TRUCK WILL BE HIRED BY THEM ARE NOT, AS THEY DO NOT HAVE ANY RUNNING OR AL OR WRITTEN CONTRACT WITH THE TRANSPORTERS OR THE TRUCK OWNERS IN VIEW OF THIS EACH TRANSPORT CONTRACTORS ARE SEPARATE CONTRACT AND HENCE IF THE TOTAL AMOUNT PAID FOR A PARTICULAR TRIP IS MORE THAN RS 20,000/ THEN ONLY TAXES ARE DEDUCTED AS PER PROVISI ONS OF SECTION 194 C OF I T ACT APPELLANT HAS ALSO SUBM ITTED THAT ADVANCES PAID TO THE TRUCK OWNERS OR THE DRIVERS AT THE START OF JOURNEY AND AFTER THE TRIP IS OVER, IS DELIVERED AS BALANCES PAID TO THEM AT THE DESTINATION. IN SUPPORT OF THEIR PLEA THAT SAME HAS TO BE TREATED A SEPARATE CONTRACT FOR EVERY SINGLE JOURNEY, THE APPELLANT HAVE RELIED UPON THE DECISION GIVEN IN TH E CASE OF JURISDICTIONAL ITAT MUMBAI IN CITY TRANSPORT CORPOR ATION VERSUS ITO 13 SOT 479 AND AGAIN IN CASE OF ITO(TDS) VERSUS BHORUKA ROADLINES LTD. 300 ITR 193 MUM. THEN THE AP PELLANT HAS ALSO RELIED UPON CBDT CIRCULAR NO. 715 AND STAT ED THAT AS M/S MEGA FREIGHT MOVERS LTD. ITA NOS. 3128 TO 3131/MUM/2014 5 PER THAT CIRCULAR EACH GR TO BE TREATED AS A SEPARA TE CONTRACT FOR TDS. 4.5 AFTER GOING THROUGH THE SAME AND FINDING THAT A 0 HAS MENTIONED AND CONSIDERED AMOUNT OF EXPENSES DEBITED IN P&L A/C ' FOR A Y 2003-04 WRONGLY ALSO, I AM IN AGREEMENT WITH THE APPELLANT THAT HAVING PAID DUE TAXES WHEREVER THEY WERE APPLICABLE, THE APPELLANT CANNOT BE HELD AS AN ASSESSEE IN DEFAULT AND ACCORDINGLY NO TAX IS LEVIABLE U/S 201 (1) AND U/S 201 (1A) OF I T ACT 1961. ACCORDINGLY THE ACTION OF A0 TO HOLD THE APPELLANT AS AN ASSESSEE IN DEFAULT AND CONSEQUENTLY LEVY TAX AND INTEREST UNDER SECTION 201 (1) AND 201 (1 A) OF I T ACT FOR A TOTAL DEMAND OF RS 26,03,744/- FOR A Y 2003-04 AND RS. 29,58,830/- FOR A Y 2004-05 ARE DELETED HERE WITH. THESE GROUNDS TAKEN IN THESE APPEALS ARE ALLOWED. 2.2. IF THE AFORESAID UNCONTROVERTED FACTUAL FINDI NG RECORDED BY THE LD. COMMISSIONER OF INCOME TAX (APP EALS) IS ANALYZED, WE NOTE THAT THE LD. ASSESSING OFFICER HI MSELF MENTIONED IN THE ORDER THAT THE ASSESSEE DEDUCTED T DS AT THE RATE OF 1.1% ON THE IMPUGNED PAYMENTS, WHEREAS, IN THE LATER PARTS, HE FOUND THE ASSESSEE IN DEFAULT U/S 2 01(1) AND FURTHER INTEREST U/S 201(1A) OF THE ACT. THIS STAND OF THE ASSESSING OFFICER IS ITSELF CONTRADICTORY. IN PARA 4.5 OF THE IMPUGNED ORDER, THERE IS UNCONTROVERTED FINDING THA T DUE TAXES WERE PAID, WHEREVER APPLICABLE, THEREFORE, IT CAN BE CONCLUDED THAT NO DEFAULT WAS COMMITTED BY THE ASSE SSEE U/S 201(1) AND 201(1A) OF THE ACT, CONSEQUENTLY, WE FIND NO INFIRMITY IN THE IMPUGNED ORDERS OF THE LD. COMMISS IONER OF M/S MEGA FREIGHT MOVERS LTD. ITA NOS. 3128 TO 3131/MUM/2014 6 INCOME TAX (APPEALS) WITH RESPECT TO LORRY AND FREI GHT HIRE CHARGES, THEREFORE, ALL THE APPEALS ON THIS ISSUE A RE HAVING NO MERIT, THEREFORE, DISMISSED. 2.3. IN ITA NO.3131/MUM/2014 (A.Y. 2006-07), ANOTH ER GROUND HAS BEEN RAISED BY THE REVENUE WITH RESPECT TO IDENTICAL DEFAULT ON ACCOUNT OF PLATINUM JUBILEE E XPENSES. WE NOTE THAT THIS ISSUE HAS BEEN DISCUSSED IN PARA 6 OF THE IMPUGNED ORDER AND THE ISSUE WAS DECIDED FOR A.Y. 2 005-06 RESTRICTING THE DISALLOWANCE TO A CERTAIN LIMIT AND NO SUCH CLAIM WAS MADE FOR THE IMPUGNED ASSESSMENT YEAR. TH E LD. COMMISSIONER OF INCOME TAX (APPEALS) DULY EXAMINED THE PROFIT AND LOSS ACCOUNT FILED FOR A.Y. 2006-07 AND FOUND THE CLAIM OF THE ASSESSEE TO BE FACTUALLY CORRECT, THER EFORE, WE FIND NO INFIRMITY IN THE CONCLUSION OF THE LD. COMM ISSIONER OF INCOME TAX (APPEALS). FINALLY, ALL THE APPEALS OF THE REVENUE ARE HAVING NO MERIT, CONSEQUENTLY, DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 28/10/2015. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % MUMBAI; ( DATED : 06/11/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. M/S MEGA FREIGHT MOVERS LTD. ITA NOS. 3128 TO 3131/MUM/2014 7 3. 0 0 1$ ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1$ / CIT(A)- , MUMBAI 5. 34 .$ ! , 0 *+' *! 5 , % / DR, ITAT, MUMBAI 6. 6' 7% / GUARD FILE. / BY ORDER, /3+$ .$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI.