The ITO, Ward-2(2)(1), Ahmedabad V. Shri Chandrakantbhai Shantilal Shah, Ahmedabad

ITA 3342/AHD/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1783 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 13-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS; Set aside
• Section: 143(3); 40(a)(ia); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 3342/AHD/2016 (ASSESSMENT YEAR: 2012-13) THE INCOME TAX OFFICER, WARD-2(2)(1), AHMEDABAD V/S SHRI CHANDRAKANTBHAI SHAH, 13, PRATIMA PARK, NR. DHARTI VIKAS MANDAL, NARANPURA, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: ACJPS9593F APPELLANT BY : SHRI MUDIT NAGPAL, SR. D. R. RESPONDENT BY : NONE ( )/ ORDER DATE OF HEARING : 16-05-2019 DATE OF PRONOUNCEMENT : 17 -07-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LD. CIT(A)-10, AHMEDABAD DATED 28.09.2016 PERTAINING TO A.Y. 2008-09 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: ITA NO. 3342 /AHD/2016 . A.Y. 2012-1 3 2 1. THE LD.CIT(A) HAS ERRED IN LAW AND FACTS IN DELETING THE ADDITION OF RS.1,47,92,210/- U/S.40(A)(IA) OF THE ACT MADE BY T HE AO. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT (A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE L D. CIT (A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED TO TH E ABOVE EXTENT. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. 2. THIS IS THE SECOND ROUND BEFORE THE ITAT AND CO-ORD INATE BENCH IN ITA NO. 2149 & 2175/AHD/2012 DATED 25.07.2013 REMITTED THE CASE TO THE FILE OF THE ASSESSING OFFICER WITH THE FOLLOWING DIRECTION: '... WE HAVE HEARD THE RIVAL SUBMISSION AND CAREFULL Y PERUSED THE MATERIALS ON RECORD AND THE ORDERS OF THE REVENUE AUTHORITIES. F ROM EITHER ORDER OF THE REVENUE, IF IS NOT ESTABLISHED THAT THERE WAS A CON TRACT EXISTING BETWEEN THE ASSESSEE AND OTHER PARTIES FOR TRANSPORTATION OF GO ODS. THE REVENUE HAS GONE ON THE PRESUMPTION THAT THERE WAS AN IMPLIED CONTRACT BETWEEN THE ASSESSEE AND THE TRANSPORTER THE LEARNED CIT(A) CAME TO SUCH PRE SUMPTION BY LOOKING AT THE RECEIPTS, CUSTOMER ID GRADE, MODE OF PAYMENT ETC. F URTHER, THE LEARNED CIT(A) HAS RELIED ON THE RUNNING LEDGER ACCOUNTS IN THE BO OKS OF THE ASSESSEE WITH RESPECT TO THE TRANSPORTER. THE NATURE OF TRANSACTI ONS WITH RESPECT TO THE ASSESSEE'S CASE HAS NOT BEEN UNDERSTOOD IN ITS TRUE SENSE. THE ASSESSEE WAS DERIVING INCOME BY RETAINING COMMISSION FROM THE TO TAL AMOUNT RECEIVED FROM THE CUSTOMERS WHICH INCLUDES FREIGHT CHARGES COLLEC TED ON BEHALF OF THE TRANSPORTERS WHICH WERE DULY PAID TO THE TRANSPORTE RS. THERE ARE THREE PARTIES IN THE TRANSACTIONS NAMELY (I) THE TRANSPORT OWNER (II ) THE PARTY FROM WHOM THE GOODS ARE TO BE RECEIVED AND (III) THE PARTY TO WHO M THE GOODS ARE TO BE DELIVERED. THE CLAIM OF THE ASSESSEE WAS THAT HE WA S BRIDGING ALL THESE THREE PARTIES FOR TRANSPORTATION OF GOODS AND RECEIVED CO MMISSION FOR THE SAME. IN FACT, THE TRUCK OWNERS DETERMINE THE TRANSPORT COST TO BE COLLECTED FROM THE PERSONS WHO RECEIVED THE GOODS ON TRANSPORTATION. T HE ASSESSEE RAISES HIS OWN BILL BEING THE TRANSPORT COST PLUS HIS COMMISSION I N THE NAME OF THE PERSONS WHO RECEIVED THE GOODS. THE RECIPIENTS OF THE GOODS WIL L MAKE THE PAYMENT FOR THE ENTIRE BILL AMOUNT TO THE ASSESSEE BY WAY OF ACCOUN T PAYEE CHEQUE AFTER DEDUCTING TDS AND BY ISSUANCE OF TDS CERTIFICATE. ITA NO. 3342 /AHD/2016 . A.Y. 2012-1 3 3 IF THAT WAS IN FACT THEN, IT IS EVIDENT THAT THE AS SESSEE WAS ACTING, CAN BE CALLED AS COMMISSION AGENT AS PREVALENT IN THE BUSINESS PEASE , IT WOULD BE DEAR THAT THE SERVICE RENDERED BY THE ASSESSEE CANNOT BE TERMED A S CONTRACTOR BUT AT BEST HE CAN BE CALLED AS A FACILITATOR OR A MEDIATOR BETWEE N TRUCK OWNERS AND THE PERSONS WHO INTENDED TO TRANSPORT THEIR GOODS HAS ALSO CLAI MED THAT HE WAS NEITHER THE OWNER OF THE TRUCKS NOR CARRIED THE GOODS THROUGH H IS TRUCKS TO THEIR DESTINATION. THE ASSESSEE HAS ALSO STATED THAT HE HAD NOT INCURR ED ANY EXPENDITURE SUCH AS DRIVERS' SALARY, FUEL, LOADING & UNLOADING CHARGES. IF THESE FACTS ARE ALSO PROVED, IT WOULD CLEARLY ESTABLISH THAT THE ASSET CARRIED OUT ANY BUSINESS OF TRANSPORTATION BUT HAS ONLY RECEIVED COMMISSION FROM THOSE PARTIES WHO HAD CONDUCTED SUCH BUSINESS. THESE ASPECTS HAVE NOT BEEN THOROUGHLY EXAMINED BY THE REVENUE. THEREFORE, IN THE INTEREST OF JUSTICE, WE REMIT THE CASE BACK TO THE FILE OF THE LEARNED AO FOR PASSING APPROPRIATE ORDER KEEPING IN VIEW OUR AFORE SAID OBSERVATIONS...' 3. THE AO WHILE PASSING THE ORDER U/S. 143(3) RWS 254 OF THE ACT HAS HELD THAT THE ASSESSEE HAS NOT SUBMITTED ANY FURTHER DETAILS WHICH HE SUBMITTED AT THE TIME OF ORIGINAL ASSESSMENT. MOREOVER, THE ASSESSEE HAS RECEIVED ENTIRE AMOUNT FROM THE PARTY FOR WHOM HE HAS CARRIED OUT THE WORK . THE PARTY CONCERNED HAS ALSO DEDUCTED TDS U/S. 194C ON SUCH PAYMENTS. BOOKS OF ACCOUNTS ARE DULY AUDITED AND ASSESSEE HAS ACCOUNTED ENTIRE FREIGHT R ECEIPTS. IF THE ASSESSEE HAS RECEIVED ONLY THE COMMISSION INCOME, WHICH COMES TO RS. 4,41,2097-, THERE IS NO QUESTION OF AUDITING THE BOOKS OF ACCOUNT U/S. 4 4AB OF THE ACT. THE ASSESSEE HAS INCURRED EXPENDITURE TOWARDS FREIGHT C HARGES AND THE ASSESSEE HAS MADE PAYMENT OF FREIGHT OF RS. 1,47,92,209/-. HAD T HE ASSESSEE BEEN ONLY A COMMISSION AGENT, THEN THE ASSESSEE WOULD HAVE RECE IVED ONLY COMMISSION AMOUNT FROM THE PARTY CONCERNED. WHEN THE ASSESSEE HAS RECEIVED THE ENTIRE FREIGHT CHARGES. IT IS HIS DUTY OF DEDUCT TDS AT AP PLICABLE RATE AND ACCORDINGLY THE ASSESSEE WAS LIABLE FOR DEDUCTING TDS U/S. 194C OF THE ACT. ACCORDINGLY, THE A.O. HAS DISALLOWED AN AMOUNT OF RS. 1,47,92,20 9/- AS PER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. ITA NO. 3342 /AHD/2016 . A.Y. 2012-1 3 4 4. THEREAFTER, ASSESSEE PREFERRED FIRST STATUTORY APPE AL BEFORE THE LD. CIT(A). AND IN THE MEANWHILE, CO-ORDINATE BENCH HAS ALSO GIVEN SPECIFIC DIRECTION TO VERIFY WHETHER THE APPELLANT WAS THE OWNER OF THE TRUCKS OR CARRIED THE GOODS THROUGH HIS TRUCKS TO THE DESTINATION. 5. IN SUPPORT OF ITS CONTENTION, ASSESSEE CONTENDED TH AT HE IS NEITHER THE OWNER OF THE TRUCKS NOR CARRYING THE GOODS THROUGH HIS TRUCK S TO THE DESTINATION. THE P& L ACCOUNT HAS SHOWN INCOME FROM FREIGHT RECEIPT OF RS. 1,47,92,209/- AND THE DIRECT EXPENSES ON ACCOUNT OF FREIGHT PAID OF RS. 1 ,47,92,209/-. THEREFORE, THERE ARE NO EXPENSES DEBITED ON ACCOUNT OF ANY OF THESE ITEM IN P&L ACCOUNT. THEREAFTER, WITH DETAILED DISCUSSION, LD CIT(A) ALL OWED THE APPEAL OF THE ASSESSEE. 6. NOW REVENUE HAS COME BEFORE US. 7. WE HAVE GONE THROUGH THE IMPUGNED ORDER AND HEARD B OTH THE PARTIES AND GONE THROUGH THE RELEVANT RECORD. ASSESSEE IS A PRO PRIETOR OF NAVKAR FREIGHT CARRIERS WHICH IS ENGAGED IN THE ACTIVITY OF RUNNIN G TRANSPORTATION BUSINESS. ASSESSEE IS A COMMISSION AGENT TO ARRANGE TRUCKS IN ITS CUSTOMER FOR LIFTING OF GOODS. IN THIS KIND OF BUSINESS SUPPLIER OR THE PU RCHASER OF THE GOODS MAKE A CONTACT WITH THE BUSINESS MEN IN TRANSPORT CARRIERS . THEREAFTER TRANSPORT CARRIER LIFT GOODS AND DELIVER AT THE DESTINATION. IN THIS CASE, ASSESSEE JOB IS ONLY A MIDDLE-MAN WHO CHARGES HIS COMMISSION FOR MAKING AV AILABLE THE TRANSPORT VEHICLES. AND IN ORDER TO ARRANGE, ASSESSEE CHARGES 1% TO 3% COMMISSION FROM THE PERSON WHO HEIR TRUCKS/TRANSPORTATION THROUGH A SSESSEE AND AFTER DEDUCTING 1% TO 3% OF THE COMMISSION, ENTIRE AMOUNT IS GIVEN TO TRUCK DRIVERS OF THE ITA NO. 3342 /AHD/2016 . A.Y. 2012-1 3 5 SAID VEHICLE BECAUSE MAKING PRE PAYMENT TO THE DIVE R IS CONDITION IN SUCH BUSINESS. DURING THE PROCESS OF LOADING, TRANSPORT ATION AND UNLOADING OF GOODS FROM ONE PERSON TO ANOTHER, THE ENTIRE EXPENS ES IN RELATION TO VEHICLE MAINTENANCE, OPERATION AND RUNNING COST IS BORN BY THE VEHICLE OWNERS ONLY. THE MIDDLE-MAN IS NOT REQUIRED TO INCUR ANY SUCH EX PENSES ON TRANSPORT VEHICLE. 8. AS WE CAN SEE, ASSESSEE IS NOT OWNER OF THE TRUCK A ND NECESSARY EXPENDITURE SUCH AS DRIVERS SALARY, FUEL, LOADING AND UNLOADIN G CHARGES, MAINTENANCE OF VEHICLES, INSURANCE HAS NOT BEEN DEBITED TO THE PRO FIT AND LOSS ACCOUNT OF THE ASSESSEE. IN OUR CONSIDERED OPINION, LD. CIT(A) HAS PASSED REASONED ORDER AND SAME DOES NOT REQUIRE ANY KIND OF INTERFERENCE AT O UR END. 9. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN OPEN COURT ON 17 - 07- 2019 SD/- SD/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 17 /07/2019 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD