M/s. Parishram Transport, Navsari V. The Income tax Officer,Ward-3, Navsari

ITA 351/AHD/2009

• Counselvise Citation: 35120514 RSA 2009
• Duration Of Justice: 3 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 25-09-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 03-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T SANKAR
• Keywords: Opportunity of being heard
• Section: 143(3); 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE SHRI MUKUL KUMAR SHRAWAT, JM AND SHRI A. MO HAN ALANKAMONY, AM) ITA NO.351/AHD/2009 & 255/AHD/2010 A. Y.: 2008-09 M/S. PARISHRAM TRANSPORT, 6, INDRAPRASTHA APARTMENT, NR. NARANLAL HALL, ZAVERI SADAK, NAVSARI 396 445 P. A. NO. AAGFP 9935 K VS THE INCOME TAX OFFICER, NAVSARI, SWAPNALOK COMPLEX, NEAR KALIAWADI BRIDGE, NAVSARI (APPELLANT) (RESPONDENT) APPELLANT BY SHRI TUSHAR P. HEMANI, AR RESPONDENT BY SHRI T. SANKAR, SR. DR DATE OF HEARING: 25-09-2012 DATE OF PRONOUNCEMENT: 05-10-2012 O R D E R PER A. MOHAN ALANKAMONY: THESE TWO APPEALS ARE PREFERRED BY THE SAME ASSESSEE AGGRIEVED BY TWO DIF FERENT ORDERS OF THE LEARNED CIT, VALSAD IN APPEAL NO. CIT(A)/VLS/22 0/07-08 DATED 05-09-2008 AND NO.CIT(A)/VLS/297/08-09 DATED 05-09- 2009 PASSED U/S 250 READ WITH SECTION 143(3) OF THE ACT FOR T HE ASSESSMENT YEARS 2005-06 AND 2006-07 RESPECTIVELY. 2. THE ISSUES AND FACTS INVOLVED IN BOTH THE ASSESS MENT YEARS ARE IDENTICAL AND SIMILAR EXCEPT THE FIGURES. HENCE, FO R THE SAKE OF CONVENIENCE BOTH THE APPEALS ARE HEARD TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER. ITA NO.351/AHD/2009 (ASSESSEES APPEAL FOR AY: 2005-06) ITA NO.351/AHD/2009 & 255/AHD/2010 (AY: 2005-06 & 2 006-07) M/S. PARISHRAM TRANSPORT VS ITO, WARD-3, NAVSARI 2 3. THE ASSESSEE IN ITS APPEAL HAS RAISED AS MANY AS 7 GROUNDS WHEREIN GROUNDS NO.6 AND 7 ARE GENERAL IN NATURE AN D DO NOT SURVIVE FOR ADJUDICATION. THE SURVIVING GROUNDS NO. 1, 2, 3 , 4 AND 5 OF THE APPEALS ARE REPRODUCED HEREIN BELOW FOR REFERENCE: 1. ON FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS THE LAW ON THE SUBJECT, THE COMMISSIONER OF INCOME TAX (APPEALS), VALSAD, HAS ERRED IN CONFIRMING THE ORDE R OF THE ASSESSING OFFICER ASSESSING INCOME OF THE APPELLANT AT RS.1,09,03,430/- AS AGAINST THE RETURNED INCOME OF RS.3,08,610/- 2. ON FACTS AND CIRCUMSTANCES OF THE CASE AS WELL A S THE LAW ON THE SUBJECT, THE COMMISSIONER OF INCOME TAX (APPEALS), VALSAD, HAS ERRED IN CONFIRMING THE ADDI TION OF RS.1,05,83,555/- MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SEC. 40(A) (IA) OF THE I NCOME TAX ACT, 1961. 3. ON FACTS AND CIRCUMSTANCES OF THE CASE AS WELL A S THE LAW ON THE SUBJECT, THE COMMISSIONER OF INCOME TAX (APPEALS), VALSAD, HAS ERRED IN CONFIRMING THE ACTI ON OF THE ASSESSING OFFICER WHO MADE THE ADDITION BY INVO KING THE PROVISIONS OF SEC. 40(A) (IA) OF THE INCOME TAX ACT, 1961, WITHOUT APPRECIATION THAT THESE PROVISIONS AR E NOT APPLICABLE TO THE APPELLANT AS HE IS A TRANSPORT COMMISSION AGENT AND NOT A TRANSPORT CONTRACTOR. 4. ON FACTS AND CIRCUMSTANCES OF THE CASE AS WELL A S THE LAW ON THE SUBJECT, THE COMMISSIONER OF INCOME TAX (APPEALS), VALSAD, HAS ERRED IN CONFIRMING THE ACTI ON OF THE ASSESSING OFFICER WHO MADE THE ADDITION BY INVO KING THE PROVISIONS OF SEC. 40(A) (IA) OF THE INCOME TAX ACT, 1961, WITHOUT APPRECIATING THAT THE APPELLANT FIRM DID NOT HAVE ANY OF ITS OWN TRUCK BUT IT HAD ENGAGED THE TR UCKS OF THE THIRD PARTIES FOR ITS TRADE WHICH CAN BE THEREF ORE ITA NO.351/AHD/2009 & 255/AHD/2010 (AY: 2005-06 & 2 006-07) M/S. PARISHRAM TRANSPORT VS ITO, WARD-3, NAVSARI 3 CHARACTERIZED AS A TRANSPORT COMMISSION AGENT AND N OT A TRANSPORT CONTRACTOR. 5. FOR SEVERAL REASONS AND ON DIFFERENT GROUNDS THE ADDITION OF RS.1,05,83,555/-. 4. THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN TH E BUSINESS OF TRANSPORTATION OF LPG CYLINDERS OF M/S. HPCC, FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.3,08,610/- ON 3 1-12-2005. INITIALLY, THE RETURN WAS PROCESSED U/S 143(1) OF T HE ACT. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AN D ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 31-12-2007 B Y THE ASSESSING THE INCOME OF THE ASSESSEE AT RS.1,09,03,430/- AS A GAINST RETURNED INCOME OF THE ASSESSEE OF RS.3,08,610/- THEREBY MAK ING AN ADDITION OF RS.1,05,83,55/- U/S 40(A) (IA) OF THE ACT. 5. THOUGH THE ASSESSEE HAS RAISED FIVE ELABORATE GR OUNDS AS REPRODUCED ABOVE, THE CRUX OF THE ISSUE INVOLVED IS RELATING TO LEARNED CIT(A)S CONFIRMATION OF ADDITION OF RS.1,05,83,555 /- MADE BY THE LEARNED AO BY INVOKING PROVISIONS OF SECTION 40(A) (IA) OF THE ACT. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE F IRM HAD ENTERED INTO TRANSPORT CONTRACT WITH HIINDUSTAN PETROLEUM C ORPORATION LTD. (HPCL) FOR TRANSPORTATION OF PACKED LPG GAS CYLINDE RS FROM HPCL LPG PLANT AT PANOLI, ANKLESHWAR TO THE DESIGNATED D ESTINATIONS IN CONSIDERATION FOR RENT/CARTING CHARGES AS PER RATES PRESCRIBED IN THE SCHEDULE ATTACHED WITH THE LPG CYLINDER TRANSPORTAT ION CONTRACT AGREEMENT. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, ON EXAMINATION OF THE PROFIT & LOSS ACCOUNT OF THE ASS ESSEE, THE LEARNED AO OBSERVED THAT THE ASSESSEE HAS CLAIMED RS.1,05,8 3,555/- AS CARTING EXPENSES ON WHICH NO TAX WAS DEDUCTED AT SO URCE IN ITA NO.351/AHD/2009 & 255/AHD/2010 (AY: 2005-06 & 2 006-07) M/S. PARISHRAM TRANSPORT VS ITO, WARD-3, NAVSARI 4 COMPLIANCE WITH SEC. 194C OF THE ACT. THE LEARNED A O AFFORDED OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. BEFORE THE LEARNED AO, THE ASSESSEE CONTENDED THAT, THE ASSESSEE WAS NOT L IABLE FOR DEDUCTING TAX AT SOURCE U/S 194C OF THE ACT, SINCE THE ASSESSEE WAS CARRYING ON THE WORK OF TRANSPORTATION BY ITSELF BY ENGAGING HIRED TRUCKS FROM THIRD PARTIES THOUGH IT DID NOT OWN EVE N A SINGLE TRUCK. THE LEARNED AO DID NOT ACCEPT THE CONTENTION OF THE APP ELLANT AND MADE THE ADDITION OF RS.1,05,83,555/- BY INVOKING THE PR OVISIONS OF SEC. 40(A) (IA) OF THE ACT. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARN ED CIT(A), HOWEVER THE LEARNED CIT(A) CONFIRMED THE ORDER OF T HE LEARNED AO FOR THE ADDITION AMOUNTING TO RS.69,33,473/- WITH THE F OLLOWING OBSERVATIONS: 4.3 I HAVE CAREFULLY CONSIDERED BOTH RIVAL SUBMISS IONS AND OBSERVATION IN SUPPORT OF THEIR ARGUMENTS. THE ESSE NCE OF THE VARIOUS OBSERVATIONS MADE BY THE AO IN THE ASSESSME NT ORDER THAT THE APPELLANT HAD VIOLATED THE PROVISIONS OF S EC. 40(A) (IA) R. W. S. 194C ARE PRIMA- FACIE ACCEPTABLE AS THE APPEL LANT HAS NOT DEDUCTED TAX AT SOURCE ON THE AGGREGATE PAYMENTS OF RS.1,05,83,554/- MADE TO TRANSPORTS. I AM OF THE CO NSIDERED VIEW THAT AFTER THE ENACTMENT OF THE PROVISIONS OF SEC. 40(A) (IA), THE DECISION OF THE APEX COURT IN CASE OF HIN DUSTAN COCA COLA BEVERAGES PVT. LTD. VS CIT 293 ITR 226, AS REL IED UPON BY THE APPELLANT DOES NOT HAVE SIGNIFICANCE OR BARI NG IN THE CIRCUMSTANCE OF THE CASE OF THE APPELLANT AS THE AP PELLANT HAS APPARENTLY NOT DEDUCTED TAX AT SOURCE ON THE PAYMEN TS TO THE PAYEES WHO ARE TRANSPORT OPERATORS. I AM OF THE CON SIDERED OPINION THAT THE APPELLANT DID NOT PROVE TO THE SAT ISFACTION OF THE AO THAT IT IS A TRANSPORT COMMISSION AGENT. I AM TH EREFORE INCLINED TO AGREE WITH THE VIEW OF THE AO THAT THE APPELLANT FIRM HAS VIOLATED THE PROVISIONS OF SEC. 194C AND THAT D ISALLOWANCE ITA NO.351/AHD/2009 & 255/AHD/2010 (AY: 2005-06 & 2 006-07) M/S. PARISHRAM TRANSPORT VS ITO, WARD-3, NAVSARI 5 OF RS.1,05,83,554/- BY INVOKING THE PROVISIONS OF S EC. 40(A) (IA) ARE JUSTIFIED IN THE CASE OF THE APPELLANT. AS A RE SULT THE APPELLANTS GROUND NO.2 AND 3 ARE DISMISSED. 5. THE LEARNED AR SUBMITTED BEFORE US VARIOUS DECIS IONS LISTED HEREIN BELOW AND PRAYED THAT THE ADDITION MADE ON A CCOUNT OF SECTION 40(A) (IA) OF THE ACT MAY BE DELETED: (I) CHUHARMAL VS. CIT (1988) 172 ITR 250 (SC) (II) EKONKAR DASHMESH TRANSPORT COMPANY AND OTHERS VS CBDT AND OTHERS [1955] 219 ITR 511 (MAD) AND (III) ANANT MILLS CO. LTD. VS CIT (1995) 212 ITR 72 (IV) MERILYN SHIPPING AND TRANSPORT, 136 ITR 23 AN D (V) GUJARAT ROAD LINES V ITO ITA NO.3023/AHD/2008 ORDER DATED 30-03-2012 OF ITAT AHMEDABAD D BENCH. 6. THE LEARNED DR ON THE OTHER HAND, RELIED ON THE ORDER OF THE LEARNED CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIAL ON RECORD. FROM THE FACTS OF THE CASE IT I S APPARENT THAT THE ASSESSEE WAS HIRING TRUCKS FOR THE PURPOSE OF HIS B USINESS OF PROVIDING TRANSPORTATION SERVICES TO HIS CLIENT M/S . HPCL. SECTION 194 C OF THE ACT MAKES IT CLEAR THAT TDS IS DEDUCTIBLE ONLY IN THE CASE WHEN THE RECIPIENT CONTRACTORS RENDERS THE WORK OF CARRIAGE OF GOODS OR PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN R AILWAYS. IN THE CASE BEFORE US, IT IS EVIDENT THAT THE ASSESSEE HAD ONLY HIRED OUT THE VEHICLES AND RENDERED THE SERVICES OF TRANSPORTATIO N OF GOODS I.E. LPG CYLINDERS BY ITSELF AT ITS OWN RISK AND REWARD. AT THIS JUNCTURE WE MAY PEEP INTO THE DECISION OF THE HONBLE MADRAS H IGH COURT IN THE CASE OF CIT VS POOMPUHAR SHIPPING CORPORATION LTD. [2006] 282 ITR ITA NO.351/AHD/2009 & 255/AHD/2010 (AY: 2005-06 & 2 006-07) M/S. PARISHRAM TRANSPORT VS ITO, WARD-3, NAVSARI 6 3 (MAD). THE GIST OF THE AFORESAID DECISION IS REPR ODUCED HEREIN UNDER: UNDER SECTION 194C OF THE INCOME-TAX ACT, 1961, TH E TAX IS TO BE DEDUCTED WHEN A CONTACT IS ENTERED INTO FO R CARRYING OUT ANY WORK IN PURSUANCE OF A CONTRACT BETWEEN THE CON TRACTOR AND THE ENTITIES MENTIONED IN SUB-SECTION (1) OF SECTIO N 194C. THE TERM HIRE IS NOT DEFINED IN THE INCOME-TAX ACT. S O, WE HAVE TO TAKE THE NORMAL MEANING OF THE WORD HIRE. NORMAL HIRE IS A CONTRACT BY WHICH ONE GIVES TO ANOTHER TEMPORARY PO SSESSION AND USE OF PROPERTY OTHER THAN MONEY FOR PAYMENT OF COMPENSATION AND THE LATTER AGREES TO RETURN THE PR OPERTY AFTER THE EXPIRY OF THE AGREED PERIOD. THE EXPLANATION TO SECTION 194C WAS INTRODUCED WIT H EFFECT FROM JULY 1, 1995. THERE IS NO PRINCIPLE OF INTERPRETATION WHICH WOULD JUSTIFY READING THE EXPLANATION AS OPER ATING RETROSPECTIVELY, WHEN THE EXPLANATION COMES INTO FO RCE WITH EFFECT FROM A FUTURE DATE. THE ASSESSEE, A TAMIL NADU GOVERNMENT UNDERTAKING, WAS ENGAGED IN THE BUSINESS OF TRANSPORTATION OF CO AL FROM THE SPORTS OF HALDIA, VISAKHAPATNAM AND PARADEEP TO CHE NNAI AND TUTICORIN UNDER CONTRACTS EXECUTED WITH THE TAMIL N ADU ELECTRICITY BOARD. THE ASSESSEE OWNED THREE SHIPS. SINCE THREE SHIPS WERE NOT SUFFICIENT TO CARRY OUT THE CONTRACT S ENTERED INTO BY THE ASSESSEE WITH TAMIL NADU ELECTRICITY BOARD, THE ASSESSEE HIRED SHIPS BELONGING TO OTHER SHIPPING CO MPANIES AND PAID HIRE CHARGES TO THE OTHER SHIPPING COMPANI ES FOR USING THEIR SHIPS. THE ASSESSEE, HOWEVER, DID NOT DEDUCT TAX UNDER SECTION 194C OF THE INCOME-TAX ACT BEFORE MAKING PA YMENT OF HIRE CHARGES TO THE SHIPPING COMPANIES. THE ASSESSI NG OFFICER TREATED THE ASSESSEE AS IN DEFAULT AND DIRECTED THE ASSESSEE TO PAY THE TAX UNDER SECTION 201(1) OF THE INCOME-TAX ACT AND ALSO LEVIED INTEREST UNDER SECTION 201(1A). THE COM MISSIONER (APPEALS) AND THE TRIBUNAL HELD THAT SECTION 194C W AS NOT APPLICABLE. ON APPEAL TO THE HIGH COURT: HELD, DISMISSING THE APPEAL, THAT THE PAYMENT OF H IRE CHARGES FOR TAKING TEMPORARY POSSESSION OF THE SHIP S BY THE ITA NO.351/AHD/2009 & 255/AHD/2010 (AY: 2005-06 & 2 006-07) M/S. PARISHRAM TRANSPORT VS ITO, WARD-3, NAVSARI 7 ASSESSEE-COMPANY WOULD NOT FALL WITHIN THE PROVISIO N OF SECTION 194C AND HENCE NO TAX WAS REQUIRED TO BE DEDUCTED. THE HIRING OF SHIPS FOR THE PURPOSE OF USING THEM IN THE ASSESSEES BUSINESS DID NOT AMOUNT TO A CONTRACT FO R CARRYING OUT ANY WORK AS CONTEMPLATED IN SECTION 194C. 8. FROM THE ABOVE DECISION IT IS EVIDENT THAT THE PROVISIONS OF SECTION 194C OF THE ACT WILL NOT BE APPLICABLE WHEN VEHICLE S ARE HIRED OUT FOR CONDUCTING ONES BUSINESS OF TRANSPORTATION BY ITSEL F AND WHEN NO WORK OF TRANSPORTATION IS ASSIGNED TO THE OWNERS OF THE VEHICLES. THE OWNER OF THE VEHICLES ROLE EXTENDS ONLY TO THE LIM ITED FUNCTION OF PROVIDING THE VEHICLES ALONG WITH STAFF TO THE APPE LLANT FOR HIRE CHARGES. THE MOVEMENTS OF THE VEHICLES WITH THE GOO DS ARE AT THE COMMAND OF THE APPELLANT. THE APPELLANT ALSO UNDERT AKES THE RISK INVOLVED IN THE WORK OF TRANSPORTATION IT RENDERS W ITH THE HELP OF THE HIRED VEHICLES. ALL THESE FACTS CAN BE CLEARLY ESTA BLISHED IN THE PRESENT CASE BEFORE US FROM THE CONTRACT EXECUTED B ETWEEN THE APPELLANT AND M/S. HPCL CONTAINED IN PAGE NO.2 TO 2 7 OF THE PAPER BOOK. THIS CONTRACT IN PARA 9 ALSO SPECIFICALLY PRO VIDES THAT THE APPELLANT SHALL NOT SUB-LET ANY WORK ENTRUSTED TO H IM. FURTHER, RELEVANT INGREDIENTS IN THE CONTRACT TO ESTABLISH T HAT THE APPELLANT IS ASSIGNED THE JOB OF TRANSPORTATION AND IT HAD PERFO RMED THE JOB OF TRANSPORTATION BY ITSELF CAN BE SUMMARIZED AS UNDER :- ITEM NO.1 VEHICLE FOR TRANSPORTATION :- THE APPELLANT IS ASSIGNED WITH THE WORK OF TRANSPOR TATION BY M/S. HPCL AND IT HAS TO PROVIDE THE DETAILS OF THE VEHICLES PRESSED FOR THE OPERATION. THE APPELLANT HAS TO TRA NSPORT THE CYLINDERS ACCORDING TO THE SCHEDULE AND ROUTE STIPU LATED BY M/S. ITA NO.351/AHD/2009 & 255/AHD/2010 (AY: 2005-06 & 2 006-07) M/S. PARISHRAM TRANSPORT VS ITO, WARD-3, NAVSARI 8 HPCL. THE APPELLANT HAS TO ENSURE THAT THE TRUCKS PROVIDED FOR TRANSPORTATION OF LPG CYLINDERS SHALL COMPLY WITH A LL LEGAL FORMALITIES. THE APPELLANT SHALL ALSO ARRANGE FOR T HE APPLICABLE INSURANCE POLICIES. THE APPLICANT SHALL ALSO ENSURE THE DRIVERS OF THE VEHICLES HAVE PROPER AUTHORIZATION TO DRIVE THE TRUCKS WITH SUCH HAZARDOUS PRODUCTS AS PER THE MOTOR VEHICLES A CT. THE APPELLANT SHALL ALSO ENSURE THAT THE TRUCKS PRESSED FOR OPERATION ARE ROAD-WORTHY COMPLYING WITH ALL SPECIFICATIONS F OR PERFORMING SUCH HAZARDOUS WORK. ITEM NO.2 DELIVERY CARRIAGE OF GOODS: THE APPELLANT SHALL MAKE ARRANGEMENT FOR DELIVERY O F THE CYLINDERS WITHIN THE STIPULATED TIME AND SHALL DELI VER THE CYLINDERS ACCORDING TO THE INSTRUCTIONS OF M/S. HPC L. ALL THE SPECIFICATIONS DIRECTED BY M/S. HPCL SHALL BE FOLLO WED BY THE APPELLANT. ITEM NO.3 OPERATION OF TRUCKS: THE APPELLANT SHALL OBTAIN THE REQUISITE ROAD PERMI TS AND OTHER PERMITS APPLICABLE FOR TRANSPORTATION OF GOODS. THE APPELLANT SHALL BEAR THE ENTIRE OPERATIONAL COST OF THE TRUCK S ETC. ITEM NO. 4 LOSS/DAMAGES OF CYLINDERS THE APPELLANT SHALL BE SOLELY RESPONSIBLE FOR THE S AFE CUSTODY OF THE CYLINDERS. ITA NO.351/AHD/2009 & 255/AHD/2010 (AY: 2005-06 & 2 006-07) M/S. PARISHRAM TRANSPORT VS ITO, WARD-3, NAVSARI 9 ITEM NO.5: UTILIZATION OF TRUCKS THE APPELLANT SHALL OPERATE ALL THE TRUCKS FOR ALL THE STATIONS AWARDED TO IT AND IT SHALL INFORM M/S. HPCL IF ANY TRUCK IS WITHDRAWN. ITEM NO.6: LOADING/UNLOADING/HANDLING OF CYLINDERS LOADING/UNLOADING OF THE CYLINDERS SHALL BE PERFORM ED BY THE APPELLANT. ITEM NO.7: TRANSSHIPMENT THE APPELLANT SHALL UNDERTAKE THE MOVEMENT OF THE P RODUCE ENTRUSTED TO HIM BY M/S. HPCL WITHOUT TRANSSHIPPING . HOWEVER, IS THE TRANSSHIPMENT IS INEVITABLE, THE TRANSPORTER SHALL ADVISE M/S. HPCL BEFOREHAND AND ALSO ENSURE THAT ADEQUATE CARE AND PRECAUTION IS TAKEN TO ENSURE THE SAFE HANDLING OF THE PRODUCT. NO ADDITIONAL CHARGE WILL BE PAID BY M/S. HPCL FOR TRANSSHIPMENT. ITEM NO.8: SECURITY DEPOSIT/BANK GUARANTEE THE APPELLANT IS TO PROVIDE TO M/S. HPCL BANK GUARA NTEE FOR A SPECIFIC AMOUNT FOR A SPECIFIC PERIOD IN ORDER TO C OVER LOSSES, DAMAGES, EXPENSES ETC. ARISING OUT OF THE APPELLANT S NEGLIGENCE TO OBSERVE ANY TERMS AND CONDITIONS IN T HE CONTRACT. ITEM NO.9: SUBLETTING THE APPELLANT SHALL NOT SUBLET ANY WORK ENTRUSTED T O HIM EXCEPT WITH THE WRITTEN CONSENT OF M/S. HPCL. ITA NO.351/AHD/2009 & 255/AHD/2010 (AY: 2005-06 & 2 006-07) M/S. PARISHRAM TRANSPORT VS ITO, WARD-3, NAVSARI 10 8. THUS, FOLLOWING THE DECISION OF THE HONBLE MADR AS HIGH COURT REFERRED SUPRA AND BASED ON OUR ABOVE DISCUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT IN THE PRESENT CASE BEFORE US, IT IS CLEARLY ESTABLISHED THAT THE APPELLANT HAD PERFORMED THE WO RK OF TRANSPORTATION BY ITSELF BY HIRING OF VEHICLES AND WITHOUT SUBLETTING THE WORK AND THEREFORE, THE PROVISIONS OF SECTION 194C OF THE ACT IS NOT APPLICABLE AND ACCORDINGLY PROVISIONS OF SECTION 40 (A) (IA) OF THE ACT CANNOT BE INVOKED. THE REVENUE HAS NOT BROUGHT OUT ANY MATERIAL TO ESTABLISH THAT THE OWNER OF THE VEHICLES HAVE PERFO RMED ANY WORK OTHER THAN HIRING THEIR VEHICLES TO THE APPELLANT. FOR THE ABOVE SAID REASONS WE ALLOW THE APPEAL OF THE ASSESSEE IN ITS FAVOUR AND DELETE THE ADDITION OF RS. 1,05,83,555/- MADE BY THE LEARNED AO WHICH WAS FURTHER CONFIRMED BY THE LEARNED CIT(A). 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ITA NO.255/AHD/2010 (ASSESSEES APPEAL FOR AY: 2006-07) 9. THIS APPEAL HAS ARISEN DUE TO RECALLING OF THE O RDER OF THE TRIBUNAL DATED 26-12-2011 IN ITA NO.255/AHD/2010 BY ALLOWING THE MISC. APPLICATION NO.63/AHD/2012 VIDE ORDER DATED 0 1-06-2012. ON THE EARLIER OCCASION THE TRIBUNAL HAD DISMISSED THE APPEAL FOR WANT OF PROSECUTION VIDE ORDER DATED 26/12/2011. 10. THE ASSESSEE HAS IN THIS APPEAL HAS TAKEN SEVEN ELABORATE GROUNDS, WHEREIN GROUNDS NO. 6 AND 7 ARE GENERAL IN NATURE AND DOES NOT SURVIVE FOR ADJUDICATION. THE CRUX OF THE ISSUE INVOLVED IN ITA NO.351/AHD/2009 & 255/AHD/2010 (AY: 2005-06 & 2 006-07) M/S. PARISHRAM TRANSPORT VS ITO, WARD-3, NAVSARI 11 THE SURVIVING GROUNDS NO.1, 2, 3, 4 AND 5 RELATES TO THE LEARNED CIT(A)S CONFIRMATION OF ADDITION OF RS.1,50,77,60 4/- MADE BY THE LEARNED AO U/S 40 (A) (IA) OF THE ACT. 11. AT THE TIME OF HEARING BEFORE US, BOTH THE PART IES SUBMITTED THAT THE ISSUE INVOLVED IN BOTH THE APPEALS OF THE ASSES SEE FOR AY 2005- 06 AND AY 2006-07 ARE IDENTICAL AND SIMILAR AND THE REFORE IT WAS PRAYED THAT THE DECISION OF THE TRIBUNAL TAKEN IN T HE CASE OF THE ASSESSEE FOR AY 2005-06 MAY BE FOLLOWING WHILE DECI DING THE APPEAL OF THE ASSESSEE FOR AY 2006-07. 12. ON PERUSAL OF THE ORDERS OF THE REVENUE AND THE MATERIALS PRODUCED BEFORE US, IT IS APPARENT THAT THE SUBMISS IONS OF BOTH THE PARTIES ARE ACCEPTABLE. ACCORDINGLY, BY FOLLOWING O UR DECISION IN THE CASE OF THE ASSESSEE FOR AY 2005-06 SUPRA, WE ALLOW THE APPEAL OF THE ASSESSEE FOR AY 2006-07 AND DELETE THE ADDITION OF RS.1,50,77,604/- MADE BY THE LEARNED AO U/S 40 (A) (IA) OF THE ACT WHICH WAS FURTHER CONFIRMED BY THE LEARNED CIT(A). 13. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05-10-2012 SD/- SD/- (MUKUL KUMAR SHRAWAT) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - ITA NO.351/AHD/2009 & 255/AHD/2010 (AY: 2005-06 & 2 006-07) M/S. PARISHRAM TRANSPORT VS ITO, WARD-3, NAVSARI 12 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 26-09-2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 27-09-2012 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: