Rourkela Transport Service, Rourkela V. ITO, Rourkela

ITA 36/CTK/2011

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0815 (ITAT-CUTTACK)
• Duration Of Justice: 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 17-01-2011
• Court: TRIBUNAL
• Department Lawyers: A K MOHAPATRADR
• Assessee Lawyers: D K SETH
• Keywords: Retrospective amendment
• Section: 194C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK () BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T.A.NO. 36/CTK/2011 / ASSESSMENT YEAR 2005 - 06 ROURKELA TRANSPORT SERVICE, C/O. SARDAR GURMIT SINGH, POWER HOUSE ROAD,ROURKELA 769 001 PAN: AAGFR 9423 G) - - - VERSUS - INCOME - TAX O FFICER, WARD 3, ROURKELA. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI D.K.SETH, AR / FOR THE RESPONDENT: / SHRI A.K.MOHAPATRA,DR / ORDER . . , , SHRI K.K.GUPTA, ACCOUNTANT MEMBER . THE ASSESSEE IS IN APPEAL RAISING A SOLITARY GROUND AGITATING THE ACTION OF THE LEARNED CIT(A) IN CONFIRMING THE ADDITION OF 35 ,75,695 BY WAY OF DISALLOWANCE U/S.40(A)(IA) OF THE INCOME - TAX ACT,1961. 2. THE BRIEF FACTS AS BROUGHT ON RECORD ARE THAT THE ASSESSEE WAS SUBJECTED TO PROCEEDINGS U/S.143(3)/147 BEING A TRANSPORT CONTRACTOR. HE DERIVES INCOME FROM TRANSPORT BUSINESS AND FILED THE RETURN OF INCOME AMOUNTING TO 1,70,871. DURING THE COURSE OF PROCEEDINGS, THE LEARNED ASSESSING OFFICER DISALLOWED THE CLAIM OF TRANSPORT CHARGES HOLDING THAT ONLY A PART OF THE TRANSPORT CHARGE WAS SUBJECTED TO TAX DEDUCTION AT SOURCE AND THE REMAINING ON WHICH THE TAX WAS DEDUCTED WAS PAID ON 31ST MAY,2005 I.E., BEYOND THE FY RELEVANT T O THE ASSESSMENT YEAR 2005 - 06. AGGRIEVED, THE ASSESSEE APPEALED BEFORE THE FIR ST APPELLATE AUTHORITY WHO TRIED TO CONSIDER THE ASSESSEE - APPELLANT S SUBMISSIONS BEFORE HIM BY ANALYZING THE PROVISION / I.T.A.NO. 36/CTK/2011 2 OF THE I.T.ACT WHEREIN PAID AND PAYABLE WERE TO BE CON SIDERED AS THE INTERPRETATION OF THAT SECTION. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEARNED CIT(A) DEVIATED FROM THE ISSUE ON HAND BY NOT CONSIDERING THE FACTS AS NOTED BY THE ASSESSING OFFICER WHO HAD VERIFIED THE BOOKS OF ACCOUNT AL ONGWITH THE FINE TUNING OF TAX DEDUCTION AT SOURCE U/S.194C. HE POINTED OUT THAT THE ASSESSING OFFICER HAD VERY CATEGORICALLY NOTED THAT THE PAYMENTS TO THE TUNE OF 17 28,393 ON WHICH TDS HAD BEEN DEPOSITED IN MARCH,2005 ITSELF WOULD BE EXCLUDED FROM THE TOTAL TRANSPORTATION CHARGES CLAIMED AMOUNTING TO 53,04,088 . S USTAINING THE DISALLOWANCE ONLY OF 35,75,695 WAS THEREFORE IN ACCORDANCE WITH THE PROVISIONS OF THE I .T.ACT AS IT WAS NOT TO BE HELD OTHERWISE CONSIDERED BY THE LEARNED CIT(A) THAT SECTION 194C WAS APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. THE TAX DEDUCTION AT SOURCE MADE IN THE MONTH OF MARCH WAS PAID ON 31ST MAY,2005 I.E., MUCH PRIOR TO THE DUE DA TE OF FILING OF THE RETURN IN OCTOBER, 2005 WAS WITHIN THE PARAMETER AS INSCRIBED IN SECTION 139(1). THE ASSESSE THEREFORE, CANNOT BE CONSIDERED AS DEFAULTER IN THE AMENDED PROVISIONS OF SECTION 40(A)(IA) AS AMENDMENT WERE MADE IN 2008 AND 2010 WITH RETROS PECTIVE EFFECT FROM 1.4.2 005 I.E., ASSESSMENT YEAR 2005 - 06. HE POINTED OUT THAT THIS ISSUE IS EXACTLY SIMILAR AS WAS CONSIDERED BY THE ITAT, HYDERABAD BENCH IN THE CASE OF K.SRINIVAS NAIDU V. ACIT [131 TTJ (HYD) (UO) 17], IN THE CASE OF SUBASH KUMAR JINDAL V. ITO IN ITA NO.100/CTK/2010, PRAMILA MINING & ALLOYS PVT. LTD., V. ACIT IN ITA NO.211/CTK/2010, COPY OF WHICH ARE BEING PLACED ON RECORD. 4. THE LEARNED DR SUPPORTED THE ORDER OF THE AUTHORITIES BELOW FOR HIS PART SUBMISSION INDICATING THAT THE TRANSPO RTATION CHARGES HAVE BEEN BROUGHT INTO THE STATUTE FOR TAXATION BY INCORPORATING THE WORKS CONTRACT HAVING CLAIMED FOR THE TRANSPORTATION SEPARATELY BY A CONTRACT THEREFORE WAS / I.T.A.NO. 36/CTK/2011 3 CONSIDERED BY THE ASSESSING OFFICER AND THE LEARNED CIT(A) WITHIN THE INTERPR ETATION OF THE SAID SECTION. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. A CONTRACT TO FERRY GOODS HAD BEEN ENTERED INTO BY THE ASSESSEE WHICH REQUIRE D TAX DEDUCTION AT SOURCE WHEN HE OBTAIN ED TRUCKS ON HIRE FOR ITS CONTRACT TO BE RENDERED IN ITS ENTIRETY. EXPENSES HAVE BEEN CLAIMED FOR PAYMENT TO THESE TRANSPORTERS THEREFORE CLEARLY INDICATES THAT IT IS NOT THE HIRER WHO HAD ENTERED INTO THE CONTRACT FOR TRANSPORT GOODS OF THE CONTRACTEE WHICH THE AUTHORITIES BELOW HAVE MISCONSTRUED . WE FIND FORCE IN THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE ITAT, CUTTACK BENCH WHEREIN THE DISALLOWANCE U/S.40(A)(IA) ON NON - DEDUCTION OF TAX AT SOURCE WAS PAID BEFO RE THE DUE DATE OF FILING OF RETURN U/S.139(1). WE ARE INCLINED TO HOLD THAT THE AUTHORITIES BELOW MISDIRECTED TO INTERPRETE THE AMENDED PROVISIONS INSERTED WITH RETROSPECTIVE EFFECT FROM 1.4.2005 WITH TWO INSERTIONS ONE IN 2008 AND THE OTHER IN 2010 , FOR FINAL SETTLEMENT OF THE ISSUE ON THE HAND THAT THE DEDUCTION OF TAX AT SOURCE COULD BE DEPOSITED PRIOR TO THE DUE DATE OF FILING OF THE RETURN ENTITLE D THE ASSESSEE TO CLAIM THE EXPENSES IN THE IMPUGNED ASSESSMENT YEAR AND NOT TO BE DISALLOWED U/S.40(A)(I A). THE ASSESSING OFFICER, THEREFORE, CLEARLY NOTED THAT ONLY PART OF THE TDS AMOUNT WAS DEPOSITED IN THE FY ITSELF FOR DISALLOWING THE REMAINING PART OF THE CLAIM WAS TO BE CONSIDERED ON THE BASIS OF SUCH TAX DEPOSITED ON 31ST MAY,2005 ON THE ENTIRE AMOUN T DID NOT REQUIRE FURTHER INTERPRETATION OF LAW. THE ASSESSING OFFICER AND THE LEARNED CIT(A) WERE RESTRICTING THEIR OBSERVATIONS ON THE FIRST AMENDMENT AND SECOND AMENDMENT SEPARATELY WITH RETROSPECTIVE EFFECT FROM 1.4.2005 THEREFORE CLINCHES THE ISSUE IN FAVOUR OF THE ASSESSEE IN ACCORDANCE WITH THE CITED DECISIONS AS WELL. WE DIRE CT THE ASSESSING OFFICER / I.T.A.NO. 36/CTK/2011 4 TO ALLOW THE CLAIM OF THE ASSESSEE BY DELETING THE DISALLOWANCE MADE U/S.40(A)(IA) AMOUNTING TO 35,75,695. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 25.01.2011 SD/ - SD/ - ( . . . ), ( K.S.S.PRASAD RAO), JUDICIAL MEMBER (. . ), , (K.K.GUPTA), ACCOUNTANT MEMBER. () DATE: 25.01.2011 - COPY OF T HE ORDER FORWARDED TO: 1. / THE APPELLANT : ROURKELA TRANSPORT SERVICE, C/O. SARDAR GURMIT SINGH, POWER HOUSE ROAD,ROURKELA 769 001 2 / THE RESPONDENT: INCOME - TAX OFFICER, WARD 3, ROURKELA. 3. / THE CIT, 4. ( )/ THE CIT(A), 5. / DR, CUTTACK BENCH 6. GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY ( ), ( H.K.PADHEE ), SENIOR.PRIVATE SECRETARY.