The ITO, Ward-3(1), JAMNAGAR V. M/s. Krishna Stone Crusher,

ITA 361/RJT/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2416 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-01-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 03-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Assessee Lawyers: DM RINDANI
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: S H RI S. S. GODARA, JUDICIAL MEMBER , AND SHR I MANISH BORAD, ACCOUNTANT MEMBER [COND UCTED THROUGH E - COURT AT AHMEDABAD] INCOME TAX OFFICER , WARD - 3(1), JAMNAGAR (APPELLANT) VS M/S. KRISHNA STONE CRUSHER, AT: SETHVADALA, TAL: JAM - JODHPUR, JAMNAGAR PAN: AAEFK345 3B (RESPONDENT) REVENUE BY : S H RI C.S. ANJARIA, D . R. ASSESSEE BY: S H RI D.M. RINDANI , A.R. DATE OF HEARING : 06 - 01 - 2 016 DATE OF PRONOUNCEMENT : 07 - 01 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 200 6 - 07 , AR ISES FROM ORDER OF THE CIT(A), JAMNAGAR DATED 24 - 07 - 2013 IN APPEAL NO. CIT(A)/JAM/132/ 11 - 12/258 , IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 361 / RJT/ 20 13 A SSESSMENT YEAR 200 6 - 07 I.T.A NO. 361/RJT/2013 A.Y. 2006 - 07 PAGE NO ITO VS. M/S. KRISHNA STONE CRUSHER 2 2. THE REVENUE S SOLE SUBSTANTIVE GROUND CHALLENGES THE LOWER AP PELLATE ORDER DELETING SECTION 40(A)(IA) DISALLOWANCE OF RS. 7,94,915/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF THE FACT THAT THE ASSESSEE HAD TREATED IT S TRACTOR PAYMENT AS RENT U/S. 194I INSTEAD OF SECTION 194C AS PAYMENTS MADE TO CONTRACTORS. FACTS OF THE CASE ARE IN A VERY NARROW COMPASS. THE ASSESSING OFFICER APPEARS TO HAVE REOPENED A REGULAR ASSESSMENT FRAMED ON 26 - 07 - 2011 AFTER VERIFYING FROM TH E LEDGER ACCOUNT THAT THE ASSESSEE HAD PAID THE IMPUGNED TRACTOR RENTS U/S. 194I AND NOT U/S. 194C. THIS M ADE HIM TO INVOKE SECTION 40(A) (IA) RESULTING IN THE IMPUGNED DISALLOWANCE. THE CIT(A) DELETES THE SAME IN LOWER APPELLATE FINDINGS UNDER CHALLENGE BY AGREEING WITH ASSESSEE S ACTION TREATING THE ABOVE STATED PAYMENTS TO BE RENT PAYMENTS. THIS LEAVES THE REVENUE AGGRIEVED . 3. WE HAVE HEARD BOTH THE PARTIES. CASE FILE PERUSED. THERE IS NO DISPUTE ON FACTS THAT THE ASSESSEE HAD COMPLIED WITH SECTI ON 194I OF THE ACT. THE REVENUE S CASE IS THAT IT OUGHT TO HAVE DEDUCTED TDS U/S. 194C. THE ASSESSEE APPEARS TO HAVE MADE THE IMPUGNED PAYMENTS BY TREATING THE SAME AS TRACTOR RENTS BELOW THE TDS LIABILITY LIMIT U/S. 194I. THE REVENUE HAS NOT BEEN ABLE TO REBUT THE CRUCIAL LOWER APPELLATE FINDINGS THAT THE ASSESSEE HAS TAKEN TRACTOR MACHINERY IN QUESTION ON RENT. WE FURTHER OBSERVE THAT EVEN THOUGH THE ASSESSEE S COMPLIANCE WITH SECTION 194I LEADS US TO CONCLUDE THAT THE PRESENT IS AN INSTANCE OF SHORTF ALL IN TDS DEDUCTION ONLY AND NOT A CASE OF COMPLETE NON - DEDUCTION THEREOF. HON BLE CALCUT TA HIGH COURT IN CASE OF DCIT VS. S.K. TEKRIWAL (2014) 361 ITR 412 (CAL) I.T.A NO. 361/RJT/2013 A.Y. 2006 - 07 PAGE NO ITO VS. M/S. KRISHNA STONE CRUSHER 3 HOLDS THAT SUCH A SHORTFALL DOES NOT LEAVE TO APPLICATION OF SECTION 40(A)(IA) DISALLOWANCE. THE REVENUE IS UNABLE TO POINT OUT ANY DISTINCTION ON FACTS OR LAW. WE HOLD ACCORDINGLY THAT ITS SOLE SUBSTANTIVE DESERVES T O BE REJECTED ON BOTH THESE COU NTS. WE AFFIRM THE LOWER APPELLATE OR D ER IN THESE FACTS AND CIRCUMSTANCES. 4. THIS REVENUE S A PPEAL IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 0 7 - 01 - 201 6 SD/ - SD/ - ( MANISH BORAD ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 07 /01/2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER , ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL , RAJKOT