The ACIT, TDS Circle, RAJKOT-GUJARAT V. M/s. Ashapura Minechem Ltd., Jam-Khambhalia

ITA 381/RJT/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 85426 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 08-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: DM RINDANI
• Section: 194C; 201(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBULAL, RAJKOT BENCH: RAJKOT ,!'# , #% BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER 1. ./ I.T.A. NO.381/RJT/2012 A.Y. 2008-09 2. ./ I.T.A. NO.382/RJT/2012 A.Y. 2009-10 THE ASST. CIT TDS CIRCLE RAJKOT / VS. M/S.ASHAPURA MINECHEM LTD. JAMNAGAR DWARKA HIGHWAY OPP.ASHOK PETROL PUMP MHAMKHAMBHALIYA-361305 #)!' ./ ./ PAN/GIR NO. : RKTA 00904 B ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+.! / APPELLANT BY : SHRI AVINASH KUMAR, SR.DR ,-)+/.! / RESPONDENT BY : SHRI D.M. RINDANI, C.A. 0/' / DATE OF HEARING 05/12/2014 12 /' / DATE OF PRONOUNCEMENT 18/12/2014 !/ O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGA INST THE SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS )-II, RAJKOT AND LD.COMMISSIONER OF WEALTH TAX (APPEALS)-II, RAJKOT (CIT(A)/CWT(A) IN SHORT) BOTH IDENTICALLY DATE D 02/03/2012 PERTAINING TO ASSESSMENT YEAR (AYS) 2008-09 & 2009- 10. SINCE THE FACTS AND GROUNDS ARE IDENTICAL, BOTH THE APPEALS W ERE HEARD TOGETHER AND ITA NOS.381& 382/RJT /2012 ACIT (TDS) RAJKOT VS. M/S.ASHAPURA MINECHEM LTD. ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 2 - ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FO R THE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE APPEAL IN ITA NO.381/RJT/2 012 FOR AY 2008- 09 AS A LEAD CASE. THE REVENUE HAS RAISED THE FOLL OWING COMMON GROUNDS OF APPEAL, EXCEPT QUANTUM IN APPEALS (EXTRA CTED FROM ITA NO.381/RJT/2012): 1. THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS ON FA CTS OF THE CASE IN DELETING THE ORDER PASSED U/S.201(1) OF THE I.T.ACT OF RS.89,47,347/- (RS.12,50,909/- FOR AY 2009-10) AND INTEREST CHARGE UNDER SECTION 201(1A) OF THE I.T.ACT OF RS.36,23,676/- FOR A.Y. 2 008-09 (RS.3,56,480/- FOR AY 2009-10) BY TREATING THE USE OF BARGE HIRING CHARGES U/S.194C OF THE I.T.ACT AS AGAINST U/S.194I OF THE IT ACT BY TH E A.O. 2. THE LD.CIT(A) ERRED IN NOT CONSIDERING THE FAC T THAT AFTER 13.7.2006 THE PROVISION OF 194I IS APPLICABLE ON HIRING CHARG ES OF BARGE FOR WHICH COVER USE OF PLANT AND MACHINERY AND NOT THE PROVIS ION OF 194C OF I.T.ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. 5. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.CIT(A) MAY BE CANCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EFFECT. 2. THE FACTS AS RECORDED BY THE LD.CIT(A) VIDE PAR A-5 IN THE APPELLATE ORDER, ARE REPRODUCED HEREUNDER (EXTRACTE D FROM ITA 381/RJT/2012):- 5. THE FACTS OF THE CASE ARE THAT THE APPELLANT IS A LISTED PUBLIC LIMITED COMPANY ENGAGED IN MINING AND EXPORTS OF BAUXITE AN D MINERALS. IN THE CASE OF THE APPELLANT, A SURVEY ACTION UNDER SECTION 133 A(1) WAS CARRIED ON ITA NOS.381& 382/RJT /2012 ACIT (TDS) RAJKOT VS. M/S.ASHAPURA MINECHEM LTD. ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 3 - 17.03.2009 AND 24.03.2009 FOR TDS VERIFICATION. DUR ING THE COURSE OF THE SAID VERIFICATION, THE A.O. HAS CONTENDED THAT IN THE CA SE OF PAYMENTS EFFECTED BY THE APPELLANT TO THE FOLLOWING THREE PARTIES, THE T DS WAS MADE BY THE APPELLANT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 194C W HEREAS ACCORDING TO HIM, THE SAID TDS SHOULD HAVE BEEN MADE IN ACCORDANCE WI TH THE PROVISIONS OF SECTION 194J IN THE CASE OF THE FIRST PARTY AND UND ER SECTION 194I IN THE CASE OF THE OTHER TWO PARTIES. THE DETAILS OF THE SAID THR EE PARTIES AND THE SAID SHORT DEDUCTION WORKED OUT BY THE A.O. ARE AS UNDER: SR. NO. NAME OF THE PARTY (PAYEE) TOTAL CONTRACT AMT TDS MADE U/S 194C TDS TO BE MADE U/S 194J AND 194I TOTAL AMOUNT OF SHORT DEDUCTION 1 M/S. ARVIND & CO. 533698/- 12345/- 60467/- 48032/- 2 M/S. SHREEJI SHIPPING 15669000/- 355059/- 1775298/- 1420239/- 3 M/S. INDIAN ROADLINES 74008909/- 1694058/- 9143134/- 7479076/- TOTAL 90211607/ - 2061552/ - 10978899/ - 8947347/ - 2.1. AGAINST THE ORDER OF THE AO, THE ASSESSEE FILE D AN APPEAL BEFORE THE LD.CIT(A)/CWT(A), WHO AFTER CONSIDERING THE SUBMISS IONS PARTLY ALLOWED THE APPEAL(S). NOW, THE REVENUE IS IN APPE AL BEFORE US. 3. GROUND NOS.1& 2 ARE DECIDED TOGETHER. THE LD.S R.DR SUBMITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN HOLDING THA T IN THE CASE OF M/S.SHREEJI SHIPPING THE TAX WAS CORRECTLY DEDUCTED U/S.194-C OF THE ACT. HE SUBMITTED THAT THE AO HAS GIVEN A FINDING THAT THE ASSESSEE HAS HIRED THE BARGES FOR TRANSPORTING THE BAUXITE CAR GO FROM SHORE TO SHIP. THEREFORE THE TAX OUGHT TO HAVE BEEN DEDUCTED U/S.1 94-I OF THE ACT. HE FURTHER SUBMITTED THAT THE LD.CIT(A) WAS ALSO NOT C ORRECT IN RESPECT OF THE CASE OF M/S. INDIAN ROADLINES THAT THE TAX WAS CORR ECTLY DEDUCTED U/S.194-C OF THE ACT. HE FURTHER SUBMITTED THAT TH E LD.CIT(A) WAS NOT ITA NOS.381& 382/RJT /2012 ACIT (TDS) RAJKOT VS. M/S.ASHAPURA MINECHEM LTD. ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 4 - JUSTIFIED IN HOLDING THAT THE INTEREST WOULD BE CHA RGEABLE ONLY UPTO THE DATE OF FILING OF RETURN IN THE CASE OF M/S.ARVIND & CO. WAS ON 31/07/2008. HE ALSO SUBMITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN ALLOWING THE ALTERNATE SUBMISSION OF THE ASSESSEE F OR HOLDING THAT NO DIFFERENTIAL TAX CAN BE RECOVERED FROM THE ASSESSEE SINCE THE DEDUCTEES HAVE ALREADY FILED THEIR INCOME TAX RETURNS AND PAI D THE DUE TAXES. 4. ON THE CONTRARY, THE LD.COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE IN THE SYNOPSIS. HE RELIED ON THE ORDER OF THE LD.CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE UNDISPUTED FACT REMAINS THAT THE ISSUE INVOLVED IN THIS APPEAL IS WITH REGARD TO DEDUCTION OF TAX U/S.194-C OF THE ACT OR 194-I OF THE ACT. WE FIND THAT THE LD.CIT(A) AFTER CONSIDERING THE SUBMI SSIONS OF THE ASSESSEE HAS GIVEN A FINDING ON FACT WHICH READS AS UNDER:- THE ESSENCE OF THE WORK BEING CARRIED OUT BY M/S. SHREEJI SHIPPING IS THAT OF TRANSPORTATION OF BAUXITE AND S INCE NOTHING HAS BEEN BROUGHT ON RECORD TO ESTABLISH OR INDICATE THA T THE CONTROL, POSSESSION, OPERATION, MAINTENANCE ETC. OF THE SAID BARGE WAS WITH THE APPELLANT AND CONSIDERING THAT THE ESSENCE OF T HE CONTRACT WAS OF CARRIAGE OF GOODS WHICH IS EVIDENT FROM THE FACT THAT THE PAYMENTS WERE EFFECTED ON PER TON BASIS, I AM OF TH E OPINION THAT THE SAME CLEARLY FALLS WITHIN DEFINITION OF EXPLANA TION III (C) TO SECTION 194C & THE APPELLANT HAS CORRECTLY DEDUCTED TDS UNDER SECTION 194C. ITA NOS.381& 382/RJT /2012 ACIT (TDS) RAJKOT VS. M/S.ASHAPURA MINECHEM LTD. ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 5 - 5.1. THE ABOVE FINDING OF THE LD.CIT(A) IS NOT CONT ROVERTED BY THE REVENUE BY PLACING ANY MATERIAL ON RECORD. THE LD.C IT(A) HAS GIVEN A FINDING THAT THE BARGES WERE NOT HIRED. HOWEVER, T HE WORK WAS CARRIED OUT BY M/S.SHREEJI SHIPPING IS ONLY TRANSPORTATION OF THE GOODS FROM SEA- SHORE TO SHIP. THEREFORE, WE DO NOT FIND ANY REASO N TO INTERFERE WITH THE ORDER OF THE LD.CIT(A), SAME IS HEREBY UPHELD. THUS, THESE GROUNDS OF REVENUES APPEAL ARE REJECTED. 5.2. GROUND NOS.3,4 & 5 ARE GENERAL IN NATURE REQUI RE NO INDEPENDENT ADJUDICATION. 5.3. REGARDING THE ADDITIONAL PLEA THAT DEDUCTEE HAVE PAID AS PER THEIR TAX RETURNS. WE FIND THAT THE LD.CIT(A) HAS GIVEN FINDING ON FACT THAT THE ASSESSEE HAS PLACED ON RECORD THE COPIES OF THE ACK NOWLEDGEMENT OF INCOME-TAX RETURN OF M/S.ARVIND & CO., M/S.SHREEJI SHIPPING AND SHRI PAPPUBHA MANEK (PROP. OF INDIAN ROADLINES) FOR THE RELEVANT YEAR UNDER CONSIDERATION. THIS FINDING OF THE LD.CIT(A) IS N OT CONTROVERTED BY THE REVENUE. THEREFORE, WE DO NOT FIND ANY REASON TO I NTERFERE WITH THE ORDER OF THE LD.CIT(A) IN THE LIGHT OF THE JUDGEMEN T OF HONBLE APEX COURT RENDERED IN THE CASE OF HINDUSTAN COCA COLA B EVERAGE P.LTD. REPORTED AT (2007) 293 ITR 226(SC). THE HONBLE AP EX COURT IN THE SAID CASE HAS HELD AS UNDER:- 10. BE THAT AS IT MAY, THE CIRCULAR NO. 275/201/95-IT(B ), DT. 29TH JAN., 1997 ISSUED BY THE CBDT, IN OUR CONSIDERED OPINION, SHOULD PUT AN END TO THE CONTROVERSY. THE CIRCULAR DECLARES 'NO DEMAN D VISUALIZED UNDER S. 201(1) OF THE IT ACT SHOULD BE ENFORCED AFTER TH E TAX DEDUCTOR HAS SATISFIED THE OFFICER-IN-CHARGE OF TDS, THAT TAXES DUE HAVE BEEN PAID BY ITA NOS.381& 382/RJT /2012 ACIT (TDS) RAJKOT VS. M/S.ASHAPURA MINECHEM LTD. ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 6 - THE DEDUCTEE-ASSESSEE. HOWEVER, THIS WILL NOT ALTER THE LIABILITY TO CHARGE INTEREST UNDER S. 201(1A) OF THE ACT TILL TH E DATE OF PAYMENT OF TAXES BY THE DEDUCTEE-ASSESSEE OR THE LIABILITY FOR PENALTY UNDER S. 271C OF THE IT ACT'. 6. RESPECTFULLY FOLLOWING THE AFORESAID JUDGEMENT O F HONBLE SUPREME COURT, THIS PLEA OF REVENUE IS REJECTED. 7. IN THE RESULT, REVENUES APPEAL IN ITA NO.381/RJ T/2012 FOR AY 2008-09 IS DISMISSED. 8. NOW, WE TAKE UP THE REVENUES APPEAL IN ITA NO.3 82/RJT/2012 FOR AY 2009-10. SINCE THE FACTS AND GROUNDS IN THI S APPEAL ARE IDENTICAL TO THE FACTS AND GROUNDS OF REVENUES APPEAL IN ITA NO.381/RJT/2012 FOR AY 2008-09(SUPRA), THEREFORE TAKING A CONSISTEN T VIEW PASSED IN REVENUES APPEAL FOR AY 2008-09(SUPRA), WE DISMISS THE APPEAL OF THE REVENUE IN AY 2009-10. 9. IN THE RESULT, BOTH THE APPEALS OF THE REVEN UE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON THURSDAY, THE 18 TH DAY OF DECEMBER, 2014 AT AHMEDABAD. SD/- SD/- ( ) ( ) !'# # ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 18 / 12 /2014 ..,.../ T.C. NAIR, SR. PS ITA NOS.381& 382/RJT /2012 ACIT (TDS) RAJKOT VS. M/S.ASHAPURA MINECHEM LTD. ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 7 - / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. 6 7 / CONCERNED CIT 4. 7 ( ) / THE CIT(A)-II, RAJKOT 5. 9:, , , /DR,ITAT,RAJKOT 6. :EFG0 / GUARD FILE. / BY ORDER, -9, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) # $%&, / ITAT, RAJKOT 1. DATE OF DICTATION .. 16.12.2014(DICTATION-PAD 9 -PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16.12.14 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BAC K TO THE SR.P.S./P.S.18.12.14 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 18.12.14 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER