M/s ACIT, Circle-5(1), Visakhapatnam V. Sri P Ramachandra Rao, Visakhapatnam

ITA 387/VIZ/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50147 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 17-07-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: TH LUCAS PETER
• Assessee Lawyers: C SUBRAMANYAM
• Section: 194C

Judgement Text

ITA NO387 OF 2009 P RAMA CHANDRA RAO VISAKPAHATANAM PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.387/VIZAG/2009 ASSESSMENT YEAR: 2006-07 ACIT CIRCLE-5(1) VISAKHAPATNAM VS. P. RAMA CHANDRA RAO, VISAKHAPATNAM (APPELLANT) (RESPONDENT) PAN NO:AAQPP 2877 E APPELLANT BY: SHRI T.H. LUCAS PETER, CIT (DR) RESPONDENT BY: SHRI C. SUBRAMANYAM, CA ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE O RDER DATED 26.05.2009 PASSED BY LEARNED CIT(A), VISAKHAPATNAM AND IT RELATES TO THE ASSESSMENT YEAR 2006-07. 2. THE GROUNDS RAISED BY THE REVENUE GIVE RISE TO T HE FOLLOWING TWO ISSUES: A) WHETHER THE LEARNED CIT (A) IS JUSTIFIED IN DELE TING THE DISALLOWANCE MADE UNDER SECTION 40(A)(IA) OF THE AC T. B) WHETHER THE LEARNED CIT (A) IS JUSTIFIED IN DELE TING THE ADDITION OF RS.6,21,486/- RELATING TO THE EXCESS CL AIM OF EXPENDITURE. 3. THE FACTS RELATING TO THE CASE ARE STATED IN BRI EF. THE ASSESSEE IS AN INDIVIDUAL AND IS CARRYING ON BUSINESS AS TRANSPORT CONTRACTOR UNDER THE NAME M/S VEERABHADRA TRANSPORTS. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE EXECUTED TRANSPORT CONTRACT FOR M/S IND IAN OIL CORPORATION THROUGH HIS OWN LORRIES AS WELL AS HIRED LORRIES. D URING THE COURSE OF SCRUTINY PROCEEDINGS, THE ASSESSING OFFICER COMPARED THE STA TEMENT OF EXPENDITURE ITA NO387 OF 2009 P RAMA CHANDRA RAO VISAKPAHATANAM PAGE 2 OF 4 FURNISHED FOR EACH LORRY WITH THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AND NOTICED THAT THERE WAS EXCESS CLAIM OF EXPENSES TO THE TUNE OF RS.6,21,486/- IN THE BOOKS OF ACCOUNT VIS--VIS HIS STATEMENT OF ACCOUNTS. THE ASSESSING OFFICER DISALLOWED THE SAID EXCESS CL AIM. FURTHER THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS NOT DEDUCTED TDS ON HIRE CHARGES PAID TO HIRED VEHICLES. THE ASSESSEE CLAIME D THAT IT HAD OBTAINED FORM NO.15-I FROM THE LORRY OWNERS FOR NON DEDUCTION OF TAX AT SOURCE. HOWEVER, ON VERIFICATION OF THE SAID FORMS THE ASSE SSING OFFICER NOTICED THAT THE HIRE CHARGES TO THE EXTENT OF RS.54.64 LAKHS AR E NOT COVERED BY FORM NO.15-I AND IN RESPECT OF RS.30.52 LAKHS, FORM NO.15 -I FURNISHED BY LORRY OWNERS WAS NOT IN ACCORDANCE WITH THE LAW. ACCORDIN GLY THE ASSESSING OFFICER DISALLOWED AGGREGATE OF BOTH THE AMOUNTS CI TED ABOVE, I.E. RS.85.17 LAKHS BY INVOKING PROVISIONS OF SEC.40(A)(IA) OF TH E ACT, AS THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO DEDUCT TAX A T SOURCE UNDER SECTION 194C OF THE ACT ON THE HIRE CHARGES PAID BY THE ASS ESSEE. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT (A) AND OBTAINED RELIEF IN RESPECT OF BOTH THE ADDITIONS. HENCE THE REVENUE IS IN APPEAL BEFORE US. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELI ED UPON THE FOLLOWING CASE LAW TO SUBMIT THAT THE PROVISIONS OF SEC. 194C ARE APPLICABLE TO THE HIRE CHARGES PAID AND HENCE THE ASSESSING OFFICER W AS RIGHT IN MAKING DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT. I) SHREE CHOUDHARY TRANSPORT COMPANY VS. I.T.O (2009 ) 225 CTR (RAJ) 125 II) SMT. J. RAMA VS. C.I.T. & ANR (2010) 194 TAXMAN 37 (KAR.) WITH REGARD TO THE RELIEF OF RS.6,21,486/- GRANTED BY THE LEARNED CIT (A) IN RESPECT OF EXCESS CLAIM OF EXPENDITURE, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE FIRST APPELLATE A UTHORITY HAS CONSIDERED FRESH EVIDENCES SUBMITTED FOR THE FIRST TIME BEFORE HIM WITHOUT CONFRONTING THE SAME WITH THE ASSESSING OFFICER. ACCORDINGLY HE PLEADED THAT THE SAID ISSUE MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER. ITA NO387 OF 2009 P RAMA CHANDRA RAO VISAKPAHATANAM PAGE 3 OF 4 5. ON THE CONTRARY THE LEARNED AUTHORISED REPRESENT ATIVE SUBMITTED THAT THE ISSUE OF DEDUCTION OF TAX AT SOURCE HAS BE EN COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION RENDERED BY THIS BENCH IN THE CASE OF MYTHRI TRANSPORT CORPORATION REPORTED IN (2010) 1 ITR (TRI B) 290 AND ALSO BY THE UNREPORTED DECISION OF THIS BENCH IN THE CASE OF SH RI M. SEETHARAMAIAH IN ITA NO.355/VIZAG/2008. HE FURTHER SUBMITTED THAT TH E LEARNED CIT (A) HAS FOLLOWED BOTH THE DECISIONS CITED ABOVE FOR THE PUR POSE OF GRANTING RELIEF TO THE ASSESSEE. WITH REGARD TO THE RELIEF GRANTED IN RESPECT OF EXPENDITURE OF RS.6,21,486/-, THE LEARNED AUTHORISED REPRESENTATIV E DID NOT OBJECT TO THE PLEA OF SETTING ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. THE UNDISPUTED FACT IS THAT THE ASSESSEE IS AN INDIVIDUAL. THE ASSESSING OFFICER DID NOT SPECIFICALLY MENTION AS T O WHETHER THE PROVISIONS OF PROVISIONS OF SEC. 194C (1) OR SEC. 194C (2) HAV E BEEN VIOLATED BY THE ASSESSEE. IT IS PERTINENT TO NOTE THAT THE PROVISI ONS OF SEC. 194C (1) ARE MADE APPLICABLE TO THE INDIVIDUAL ASSESSEES ONLY W. E.F. 1-6-2007, MEANING THEREBY THE PROVISIONS OF SEC.194C (1) ARE NOT APPL ICABLE TO THE YEAR UNDER CONSIDERATION, VIZ., ASSESSMENT YEAR 2006-07. IN THE CASE OF MYTHRI TRANSPORT CORPORATION AND SHRI M. SEETHARAMAIAH REF ERRED (SUPRA), IT HAS BEEN SPECIFICALLY HELD THAT THE PROVISION OF SEC.19 4C (2) ARE NOT APPLICABLE FOR HIRING OF VEHICLES, AS SIMPLE HIRING OF VEHICLE S CANNOT BE TAKEN AS A SUB- CONTRACT. WE ALSO NOTICE THAT THE LEARNED CIT (A) HAS FOLLOWED THE DECISION OF TWO CASES CITED ABOVE. SINCE THE TRIBUNAL HAS A LREADY TAKEN A PARTICULAR VIEW ON THE IMPUGNED ISSUE AND SINCE THE DECISION O F LEARNED CIT(A) IS IN ACCORDANCE WITH THE SAID VIEW, WE DO NOT FIND ANY REASON TO INTERFERE WITH HIS DECISION ON THIS ISSUE. WITH REGARD TO THE OTHE R ISSUE RELATING TO DISALLOWANCE OF EXCESS CLAIM, BOTH THE PARTIES HAVE AGREED THAT THE MATTER MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFIC ER FOR EXAMINATION OF THE FRESH EVIDENCES FILED BEFORE THE LEARNED CIT (A). ACCORDINGLY WE SET ASIDE THE ORDER OF THE LEARNED CIT (A) ON THE ISSUE OF DI SALLOWANCE OF EXPENSES ITA NO387 OF 2009 P RAMA CHANDRA RAO VISAKPAHATANAM PAGE 4 OF 4 AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE FRESH EVIDENCES FILED BY THE ASSESSEE A ND DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREAT ED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 7 TH APRIL, 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE:07-04-2011 COPY TO 1 THE ACIT, CIRCLE - 5(1), VISAKHAPATNAM 2 SRI P. RAMACHANDRA RAO, S/O SRI VENKANNA, PROP. M /S VEERABHADRA TRANSPORTS, 15-44/A, OLD GAJUWAKA, SRI NAGAR, VISAK HAPATNAM 530026 3 4. THE CIT 1, VISAKHAPATNAM THE CIT(A), VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM