SHRI PANDURANG G. KAPSE, Nagpur V. A.C.I.T WARDH CIRCLE, Wardha

ITA 39/NAG/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2136 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 06-02-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: Opportunity of being heard
• Section: 2

Judgement Text

1 ITA NO. 39/NAG/2015. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 39 /NAG/201 5 . ASSESSMENT YEAR : 200 7 - 08 . PANDURANG G. KAPSE, ASSTT. COMMISSIONER OF INCOME - TAX, WARDHA. VS. WARDHA CIRCLE, WARDHA. PAN ABZPK4101C. APPELLANT. RESPONDENT. APPELLANT BY : SHRI MANOJ MORYANI. RESPONDENT BY : SHRI A.R. NINAWE. DATE OF HEARING : 13 - 07 - 2016 DATE OF PRONOUNCEMENT : 14 TH JULY, 2016 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEAL S) - I, NAGPUR DATED 24 - 11 - 2014 AND PERTAINS TO ASSESSMENT YEAR 200 7 - 08 . THE GROUNDS OF APPEAL READ AS UNDER: 1. THE COMMISSIONER OF INCOME - TAX (APPEALS) - I, NAGPUR ERRED IN CONFIRMING TOTAL ADDITION MADE BY THE ASSESSING OFFICER AT RS.4,91,460/ - , THEREFORE ORDER PASSED IS ILLEGAL, INVALID AND BAD IN LAW. 2. THE COMMISSIONER OF INCOME - TAX (APPEALS) - I, NAGPUR ERRED IN NOT CONSIDERING THAT THE SUM OF RS.3,91,460/ - WERE NOT OUTSTANDING AMOUNT AS ON 31/03/2007 AND THE SAME WERE ACTUALLY PAID, THEREFORE THE ADDITION CONFIRMED ARE UNJUSTIFIED, UNWARRANTED AND EXCESSIVE. 3. THE COMMISSIONER OF INCOME - TAX (APPEALS) - I, NAGPUR ERRED IN NOT CONSIDERING THAT THE PROVISION OF SECTION 194C(1)(K) WERE INTROD UCED FROM 01/06/2007 AND NOT APPLICABLE FOR THE ASSTT. YEAR 2007 - 08, THEREFORE ORDER PASSED IS UNJUSTIFIED, UNWARRANTED AND EXCESSIVE. 4. THE COMMISSIONER OF INCOME - TAX (APPEALS) - I, NAGPUR ERRED IN NOT CONSIDERING THE DETAIL REPLY OF THE ASSESSEE RELATING TO TRANSPORTATION EXPENSES AND CONFIRMED THE ADDITION OF RS.3,91,460/ - U/S 40A(IA), 2 ITA NO. 39/NAG/2015. THEREFORE THE ADDITION CONFIRMED ARE UNJUSTIFIED, UNWARRANTED AND EXCESSIVE. 5. THE COMMISSIONER OF INCOME - TAX (APPEALS) - I, NAGPUR ERRED IN NOT CONSIDERING THE DETAIL REPLY OF TH E ASSESSEE RELATING TO LABOUR EXPENSES AND CONFIRMED THE ADDITION OF RS.1,00,000/ - INCURRED FOR LABOUR EXPENSES, THEREFORE THE ADDITION CONFIRMED ARE UNJUSTIFIED, UNWARRANTED AND EXCESSIVE. 2. IN THIS CASE TWO ADDITIONS WERE MADE BY THE AO. FIRST WAS DISAL LOWANCE OF TRANSPORTATION EXPENDITURE OF RS.3,91,460/ - U/S 40A( I A) ON ACCOUNT OF NON DEDUCTION OF TDS. SECOND DISALLOWANCE WAS RS.1,00,000/ - OUT OF LABOUR EXPENDITURE. 3. UPON ASSESSEES APPEAL LEARNED CIT(APPEALS) DISMISSED THE ASSESSEES APPEAL. BUT IN T HE BODY OF THE ORDER HE ONLY CONSIDERED THE ISSUE OF DISALLOWANCE OF TRANSPORTATION EXPENDITURE AND DID NOT DEAL WITH THE ISSUE OF DISALLOWANCE OF LABOUR EXPENDITURE. 4. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 5. I HAVE HEARD BOT H THE COUNSEL AND PERUSED THE RECORDS. AT THE OUTSET I FIND THAT THIS IS A CASE OF AN INDIVIDUAL. PROVISIONS OF SECTION 194C(1) WERE MADE APPLICABLE TO THE INDIVIDUALS WITH EFFECT FROM 31 - 03 - 2007. HENCE ASSESSEES CONTENTION IS QUITE CORRECT THAT THE PROV ISIONS FOR DEDUCTION OF TDS UPON INDIVIDUALS IS NOT APPLICABLE IN THE PRESENT CASE. FOR THIS PROPOSITION ASSESSEES RELIANCE ON FOLLOWING CASE LAWS IS ALSO CORRECT: 1. (2013) 053 (I) 0053 (GUJ.H.C.) COMMISSIONER OF INCOME TAX VS. VIS HNUDUTT SHARMA. 2. ITA NO. 17/AHD/2011 (ITAT AHD) SHRI PRASHANT H. SHAH VS. THE ASSTT. COMMISSIONER OF INCOME - T A X. FURTHER MORE I FIND THAT THE ASSESSEES PLEA IS COGENT THAT THE PROVISIONS OF SECTION 40A(IA) WERE ALSO NOT APPLICABLE INASMUCH AS THE TRANSPORTATION EXPENDITURE WAS PAID AND NO AMOUNT WAS OUTSTANDING AT THE CLOSE OF THE YEAR. 3 ITA NO. 39/NAG/2015. THIS PROPOSITION WAS AFFIRMED BY HONBLE ALLAHABAD HIGH COURT IN THE CASE OF VICTOR SHIPPING SERVICES 262 CTR 545 (ALL.) . DEPARTMENTS SLP AGAINST THIS ORDER HAS ALSO BEEN DISMISSED BY THE HONBLE APEX COURT. 6. IN THE BACKGROUND OF AFORESAID PRECEDENT AND DISCUSSION I SET ASIDE THE ORDER OF LEARNED CIT(APPEALS) QUA THE DISALLOWANCE OF A SUM OF RS.3,91,460/ - ON ACCOUNT OF TR ANSPORTATION EXPENSES AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 7. AS REGARDS THE DISALLOWANCE OF LABOUR EXPENDITURE OF RS.1,00,000/ - I FIND THAT THE LEARNED CIT(APPEALS) HAS NOT DISCUSSED THE SAME IN HIS ORDER. HENCE I REMIT THIS ISSUE TO THE FILE OF LEARNED CIT(APPEALS). LEARNED CIT(APPEALS) SHALL CONSIDER THE SAME AND PASS A SPEAKING ORDER AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF JULY,2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 14 TH JULY, 2016. 4 ITA NO. 39/NAG/2015. COPY FORWARDED TO : 1. SHRI PANDURANG G. KAPSE , C/O MANOJ MORYNI, ADVOCATE, 1 ST FLOOR, SUDAMA BHAVAN, NEAR SUT MARKET, GANDHIBAGH, NAGPUR - 440002. . 2. A.C.I.T., WARDHA CIRCLE, WARDHA. 3. C.I.T. - I.NAGPUR. 4. CIT(APPEALS), - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.