Sh. Govind Singh, Mathura V. I.T.O.3(2), Mathura

ITA 4/AGR/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 56912 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-03-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 05-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SOHAIL AKHTAR
• Assessee Lawyers: M M AGARWAL
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.04/AGR/2011 ASSESSMENT YEAR: 2007-08 SHRI GOVIND SINGH, VS. INCOME TAX OFFICER 3 (2), S/O. SHRI JASWANT SINGH, MATHURA. G.S. TRAVELS, VILLAGE & POST BAD, MATHURA. (PAN: ANXPS 5692 L). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.M. AGARWAL, C.A. RESPONDENT BY : SHRI SOHAIL AKHTAR, JR. D.R. DATE OF HEARING : 02.03.2012 DATE OF PRONOUNCEMENT : 07.03.2012 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 29.10.2010 PASSED BY THE LD. CIT(A)-I, AGRA FOR THE ASSESSMENT YEAR 2007-08. 2. THE EFFECTIVE SOLE GROUND RAISED BY THE ASSESSEE IS IN RESPECT OF DISALLOWANCE OF ` 24,96,000/- UNDER SECTION 40(A)(IA) OF THE INCOME T AX ACT, 1961 (THE ACT HEREINAFTER). ITA NO.04/AGR/2011 A.Y. 2007-08 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E DERIVES INCOME FROM PLYING OF PASSENGER VEHICLES. DURING THE YEAR, THE ASSESS EE HAS TAKEN CONTRACTS FROM INDIAN OIL CORPORATION LIMITED, MATHURA FOR PROVIDI NG AND OPERATING PASSENGER VEHICLES ON HIRE BASIS. THE ASSESSING OFFICER NOTI CED THAT THE ASSESSEE HAD DEBITED ` 24,96,000/- AS VEHICLE RENT PAID TO DIFFERENT PARTI ES. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE UNDER SECTION 194C OF THE ACT BUT THE ASSESSEE DID NOT DEDUCT THE TAX. T HEREFORE, THE CLAIM OF THE ASSESSEE IS DISALLOWABLE UNDER SECTION 40(A)(IA) OF THE ACT. THE ASSESSING OFFICER WAS ALSO OF THE VIEW THAT THE CASE OF THE ASSESSEE IS ALSO COVERED BY THE PROVISIONS OF SECTION 194-I OF THE ACT IN VIEW OF THE AMENDED PROVISION OF SECTION 194-I W.E.F. 13.07.2006 BY WHICH PLANT & MACHINERY HAS BEEN INCL UDED FOR THE PURPOSE OF SECTION 194-I OF THE ACT. THE ASSESSING OFFICER AC CORDINGLY DISALLOWED THE ASSESSEES CLAIM UNDER SECTION 40(A)(IA) OF THE ACT AND MADE ADDITION OF ` 24,96,000/-. THE CIT(A) IN RESPECT OF APPLICABILIT Y OF SECTION 194C, FOLLOWING THE ORDER OF I.T.A.T. IN ASSESSEES OWN CASE FOR AS SESSMENT YEARS 2005-06 & 2006-07 HELD THAT SECTION 194C IS NOT APPLICABLE. HOWEVER, THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER IN RESPECT OF AP PLICATION OF PROVISIONS OF SECTION 194-I OF THE ACT. ITA NO.04/AGR/2011 A.Y. 2007-08 3 4. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. AS REGARDS THE APPLICABILITY OF SECTION 194-I OF TH E ACT, THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE AS THE CIT(A) HAS FOLLOWED T HE ORDER OF THE I.T.A.T. IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2005-06 & 2006-07. THE REVENUE IS NOT IN APPEAL BEFORE US AGAINST THE FINDING OF THE CIT(A) IN THE YEAR UNDER CONSIDERATION. IN RESPECT OF APPLICABILITY OF SECT ION 194-I OF THE ACT, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT T HE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF I.T.A.T., AHMEDABAD BE NCH IN THE CASE OF AHMEDABAD URBAN DEVELOPMENT AUTHORITY IN ITA NO.1637/AHD/2010 FOR THE ASSESSMENT YEAR 2009-10 ORDER DATED 10.03.2011, THE DECISION CITED BY THE LD. AUTHORISED REPRESENTATIVE. THE RELEVANT FINDING OF THE I.T.A. T. IS REPRODUCED AS UNDER :- THE ASSESSING OFFICER HOWEVER, NOTED THAT THE PROVI SIONS OF SECTION 194-I OF THE IT ACT WOULD APPLY IN THE MATTER BEING RENT PAID TO THE CONTRACTOR WHICH PROVIDES AS UNDER : (PRIOR TO AMEN DMENT W.E.F. 1.10.2009) 194-I ANY PERSON, NOT BEING AN INDIVIDUAL OR A HIN DU UNDIVIDED FAMILY, WHO IS RESPONSIBLE FOR PAYING TO [A RESIDENT] ANY INCOME BY WAY OF RENT, SHALL, AT THE TIME OF CR EDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE OR AT THE TIME O F PAYMENT THEREOF IN CASH OR BY THE ISSUE OF A CHEQUE OR DRAF T OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, [DEDUCT INCOME-TA X THEREON AT THE RATE OF- [ (A) TEN PER CENT FOR THE USE OF ANY MACHINERY OR PL ANT OR EQUIPMENT; AND ITA NO.04/AGR/2011 A.Y. 2007-08 4 (B) FIFTEEN PER CENT FOR THE USE OF ANY LAND OR BUI LDING (INCLUDING FACTORY BUILDING) OR LAND APPURTENANT TO BUILDING (INCLUDING FACTORY BUILDING) OR FURNITURE OR FITTIN G WHERE THE PAYEE IS AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY; AND ] ] (C) TWENTY PERCENT FOR THE USE OF ANY LAND OR BUILD ING (INCLUDING FACTORY BUILDING) OR LAND APPURTENANT TO A BUILDING (INCLUDING FACTORY BUILDING) OR FURNITURE OF FITTIN GS WHERE THE PAYEE IS A PERSON OTHER THAN AN INDIVIDUAL OR A HIN DU UNDIVIDED FAMILY. PROVIDED THAT NO DEDUCTION SHALL BE MADE UNDER THIS SECTION WHERE THE AMOUNT OF SUCH INCOME OR, AS THE CASE MAY BE, THE AGGREGATE OF THE AMOUNTS OF SUCH INCOME CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE FINANCIAL YEAR BY THE AFORESAID PERSON TO THE ACCOUNT OF, OR TO, THE PAYE E, DOES NOT EXCEED ONE HUNDRED AND TWENTY THOUSAND RUPEES; [ PROVIDED FURTHER THAT AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNOV ER FROM THE BUSINESS OR PROFESSION CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE (A) OR CLAUSE (B) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANCIAL YEAR IN WHICH SUCH INCOME BY WAY OF RENT IS CREDITE D OR PAID, SHALL BE LIABLE TO DEDUCT INCOME-TAX UNDER THIS SEC TION.] EXPLANATION. FOR THE PURPOSES OF THIS SECTION.- [(I) RENT MEANS ANY PAYMENT, BY WHATEVER NAME CAL LED, UNDER ANY LEASE, SUB-LEASE, TENANCY OR ANY OTHER AG REEMENT OR ARRANGEMENT FOR THE USE OF (EITHER SEPARATELY OR TO GETHER) ANY,- (A) LAND; OR (B) BUILDING (INCLUDING FACTORY BUILDING); OR (C) LAND APPURTENANT TO A BUILDING (INCLUDING FACTO RY BUILDING); OR (D) MACHINERY; OR (E) PLANT; OR (F) EQUIPMENT; OR ITA NO.04/AGR/2011 A.Y. 2007-08 5 (G) FURNITURE; OR (H) FITTINGS, WHETHER OR NOT ANY OR ALL OF THE ABOVE ARE OWNED BY THE PAYEE;] (II) WHERE ANY INCOME IS CREDITED TO PAY ACCOUNT, WHETHER CALLED SUSPENSE ACCOUNT OR BY ANY OTHER NAME, IN THE BOOKS OF ACCOUNT OF THE PERSON LIABLE TO PAY SUCH INCOME, SUCH CREDITING SHALL BE DEEMED TO BE CREDIT OF SUCH INCO ME TO THE ACCOUNT OF THE PAYEE AND THE PROVISIONS OF THIS SEC TION SHALL APPLY ACCORDINGLY.]. THE ABOVE DEFINITION OF RENT DOES NOT PROVIDE ANY I TEM FOR VEHICLE HIRE CHARGES. THEREFORE, PROVISIONS OF SECTION 194-I HA S BEEN WRONGLY APPLIED IN THE MATTER BY THE ASSESSING OFFICER. CO NSIDERING THE ABOVE DISCUSSIONS WE ARE OF THE VIEW THAT THE AUTHORITIES BELOW HAVE WRONGLY APPLIED THE PROVISIONS OF SECTION 194-I OF THE IT A CT IN THE MATTER. WE ACCORDINGLY, SET SIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE DEMAND AND THE INTEREST THEREON FOR SHORTFALL AS NO TED BY THE ASSESSING OFFICER ON THIS ISSUE. 5. ON IDENTICAL SET OF FACTS, THE I.T.A.T. HAS DECI DED THE ISSUE IN FAVOUR OF THE ASSESSEE AS PER THE ABOVE ORDER OF I.T.A.T., AHMEDA BAD BENCH. WE FIND THAT THE DIFFERENT ISSUES RAISED BY THE REVENUE THAT IN THE DEFINITION OF RENT, RENT FROM PLANT INCLUDES VEHICLES HAVE BEEN CONSIDERED BY THE I.T.A .T., AHMEDABAD BENCH AND HAS DECIDED THE ISSUE AFTER A DETAILED DISCUSSION. SIN CE THE FACTS ARE IDENTICAL I.E. IN THE CASE OF VEHICLE HIRE, SECTION 194-I IS NOT APPLICAB LE. WE RESPECTFULLY FOLLOW THE ABOVE ORDER OF I.T.A.T., AHMEDABAD BENCH AND IN THE LIGHT OF THAT, THE ADDITION MADE BY THE ASSESSING OFFICER OF ` 24,96,000/- IS DELETED AS THE ASSESSEE WAS NOT ITA NO.04/AGR/2011 A.Y. 2007-08 6 LIABLE TO DEDUCT TAX UNDER SECTION 194-I OF THE ACT . CONSEQUENTLY, NO DISALLOWANCE CAN BE MADE UNDER SECTION 40(A)(IA) OF THE ACT. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON 07.03.2012. SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 7 TH MARCH, 2012 PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT RESPONDENT CIT CONCERNED CIT (APPEALS) CONCERNED D.R., ITAT AGRA BENCH, AGRA GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY