The ACIT, Circle-5, Baroda V. M/s. Shree Pramukh Transport Co., Baroda

ITA 404/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0606 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-09-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 12-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Section: 194C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD BEFORE SHRI PRAMODKUMAR, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ ITA.NO.404/AHD/2013 / ASSTT. YEAR: 2005-2006 DCIT, CIR.5 BARODA. VS M/S.SHREE PRAMUKH TRANSPORT CO. BHUTADI ZAMPA ROAD NR.POLICE STATION BARODA. PAN : AAFFS 2826 M ! / (APPELLANT) '# ! / (RESPONDENT) REVENUE BY : SHRI KAMLESH MAKWANA, SR.DR ASSESSEE BY : SHRI M.K. PATEL, AR / DATE OF HEARING : 09/09/2016 / DATE OF PRONOUNCEMENT: 12/09/2016 $%/ O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER: REVENUE HAS PREFERRED THIS APPEAL AGAINST THE ORDER OF LD.CIT(A)-V, BARODA DATED 29.11.2012 FOR THE ASSTT.YEAR 2005-06. 2. THE GROUND RAISED BY THE REVENUE IN THIS APPEAL READS AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING DISALLOWANCE OF RS .70,53,395/- MADE U/S 40(A)(IA) OF THE IT ACT THEREBY OVERRIDING BOAR D'S CIRCULAR NO. 1/2011 [F.NO. 142/1/2011-SO(TPL)], DATED 6-4-2011, WHEREIN IT IS CLEARLY STATED THAT THE SAID AMENDMENT TO SECTION 4 0(A)(IA) OF THE IT ACT WOULD BE APPLICABLE TO ASSESSMENT YEAR 10-11 AND SU BSEQUENT YEARS. ITA NO.404/AHD/2013 2 3. BRIEF FACTS AS CAN BE SEEN FROM THE ORDERS OF TH E REVENUE AUTHORITIES ARE THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 31.10.2005 DECLARING TOTAL INCOME AT RS.1,38,360/-. THIS RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE UNDER SECTION 143(2) WAS ISSUED AND SERVED U PON THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICE D THAT ASSESSEE HAS DEBITED A SUM OF RS.75,49,425/- TO THE P&L ACCOUNT AS CARTING EXPENSES. ON FURTHER VERIFICATION OF THE RECORD, THE AO FOUND TH AT THIS PAYMENT ATTRACTS PROVISIONS OF SECTION 194C OF THE INCOME TAX ACT AN D LIABLE TO TDS. THE ASSESSEE IS REQUIRED TO DEPOSIT THE TDS AMOUNT WITH IN THE DUE DATE PRESCRIBED UNDER THE ACT. THE AO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY CARTING CHARGES SHOULD NOT BE DISALLOWED UNDER SECT ION 40(A)(IA) OF THE ACT. THE ASSESSEE IN ITS REPLY, INTERALIA REPLIED THAT THE PROVISIONS OF SECTION 40(A)(IA) WOULD NOT ATTRACT IN THE CASE OF THE ASSE SSEE, AS THE ASSESSEE RENDERED SERVICES ON BEHALF OF THE TRUCK OWNERS AND RECEIVES COMMISSION INCOME, AND THAT TOO NOT IN EXCESS OF THE LIMITS PRESCRIBED FOR GETTING THE ACCOUNTS AUDITED U/S.44AB OF THE ACT. THE AO WAS NOT SATISFIED WITH THIS EXPLANATION OF THE ASSESSEE AND DISALLOWED CARTING CHARGES OF RS.70,53 ,395/- AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED WITH THE ACTION OF THE AO, THE ASSESSE E WENT IN APPEAL BEFORE THE LD.CIT(A). THE LD.CIT(A) AFTER CONSIDE RING THE FACTS AND CIRCUMSTANCES OF THE CASE, AND ALSO FOLLOWING THE O RDER OF THE TRIBUNAL IN THE CASE OF RAMESCHANDRA BHRAMBHATT IN ITA NO.3150/AHD/ 2008 DATED 21.9.2012 AND THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. VIRGIN CREATIONS DELETED DISALLOWANCE. NOW , REVENUE IS IN APPEAL BEFORE US. ITA NO.404/AHD/2013 3 5. THE LD.DR RELIED UPON THE ORDER OF THE AO, WHERE AS THE LD.COUNSEL FOR THE ASSESSEE DEFENDED IN SUPPORT OF THE ORDER OF TH E LD.CIT(A), AND STRONGLY RELIED UPON THE DECISION OF THE ITAT, AHMEDABAD BEN CH IN THE CASE OF RAMESCHANDRA BHRAMBHATT WHICH WAS FOLLOWED BY THE L D.CIT(A). A COPY OF THE ORDER OF THE ITAT IN THE CASE OF RAMESCHANDRA B HRABHATT (SUPRA) IS PLACED ON RECORD. 6. WE HAVE CONSIDERED SUBMISSIONS OF THE PARTIES AN D ALSO MATERIAL AVAILABLE ON RECORD. WE DO NOT FIND ANY ILLEGALITY IN THE ORDER OF THE LD.CIT(A), INASMUCH AS THE LD.CIT(A) WHILE PASSING THE IMPUGNED ORDER HAS TAKEN INTO CONSIDERATION ORDER OF THE ITAT, AHMEDAB AD BENCH IN THE CASE OF RAMESCHANDRA BRAHMBHATT (SUPRA), WHEREIN IN AN IDEN TICAL SITUATION, THE TRIBUNAL ALLOWED SIMILAR CLAIM OF THE ASSESSEE TOWA RDS CARTING EXPENSES. THE RELEVANT PART OF THE TRIBUNAL READS AS UNDER: 4. NOW THE APPELLANT IS BEFORE US. THE LD. COUNSEL FOR THE APPELLANT CONTENDED THAT THE ASSESSEE HAD PAID TDS ON 13.05.2 005. HE RELIED ON ASSESSEES OWN CASE IN SPECIAL CIVIL APPLICATION NO .11902 OF 2008 OF HONBLE GUJARAT HIGH COURT FOR A.Y. 05-06 WHEREIN T HE HONBLE GUJARAT HIGH COURT GRANTED STAY FOR NOT TO OPERATE, EXECUTE AND IMPLEMENT OF THE IMPUGNED ORDER DATED 27.12.2007. S LP WAS FILED TO CHALLENGE THE VALIDITY OF AMENDMENT MADE U/S. 40(A) (IA) BY THE FINANCE ACT, 2008 W.E.F. 01.04.2005. HE FURTHER RELIED ON T HE CO-ORDINATE B BENCH, AHMADABAD, DECISION IN ITA NO. 3465/AHD/2008 FOR A.Y. 2005- 06 IN CASE OF SHREEDHAN CONSTRUCTION CO. VS. ITO., WHEREIN THE TDS OF RS.62,087/- U/S. 194(C) WAS DEDUCTED BY THE ASSESSE E AND PAID ON 25.05.2005 FOR A.Y. 05-06, WHICH WAS TO BE PAID IN GOVERNMENT ACCOUNT BY THE 7TH DAY OF THE FOLLOWING MONTH. THE CO-ORDINATE B BENCH, AHMADABAD, RELIED UPON IN CASE OF CIT VS. VI RGIN CREATIONS (APPEAL NO.302 OF 2007 [GA NO.3200/2011] ORDER DATE D 23/11/2011) WHEREIN CALCUTTA HIGH COURT ALLOWED THE APPEAL ON T HE BASIS OF THAT APPELLANT HAD PAID THE TDS IN GOVERNMENT ACCOUNT ON OR BEFORE THE DATE OF FILING THE RETURN OF INCOME FOR THE YEAR A. Y. 05-06. THE CO- ORDINATE B BENCH, ALSO RELIED UPON THE DECISION O F ITAT C BENCH, ITA NO.404/AHD/2013 4 AHMADABAD, IN CASE OF M/S. ALPHA PROJECTS SOCIETY P . LTD. VS. DCIT BEARING ITA NO. 2869/AHD/2011 (A.Y. 2005-06) VIDE O RDER DATED 23/03/2012, WHEREIN THE SIMILAR ISSUE WAS BEFORE TH EM AND ALLOWED THE APPEAL BY CONSIDERING THE HONBLE CALCUTTA HIGH COU RT DECISION IN CASE OF CIT VS. VIRGIN CREATIONS (SUPRA). FROM THE SIDE OF REVENUE, LD. SR. D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND REQUESTED TO CONFIRM THE ADDITION. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSIDER ING THE CASE LAWS CITED BY THE APPELLANT. BOTH THE PARTIES ARE AGREED THAT THE FACTS ARE IDENTICAL WITH THE CASE LAWS CITED BY THE APPELLANT AND SQUARELY APPLICABLE IN CASE OF APPELLANT. TDS HAD BEEN DEDUC TED BY THE APPELLANT WHICH WAS PAID ON 13.05.2005 WHICH IS BEF ORE THE DUE DATE OF FILING THE RETURN FOR A.Y. 05-06. ACCORDINGLY, THE ASSESSEES APPEAL IS ALLOWED. IN THE LIGHT OF THE ABOVE, PROVISION OF SECTION 40( A)(IA) DOES NOT ATTRACT IN THE CASE OF THE ASSESSEE. THE LD.CIT(A) HAS RIG HTLY DELETED THE IMPUGNED DISALLOWANCE. HIS ORDER IS ACCORDINGLY UPHELD, AND THE APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 12 TH SEPTEMBER, 2016 AT AHMEDABAD. SD/- SD/- ( PRAMOD KUMAR) ACCOUNTANT MEMBER (MAHAVIR PRASAD ) JUDICIAL MEMBER AHMEDABAD; DATED 12/09/2016 VK*