ITO WD 21(1)(2), MUMBAI V. KISHORE N. TITTA, MUMBAI

ITA 4128/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49070 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 21-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P C MOURYA
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A : MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA. NO. 4128/MUM/2010 ASSESSMENT YEAR 2007-2008 ITO, WARD 21 (1) (2) MUMBAI-400 051 VS. MR. KISHORE N. TITTA MUMBAI 56 PAN ABNPT2273L (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI P.C. MOURYA FOR RESPONDENT : SHRI SAMEER DALAL ORDER PER D. MANMOHAN, V.P. 1. THIS APPEAL IS FILED AT THE INSTANCE OF THE REV ENUE AND IT PERTAINS TO THE ASSESSMENT YEAR 2007-2008. FACTS CO NCERNING THE ONLY ISSUE IN DISPUTE ARE STATED IN BRIEF. 2. ASSESSEE IS ENGAGED IN THE BUSINESS OF GARMENT MANUFACTURE AND EXPORTS. IN RESPECT OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2007-2008 HE DECLARED TOTAL INC OME OF RS.8,68,430/-. THOUGH IT WAS ORIGINALLY PROCESSED U /SEC. 143 (1) OF THE ACT, IT WAS LATER ON TAKEN-UP FOR SCRUTINY AND DURING THE SCRUTINY PROCEEDINGS IT WAS NOTICED THAT THE ASSESSEE HAD MA DE CERTAIN PAYMENTS TO PARTIES WITHOUT DEDUCTING TDS. ACCORDIN G TO THE ASSESSING OFFICER, PAYMENTS EXCEEDING RS.20,000/- W AS MADE IN VIOLATION OF THE PROVISIONS OF SECTION 194C OF THE ACT WHICH IN TURN, ENTAILS DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT. THE AFOREMENTIONED SECTION STIPULATES THAT TDS HAS TO B E DEDUCTED ON ANY PAYMENT, WHICH IS OTHERWISE ALLOWABLE AS DEDUCTION, SUCH DEDUCTION IS PERMISSIBLE ONLY WHEN TAX IS DEDUCTED AND DEPOSI TED. 2 3. WHEN IT WAS PUT TO THE ASSESSEE, EXPLANATION DA TED 4/12/2008 WAS FILED STATING THAT PAYMENTS MADE TO C ONTRACTOR IS NOT COVERED UNDER SECTION 194C (2) OF THE ACT AND CONSE QUENTLY SECTION 40(A)(IA) IS ALSO NOT APPLICABLE. 4. ASSESSING OFFICER REJECTED THE CONTENTION OF TH E ASSESSEE. IN HIS OPINION, PAYMENT OF TDS IS MANDATORY FOR CLA IMING THE EXPENDITURE AND NO EXCEPTION IS PROVIDED ON THIS IS SUE. THE CLAIM THAT ASSESSEE IS NOT A CONTRACTOR WAS NOT ACCEPTED BY TH E ASSESSING OFFICER. HE OBSERVED THAT ASSESSEE IS INVOLVED IN MAKING OF A SPECIFIED PRODUCT AND DOES NOT START ANY WORK WITHOUT OBTAINING A CON FIRMED CONTRACT FROM THE CONTRACTEE WHICH IS CALLED AS KAFTAS. T HUS THERE IS A CONTRACT IN EXISTENCE INVOLVING A CONTRACTOR AND A CONTRACTEE. HE ALSO OBSERVED THAT THOUGH LEARNED CIT(A) HAS ACCEPTED TH E PLEA OF THE ASSESSEE IN THE IMMEDIATELY PRECEDING YEAR I.E., AS SESSMENT YEAR 2006-2007, REVENUE HAS NOT ACCEPTED THE ORDER PASSE D BY THE LEARNED CIT(A) AND A SECOND APPEAL HAS BEEN PREFERRED BEFOR E THE ITAT. UNDER THESE CIRCUMSTANCES, HE INVOKED THE PROVISIONS OF S ECTION 40(A)(IA) OF THE ACT TO DISALLOW A SUM OF RS.71,13,123/-. 5. ON AN APPEAL FILED BY THE ASSESSEE LEARNED CIT( A) OBSERVED THAT ASSESSEE IS NOT COVERED BY SECTION 19 4C(2) OF THE ACT AND CONSEQUENTLY, SECTION 40(A)(IA) IS NOT APPLICAB LE. 6. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. AT T HE TIME OF HEARING LEARNED COUNSEL, APPEARING ON BEHALF OF THE ASSESSEE, PLACED BEFORE US A COPY OF THE ORDER OF THE ITAT, G BENC H, MUMBAI IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 206-200 7 (ITA.NO.3500/MUM/2009 DATED 9 TH APRIL,2010) TO SUBMIT THAT UNDER IDENTICAL CIRCUMSTANCES THE TRIBUNAL HELD THAT SECT ION 194C IS NOT APPLICABLE IN ASSESSEES CASE AND ACCORDINGLY SET A SIDE THE DISALLOWANCE MADE UNDER SECTION 40(A)(IA) OF THE AC T. 3 7. ON THE OTHER HAND, LEARNED D.R. RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE RECORD. IN THE LIGHT OF DECISION OF THE ITAT, I N ASSESSEES OWN CASE FOR THE EARLIER YEAR WE ARE OF THE VIEW THAT THE OR DER PASSED BY THE LEARNED CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. AS PRONOUNCED IN THE OPEN COURT, THE APPEAL FILED BY THE REVENUE IS HERE BY DISMISSED. SD/- SD/- (J.SUDHAKAR REDDY) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATE 16 TH JUNE, 2011 VBP/- COPY TO 1. ITO, WARD 21 (1) (2), 6 TH FLOOR, ROOM NO. 604, PRATYAKSHAKAR BHAVAN, BANDRA-KURLA COMPLEX, BANDRA (E), MUMBA I-400 051 2. MR. KISHORE N. TITTA, MAYUR APTS. DADABHAI CROSS ROAD NO.3, VILE PARLE-WEST, MUMBAI 56 PAN ABNPT2273L 3. CIT(A)-32, MITTAL COURT, B WING, R.NOS. 13 & 1 4, 3 RD FLOOR, NARIMAN POINT, MUMBAI 400 021. 4. CIT, CITY-21, MUMBAI 5. DR A BENCH 6. GUARD FILE (TRUE COPY) BY ORDER ASST. REGISTRAR, ITAT, MUMBAI BENCHES MUMBAI.