ACIT, UDAIPUR V. Shri Laxmi Narayan Tak, UDAIPUR

ITA 417/JODH/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6513 (ITAT-JODHPUR)
• Duration Of Justice: 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-05-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 01-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Revenue expenditure; Capital expenditure
• Section: 40A(3); 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 417/JODH/2013 (A.Y. 2008-09) ACIT, CIRCLE-2, VS. SHRI LAXM I NARAYAN TAK, UDAIPUR. PROP. CHETAK TRAVELLING AGENCY, UDAIPUR. PAN NO. AANPT 4140 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI. DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 20/05/2014. DATE OF PRONOUNCEMENT : 21/05/2014. O R D E R PER N.K. SAINI, A.M THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 30/04/2013 OF LD. CIT(A), UDAIPUR. THE FOLLOWING G ROUNDS HAVE BEEN RAISED IN THIS APPEAL: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN:- 1.1 DELETING THE DISALLOWANCE OF RS. 7,00,000/- MAD E U/S 40(A)(IA) OF THE I.T. ACT IGNORING THE FACTS THAT PAYMENT OF HEARING CHARGES MADE BY THE ASSESSEE IS COVERED BY SECTION 194C OF THE I.T. ACT. 1.2. DELETING THE DISALLOWANCE MADE U/S 40(A)(IA) O F THE I.T. ACT IGNORING THE FACT AND LAW THAT EVEN PRESUMING THE PAYMENT TO BE AS RENT THE BUSES, THESE PAYMENTS WOULD THEN BE COVERED BY SECT ION 194I OF THE 2 I.T. ACT REQUIRING DEDUCTION OF TAX AND CONSEQUENT DISALLOWANCE U/S 40(A)(IA) OF THE I.T. ACT, IF TDS IS NOT DEDUCTED. 2. DELETING THE DISALLOWANCE OF RS. 12,09,000/- MAD E BY THE AO U/S 40A(3) OF THE I.T. ACT IGNORING THAT THE PROVISIONS OF SECTION 40A(3) OF THE I.T. ACT ATTRACTED IF CASH PAYMENT IN ONE DAY A RE MORE THAN RS. 20,000/- IRRESPECTIVE OF THE FACT THAT SINGLE PAYME NT FOR EXPENDITURE IS BELOW. 3. DELETING THE DISALLOWANCE OF RS. 2,10,000/- MADE BY THE AO U/S 40A(3) OF THE I.T. ACT, BEING CASH PAYMENT MADE TO M/S. HINDUSTAN STEEL IGNORING THE FACT THAT THE ASSESSEE HAS CLAIM ED REVENUE EXPENDITURE AS IS EVIDENT FROM ASSESSMENT ORDER AND HAS FAILED TO LINK THIS PAYMENT WITH CONTENDED CAPITAL EXPENDITURE. 4. DELETING THE DISALLOWANCE OF RS. 1,38,000/- MADE BY THE AO U/S 40A(3) OF THE I.T. ACT BEING PAYMENT MADE TO PRAKAS H SALES AGENCY IGNORING THE PROVISIONS OF SECTION 40A(3) OF THE I. T. ACT. THAT THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DE LETE OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2 VIDE GROUND NO. 1.1 & 1.2, THE GRIEVANCE OF THE DE PARTMENT RELATES TO THE DELETION OF DISALLOWANCE OF RS. 7 LAC MADE B Y THE ASSESSING OFFICER UNDER SECTION 40(A)(IA) OF THE I.T. ACT, 1961 (HERE INAFTER REFERRED TO AS THE ACT IN SHORT). 3. FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT T HE ASSESSING OFFICER DISALLOWED BUS HIRE RENT OF RS. 7 LAC PAID TO THE V ARIOUS BUS OWNERS UNDER SECTION 40(A)(IA) OF THE ACT FOR NON-DEDUCTION OF T AX AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A), WHO DELETED THE DISALLOWANCE BY FOLLOWING THE ORDER OF THE ITAT, JODHPUR 3 BENCH IN ASSESSEES OWN CASE FOR THE A.Y. 2006-07 I N I.T.A.NO. 78/JU/2010. BEING AGGRIEVED, THE DEPARTMENT IS IN APPEAL. 5. LEARNED D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFICER WHILE THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PRESENT ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE VIDE ORDER DATED 07/02/2013 IN ASSESSEES OWN CASE IN I.T.A.NO. 78/J U/2010 FOR THE A.Y. 2006-07. THEREFORE, THE LD. CIT(A) WAS FULLY JUSTI FIED IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 6 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE ISSUE UNDER CONSIDERAT ION IS SQUARELY COVERED IN ASSESSEES FAVOUR VIDE AFORESAID REFERRED TO ORD ER DATED 07/02/2013 IN I.T.A.NO. 78/JU/2010 IN ASSESSEES OWN CASE FOR A.Y . 2006-07, WHEREIN THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 6 WHI CH READ AS UNDER:- 6. AFTER HEARING BOTH THE SIDES IN THE LIGHT OF TH E OBTAINING FACTS OF THE CASE, WE HAVE FOUND THAT THE LD. CIT(A) HAS TAK EN A CORRECT DECISION. THE ASSESSING OFFICER HAS NOT BROUGHT AN YTHING ON RECORD SUGGESTING ANY CONTRACT BETWEEN THE ASSESSEE AND TH E OWNERS OF THE BUSES. ALL THE OWNERS OF THE BUSES FROM WHOM THE A SSESSEE HAS HIRED THEM ON MONTHLY RENT HAVE CONFIRMED THE VERSION OF THE ASSESSEE THROUGH CONFIRMATIONS/AFFIDAVITS. THEY HAVE CONFIR MED THAT THEIR BUSES HAVE BEEN GIVEN ON MONTHLY RENT TO THE ASSESS EE. THE ASSESSING OFFICER HAS NOT EXAMINED ANY OF THEM AND NONE OF TH EM HAVE EVER STATED THAT THE ASSESSEE IS A CONTRACTOR AND THEY H AVE GIVEN THEIR BUSES 4 TO HIM. THE FACT THAT IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, ON IDENTICAL FACTS, THE ASSESSING OFFICER HAS ACCEP TED THE CLAIM OF THE ASSESSEE THAT THE BUSES WERE TAKEN BY HIM ON MONTHL Y RENT, ARE NOT TAKEN UNDER A CONTRACT. THE ASSESSING OFFICER IN A SSESSMENT YEAR 2005-06 WHILE MAKING ASSESSMENT U/S 143(3) HAS ACCE PTED THAT SECTION 194C IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE IN RESPECT OF HIRE CHARGES PAID TO THE OWNERS OF THE BUSES. THE FACTS IN THIS YEAR HAVE NOT CHANGED AND IT IS AN ADMITTED FACT, THEREFORE, THE FINDINGS OF THE LD. CIT(A) CANNOT BE FALTERED AND, THEREFORE, NO IN TERFERENCE BY US IS WARRANTED. ACCORDINGLY, THIS GROUND OF THE REVENUE S APPEAL CANNOT BE ALLOWED AND HENCE STANDS DISMISSED. 7 . SO, BY RESPECTFULLY FOLLOWING THE AFORESAID REFER RED TO ORDER DATED 07/02/2013, WE DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 8 . VIDE GROUND NOS. 2 TO 4, THE GRIEVANCE OF THE DE PARTMENT RELATES TO THE DELETION OF RS. 15,57,000/- MADE BY THE ASSE SSING OFFICER UNDER SECTION 40A(3) OF THE ACT. 9 . FACTS RELATING TO THESE ISSUES, IN BRIEF, ARE THA T THE ASSESSING OFFICER MADE THE DISALLOWANCE OF RS. 15,57,000/- (RS. 12,09 ,000/- + RS. 2,10,000/- + RS. 1,38,000/-) BY OBSERVING THAT THE ASSESSEE MADE THE PAYMENTS EXCEEDING RS. 20,000/- IN CASH TO THE VARI OUS PARTIES. 10 . BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A), WHO DELETED THE ADDITION BY FOLLOWING THE ORDER OF THE TRIBUNAL DATED 5 07/02/2013 IN I.T.A.NO. 78/JU/2010 FOR THE A.Y. 200 6-07 IN ASSESSEES OWN CASE. NOW THE DEPARTMENT IS IN APPEAL. 11 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IT IS NOTICED THAT AN IDENTICAL ISSUE HAVING SIMILAR FACTS HAS BEEN DE CIDED IN FAVOUR OF THE ASSESSEE VIDE AFORESAID REFERRED TO ORDER DATED 07/ 02/2013 IN I.T.A.NO. 78/JU/2010 FOR THE A.Y. 2006-07. SINCE THE FACTS F OR THE YEAR UNDER CONSIDERATION ARE IDENTICAL TO THE FACTS INVOLVED I N THE A.Y. 2006-07 WHEREIN VIDE ORDER DATED 07/02/2013 IN I.T.A.NO. 78 /JU/2010, THE ORDER OF THE LD. CIT(A) IN UPHOLDING THE DELETION OF DISA LLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 40A(3) OF THE ACT H AS BEEN CONFIRMED. WE THEREFORE, DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) ON THESE ISSUES. ACCORDINGLY, WE DO NOT SEE ANY MERIT IN THIS DEPARTMENTAL APPEAL. 12. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSE D. (ORDER PRONOUNCED IN THE COURT ON 21 ST MAY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21 ST MAY, 2014. VR/- 6 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.