ITO, New Delhi V. M/s. Maple Logistics Pvt. Ltd., New Delhi

ITA 4231/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2683 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 02-05-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 01-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 4231/DEL/2014 AY: 20 10-11 INCOME TAX OFFICER, VS M/S MAPLE L OGISTICS PVT. LTD., WARD-6(2), 95, KHIRKI VILLAGE, NEW DELHI. MALVIYA NAGAR, NEW DELHI-110015 (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI RAJESH KUMAR, SR. DR ASSESSEE BY : SHRI N.K. BANSAL, CA ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT (A)-IX, NEW DELHI DATED 29.05.2014 FOR ASSESSME NT YEAR 2010-11. 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND IS ENGAGED IN THE BUSINESS OF TRANSPORTATION AND HAS A FLEET OF T RUCKS AND TRAILERS. DURING THE YEAR UNDER CONSIDERATION, THE RETURN OF INCOME WAS ORIGINALLY FILED DECLARING AN INCOME OF RS.18,29,686/- WHICH WAS SUBSEQUENTLY REVISED TO RS. 22,89,354/-. THE ASSESSEE, DURING THE RELEVANT PREVIOUS YEAR, HAD EN TERED INTO AN AGREEMENT WITH M/S WORLDS WINDOW INFRASTRUCTURE & L OGISTICS I.T.A. NO. 4231/DEL/2014 ASSESSMENT YEAR 2010-11 PRIVATE LIMITED (WWILPL). AS PER THE TERMS OF TH E AGREEMENT, THE ASSESSEE HAD GIVEN A REACH STACKER TO WWILPL FO R THE PURPOSES OF HANDLING OF CONTAINERS AT INLAND CONTAI NER DEPOT, LONI, ON HIRE BASIS AND IN LIEU OF THE SAME WWILPL HAD AGREED TO PAY A MONTHLY CONSIDERATION OF RS. 7 LAKHS PLUS THE APPLICABLE SERVICE TAX TO THE ASSESSEE. WWILPL HAD DULY DEDUC TED TAX AT SOURCE ON THE GROSS AMOUNT OF RS. 7 LAKHS. FURTHER , AS PER THE MUTUALLY AGREED TERMS, THE MONTHLY CONSIDERATION WA S INCLUSIVE OF THE OPERATIONAL COST OF DIESEL (UP TO 5200 LITER S) AND REPAIR & MAINTENANCE COST OF REACH STACKER WHICH WAS REQUIRE D TO BE BORNE BY THE ASSESSEE. ACCORDINGLY, THE MONTHLY PAYMENT OF RENT PAYABLE BY WWILPL TO THE ASSESSEE WAS PAID AFTER SE TTING OFF THE ABOVE EXPENSES INCURRED BY WWILPL ON BEHALF OF THE ASSESSEE. HOWEVER, THE ASSESSING OFFICER WAS OF THE OPINION T HAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE ON THE PAYMENTS MADE TOWARDS THE AFORESAID EXPENSES. THE ASSESSING OFFICER HELD THAT TAX WAS DEDUCTIBLE ON SUPPLY OF DIESEL, SUPPLY OF BUILDING MATERIAL FOR CAPITAL WORK IN PROGRESS. THE ASSESSI NG OFFICER PROCEEDED TO HOLD THAT AN AMOUNT OF RS. 48,82,857/- WAS LIABLE TO BE DISALLOWED U/S 194C OF THE INCOME TAX ACT AS TAX HAD NOT BEEN DEDUCTED AT SOURCE. ON THE ASSESSEE PREFERRIN G AN APPEAL I.T.A. NO. 4231/DEL/2014 ASSESSMENT YEAR 2010-11 BEFORE THE LD. CIT (A), THE LD. CIT (A) HELD THAT T HE IMPUGNED PAYMENTS WERE NOT MADE AGAINST ANY SERVICES RENDERE D AND DELETED THE ADDITION. NOW, THE DEPARTMENT HAS APPR OACHED THE ITAT AND HAS RAISED THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE:- 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE & IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWA NCE OF RS. 48,82,857/- MADE BY THE A.O. U/S 40(A)(IA) OF THE ACT. ? 2. THAT THE ORDER OF THE LD. CIT(A) IS ERRONEOUS A ND IS NOT TENABLE ON FACTS AND IN LAW. 3. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDI CE TO EACH OTHER. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR FORGO ANY GROUNDS(S) OF THE APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. 3. LD. SR. DR SUBMITTED THAT A PERUSAL OF THE AGREE MENT WITH WWILPL WOULD SHOW THAT THE SAID COMPANY HAD CA RRIED OUT SERVICES FOR THE ASSESSEE COMPANY AND HAD CHARGED T HE EXPENSES AND RAISED THE BILLS IN THE NAME OF THE ASSESSEE CO MPANY. IT WAS SUBMITTED THAT AFTER DEDUCTING THE SERVICE TAX OUT OF THE RENTAL INCOME, WWILPL HAD MADE THE BALANCE PAYMENT TO THE ASSESSEE COMPANY FOR THE HIRING CHARGES PAYABLE TO IT. THE LD. SR. DR PLACED RELIANCE ON THE CHART PRODUCED BY THE ASSESS ING OFFICER ON PAGES 3 AND 4 OF THE ASSESSMENT ORDER AND SUBMITTED THAT THE ASSESSING OFFICER HAD ANALYZED EACH AND EVERY PAYME NT BEFORE I.T.A. NO. 4231/DEL/2014 ASSESSMENT YEAR 2010-11 COMPUTING THE AMOUNT OF DISALLOWANCE AT RS. 48,82,8 57/-. LD. SR. DR ALSO PLACED RELIANCE ON THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF ASSOCIATED CEMENT COMPANY LTD. VS CIT REPORTED 201 ITR 435 (S.C.) AND SUBMITTED THAT THE HON'BLE APEX COURT HAD HELD THAT SECTION 194C HAD A WIDE IMPORT AND COVERED ANY WORK WHICH COULD BE CARRIED OUT THROUGH A CONTR ACTOR UNDER CONTRACT INCLUDING OBTAINING OF SUPPLY OF LABOUR UN DER THE CONTRACT WITH THE CONTRACTOR FOR CARRYING OUT ANY W ORK. HE ALSO POINTED OUT THAT AMOUNTS PERTAINING TO CAPITAL WORK IN PROGRESS, AS REFLECTED IN THE CHART PRODUCED BY THE ASSESSING OFFICER, WERE SPECIFICALLY COVERED UNDER THE TDS PROVISIONS. 4. IN RESPONSE, THE LD. AUTHORISED REPRESENTATIVE W HILE PLACING RELIANCE ON THE ORDER OF THE LD. CIT (A), V EHEMENTLY ARGUED THAT THE EXPENSES WERE ESSENTIALLY IN THE NA TURE OF REIMBURSEMENT AND, THEREFORE, NO TAX WAS DEDUCTIBLE ON THE SAME. LD. AUTHORISED REPRESENTATIVE RE-EMPHASIZED THE FACT THAT THE PAYMENTS MADE WERE NOT FOR SERVICES RENDER ED AS PAYMENT FOR REPAIRS AND MAINTENANCE, PURCHASE OF DI ESEL AND TRAVELLING EXPENSES WERE NOT SERVICES RENDERED. IT WAS ALSO SUBMITTED THAT THE DEPARTMENTS RELIANCE ON THE DEC ISION OF THE I.T.A. NO. 4231/DEL/2014 ASSESSMENT YEAR 2010-11 HON'BLE APEX COURT IN THE CASE OF ASSOCIATED CEMENT COMPANY LTD. VS CIT HAD BEEN MISPLACED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE RELEVANT MATERIAL ON RECORD. THE LD. CI T (A), WHILE ALLOWING THE APPEAL OF THE ASSESSEE HAS GIVEN A CAT EGORICAL FINDING IN PARA 5.3 OF HIS ORDER THAT THE DETAILS OF THE EX PENSES MENTIONED BY THE AO IN THE ASSESSMENT ORDER AND THE AGREEMENT BETWEEN THE WWILPL AND THE APPELLANT INDICATE THAT THE PAYMENTS ARE NOT AGAINST ANY SERVICES RENDERED. THE LD. CIT (A) HAS RECORDED A FINDING THAT THE EXPENSES ARE SUPPOR TED BY A WRITTEN AGREEMENT AGAINST WHICH THE AO WAS NOT ABLE TO BRING ANY MATERIAL FACTS AND FINDINGS TO ESTABLISH THAT T HE ASSESSEE AND RENDERED ANY OTHER SERVICES AS ASSUMED BY THE AO. T HE DEPARTMENT WAS NOT ABLE TO BRING ANY NEW FACT/EVIDE NCE ON RECORD TO VITIATE THE FINDINGS OF THE LD. CIT (A). THEREFORE, WE DO NOT FIND ANY REASON TO DIFFER FROM THE FACTUAL FIND ING OF THE LD. CIT (A) AND ACCORDINGLY DISMISS THE GROUNDS RAISED BY THE REVENUE. 6. IN THE FINAL RESULT, THE APPEAL STANDS DISMISSED . I.T.A. NO. 4231/DEL/2014 ASSESSMENT YEAR 2010-11 ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2017. SD/- SD/- (R.K. PANDA) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED: 31 ST JULY, 2017 GS COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT BY ORDER ASSTT. REGISTRAR