DCIT PALGHAR CIR , PALGHAR, PALGHAR V. GURMEJ SINGH SANDHU, THANE

ITA 4387/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79048 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 10-06-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 28-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRIKANT NAMDEO
• Section: 143(3); 194C; 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G B ENCH, MUMBAI . , !'# $ $ $ $ , %& '()* , %+ ,- % # BEFORE SHRI D.MANMOHAN, VICE PRESIDENT AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ I.T.A. NO.4387/MUM/2012 ( . . . . / ASSESSMENT YEAR :2005-06 THE ACIT, PALGHAR CIRCLE, AAYAKAR BHAVAN, BIDCO ROAD, PALGHAR / VS. SHRI GURMEJ SINGH SANDHU, PROP. M/S. SWAGAT ROADLINES, DHODI POOJA AWADH NAGAR, BOISAR, PALGHAR -/ %+ ./ 0 ./ PAN/GIR NO. : AOPPS 8831J ( /1 / APPELLANT ) .. ( 23/1 / RESPONDENT ) /1 4 % / APPELLANT BY: SHRI SRIKANT NAMDEO 23/1 5 4 % / RESPONDENT BY: NONE 5 6+ / DATE OF HEARING :10.06.2014 7. 5 6+ / DATE OF PRONOUNCEMENT:10.06.2014 ,%8 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-II,THANE, DT.30.03.2012 PERTAINING TO A.Y. 2005-06. 2. THE SUBSTANTIVE GRIEVANCE OF THE REVENUE READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN THE LAW, THE CIT(A) ERRED IN DELETING THE ADDITI ON ITA NO. 4387/M/2012 2 MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF TRANSPORT CHARGES ON WHICH NO TDS DEDUCTION WAS MADE U/S. 40(A)(IA) OF I.T. ACT OF RS. 83,99,304/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN THE LAW, THE CIT(A) ERRED IN NOT APPRECIATING TH E ACT OF THE AO THAT THE ASSESSEE HAD NOT DEDUCTED TA X AT SOURCE ON PAYMENT OF TRANSPORT CHARGES AS REQUIRED UNDER THE PROVISIONS OF SEC. 194C OF THE I.T. ACT, 1961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN THE LAW, THE CIT(A) ERRED IN TREATING THE ASSESS EE WAS A CONTRACTOR. IN FACT, THE ASSESSEE WAS A SUBCONTRACTOR, HENCE THE PROVISIONS OF SEC. 194C IS APPLICABLE ON THE ASSESSEE. 3. THE ASSESSEE IS IN THE BUSINESS OF TRANSPORTATIO N SERVICES. THE RETURN FOR THE YEAR UNDER CONSIDERATION WAS FILED O N 29.10.2005 DECLARING TOTAL INCOME AT RS. 9,29,130/-. THE ASSESSMENT U/S . 143(3) WAS COMPLETED ON 19.12.2007 AT AN ASSESSED FIGURE OF RS. 9,78,380 /-. THE ASSESSMENT WAS REOPENED BY ISSUE OF NOTICE U/S. 148 OF THE AC T, THEREAFTER STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. 3.1. DURING THE COURSE OF THE ASSESSMENT PROCEEDING S, IT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE THAT HE HAS MADE PAYMEN TS TO VARIOUS PARTIES WITHOUT DEDUCTING TAX AT SOURCE. THE ASSESSEE WAS ASKED TO JUSTIFY HIS CLAIM. THE ASSESSEE STRONGLY CONTENDED THAT THE PA YMENTS MADE TO VARIOUS PARTIES WERE SQUARELY COVERED BY CBDTS CIR CULAR NO. 715 DT. 8.8.1995 WHEREIN IT HAS BEEN MENTIONED THAT IN CASE OF PAYMENTS TO TRANSPORTER, EACH GOODS RECEIVED NOTE OR LORRY RECE IPTS SHALL BE TREATED AS SEPARATE CONTRACTS IF GOODS ARE TRANSPORTED AT VARI OUS TIME EVEN THOUGH PAYMENT FOR GOODS RECEIVED ARE MADE UNDER SAME BILL . ITA NO. 4387/M/2012 3 3.2. IT WAS FURTHER EXPLAINED THAT IN LINE WITH THE AFOREMENTIONED CIRCULAR, THE PAYMENTS WERE OUTSIDE THE PURVIEW OF SEC. 194C AND HENCE NO LIABILITY FOR TDS EXIST. IN SO FAR AS PAYMENT T O MISCELLANEOUS PARTY WAS CONCERNED, THE ASSESSEE EXPLAINED THAT THESE PA YMENTS ARE MADE TO VARIOUS SMALL TRUCK OWNERS AND THE PAYMENT IS NOT M ORE THAN RS. 50,000/- . THE SUBMISSIONS OF THE ASSESSEE WERE NOT ACCEPTE D BY THE AO WHO WAS OF THE FIRM BELIEF THAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE AS PER THE PROVISIONS OF SEC. 194C OF THE ACT AND ACCO RDINGLY DISALLOWED TRANSPORT CHARGES AMOUNTING TO RS. 83,99,304/-/-. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) AND REITERATED HIS STAND THAT PROVISIONS OF SEC. 194C W ERE NOT APPLICABLE ON THE FACTS OF THE CASE. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS AND THE CIRCULAR OF THE CBDT, THE LD. CIT(A) WAS OF THE OPINION THAT THE ASSESSEE WAS NOT LIABLE FOR TDS ON THE TRANSPORTATI ON CHARGES PAID DURING THE YEAR UNDER CONSIDERATION AS THE PROVISIONS OF S EC. 194C WERE NOT APPLICABLE ON THE ASSESSEE AND DIRECTED THE AO TO D ELETE THE ADDITION OF RS. 83,99,304/-. 5. AGGRIEVED BY THIS, REVENUE IS BEFORE US. 6. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUP PORTED THE FINDINGS OF THE AO. 7. NO ONE APPEARED ON BEHALF OF THE ASSESSEE. WE H AVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND CAREFULLY PERUSED T HE ORDERS OF THE LOWER AUTHORITIES. 8. THE ASSESSEE IS IN THE LINE OF TRANSPORTATION SE RVICES. SOMETIMES THE ASSESSEE HIRED THE TRUCKS AND LORRIES OF OTHERS FOR THE TRANSPORTATION OF ITA NO. 4387/M/2012 4 THE CONSIGNMENT BOOKED BY IT. IT IS SEEN THAT THE ASSESSEE HAS SIMPLY HIRED THE LORRY AND TRUCK TO TRANSPORT HIS CONSIGNM ENT UNDER ITS OWN CONTROL AND SUPERVISION. THE MOVEMENT OF TRUCKS AN D LORRIES ARE GOVERNED BY THE ASSESSEE HIMSELF AND NOT THE TRUCK OWNERS. THE REVENUE HAS NOT MADE OUT A CASE THAT THE ASSESSEE HAS ENGAG ED OR HIRED THE TRUCK FOR TRANSPORTATION OF THE CONSIGNMENT BOOKED BY IT UNDER THE CONTROL AND SUPERVISION OF TRUCK OWNERS WHICH MEANS THAT THE AS SESSEE HAS NOT ASSIGNED ANY WORK TO THE LORRY/TRUCK OWNERS AS PER THE PROVISIONS OF SEC. 194C. TDS AS PER PROVISIONS OF SEC. 194C IS REQUIR ED TO BE DEDUCTED WHEN THE PAYMENTS ARE MADE TO THE CONTRACTOR FOR CA RRYING OUT OF WORK BUT WHENEVER THE LORRIES AND TRUCKS ARE HIRED BY TH E ASSESSEE FOR ITS OWN USE IN ANY MANNER UNDER HIS OWN CONTROL AND SUPERVI SION, THE TDS IS NOT REQUIRED TO BE DEDUCTED ON PAYMENT MADE BY THE CONT RACTOR TO THE LORRY/TRUCK OWNERS. WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON 10.06.2014 . ,%8 5 . +% 9 :, ; 10.06.2014 5 < SD/- SD/- (D.MANMOHAN ) (N.K. BILLAIYA) !'# /VICE PRESIDENT %+ ,- / ACCOUNTANT MEMBER MUMBAI; :, DATED 10.6.2014 . . ./ RJ , SR. PS ITA NO. 4387/M/2012 5 ,%8 ,%8 ,%8 ,%8 5 55 5 26' 26' 26' 26' =%'.6 =%'.6 =%'.6 =%'.6 / COPY OF THE ORDER FORWARDED TO : 1. /1 / THE APPELLANT 2. 23/1 / THE RESPONDENT. 3. > ( ) / THE CIT(A)- 4. > / CIT 5. '?< 26 , , / DR, ITAT, MUMBAI 6. < @ / GUARD FILE. ,%8 ,%8 ,%8 ,%8 / BY ORDER, 3'6 26 //TRUE COPY// ! !! ! / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI