The ACIT, Bhopal V. Shri Hakimuddin, Bhopal

ITA 444/IND/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 6018 (ITAT-INDORE)
• Duration Of Justice: 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 03-08-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 04-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: A K RINWA
• Keywords: Business income
• Section: 194C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI B.R. KAUSHIK, ACCOUNTANT MEMBER ITA NO.444/IND/09 A.YS. 2006-07 ASSTT. COMMISSIONER OF INCOME TAX 1(1), BHOPAL APPELLANT VS HAKUMUDDIN BHOPAL PAN AAVPH -5940N RESPONDENT APPELLANT BY : SMT. APARNA KARAN, SR. DR RESPONDENT BY : SHRI A.K. RINWA, ADVOCATE O R D E R PER JOGINDER SINGH, JM THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 18.6.2009 WHEREIN FIRST GROUND RAISED IS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED C OMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DELETING THE ADDITION OF RS.46,500/- OUT OF THE TOTAL ADDITION OF RS.1,04,000/- MADE ON ACCOUN T OF LOW HOUSEHOLD WITHDRAWALS. THE CRUX OF ARGUMENTS ON BEHALF OF TH E REVENUE IS IN SUPPORT OF THE ASSESSMENT ORDER BY CONTENDING THAT NECESSARY DETAILS WERE NOT FURNISHED BY THE ASSESSEE AND IN THE PREVI OUS YEAR THE 2 ASSESSEE ONLY WITHDREW ONLY RS. 46,000/- TOWARDS HO USEHOLD EXPENSES. THE REPLY OF THE ASSESSEE DATED 28.11.2008 WAS DULY CONSIDERED BY THE LEARNED ASSESSING OFFICER AND THE ASSESSEE WAS MAIN TAINING A CAR AND THE TOTAL WITHDRAWALS FOR FOOD, HOUSING, HEALTH, CL OTHING, TRAVELLING, EDUCATION, ETC. ARE NOT SUFFICIENT FOR THE FAMILY. THE ADDITION WAS DEFENDED. ON THE OTHER HAND, THE SUBMISSION ON BE HALF OF THE ASSESSEE IS THAT THE TOTAL WITHDRAWALS MADE BY THE WIFE OF THE ASSESSEE WERE IGNORED, THEREFORE, THE ESTIMATION OF HOUSEHOL D EXPENSES AT RS.1,50,000/- WAS CHALLENGED. 2. ON PERUSAL OF RECORD AND AFTER HEARING THE RIVAL SUBMISSIONS, WE FIND THAT BEFORE THE LEARNED ASSESSING OFFICER A LSO IT WAS CLAIMED THAT THE ASSESSEE WAS STAYING ALONG WITH HIS WIFE, SMT. SALEHA MANO, AND WERE HAVING NO CHILDREN. THE ASSESSING OFFICER HAS MERELY PRESUMED THAT THE ASSESSEE MUST HAVE SPENT RS. 1,50,000/- TO WARDS HOUSEHOLD EXPENSE. AGAINST THE WITHDRAWAL OF RS. 46,000/- BY THE ASSESSEE THE DIFFERENCE OF RS. 1,04,000/- WAS TREATED AS UNEXPLA INED EXPENDITURE. HOWEVER, THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) ESTIMATED THE EXPENDITURE AT THE RATE OF RS.10,000/- TO BE RE ASONABLE AND SUSTAINED THE ADDITION OF RS.57,500/-. SINCE THERE IS NO CHILD TO THE ASSESSEE AT THE RELEVANT TIME, THEREFORE, THERE IS NO QUESTION OF EXPENSES ON EDUCATION. THE WITHDRAWALS OF THE WIFE WERE NOT CONSIDERED BY THE ASSESSING OFFICER. CONSEQUENTLY, THERE IS NO INFIRMITY 3 IN THE CONCLUSION DRAWN BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). THEREFORE, ON THIS GROUND, THERE IS NO M ERIT IN THE APPEAL OF THE REVENUE. THE SAME IS ACCORDINGLY DISMISSED. 3. THE NEXT GROUND PERTAINS TO ADDITION OF RS.10,29 ,920/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF NON-DEDUCTION OF TDS UNDER THE PROVISIONS OF SECTION 194C(2) OF THE ACT. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS IN SUPPORT TO THE ASSESSMENT ORDER WHEREAS THE LD. COUNSEL FOR THE ASSESSEE DEFE NDED THE IMPUGNED ORDER. IT WAS EXPLAINED THAT THE ASSESSEE WAS NOT UNDER OBLIGATION TO DEDUCT TDS ON TRANSPORT EXPENSES. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. THE OBJECTIONS RAISED BY THE ASSESSEE ARE BASED ON FOLLOWING GROUNDS :- (A) WHILE MAKING THE DISALLOWANCE OF RS. 10,29,920 /- U/S 40(IA), THE LEARNED ACIT HAS NOT SPECIFIED THAT UNDER WHICH SECTION OF CHAPTER XVII-B OF THE INCOME TAX ACT THE LEARNED ACIT HOLDS THE APPELLANT LIABLE TO DEDUCT TAX AT SO URCE ON TRANSPORTATION EXPENSES. CHAPTER XVII-B DOES NOT S PECIFY ANY TAX DEDUCTION ON SUCH EXPENSES. (B) IN THE ABSENCE OF MENTION OF THE SPECIFIC SECTI ON UNDER WHICH THE LEARNED ACIT HOLDS THE APPELLANT LIABLE T O DEDUCT TAX AT SOURCE ON TRANSPORTATION EXPENSES, THE APPELLAN T IS UNDER CONSTRAINT TO PUT FORWARD HIS DETAILED OBJECTIONS I N THIS REGARD. IT IS REQUESTED THAT THE LEARNED ACIT MAY BE CALLED UPON TO EXPLAIN HIS STAND AND THE APPELLANT MAY THEN BE PRO VIDED OPPORTUNITY TO PUT FORTH HIS OBJECTIONS. NO TRANSPORTATION CHARGES WERE EITHER CREDITED OR PAID TO THE ABOVE TRANSPORT AGENCIES. THE PAYMENTS WERE INS TEAD 4 MADE TO THE DIFFERENT VEHICLE OWNERS/DRIVERS AT BHO PAL. THE APPELLANT IS ENCLOSING DETAILS OF ALL TRANSPORT BIL TIES ALONG WITH THE VEHICLE REGISTRATION NUMBERS AND THE PAYMENTS MADE TO THE DIFFERENT VEHICLE OWNERS/DRIVERS. PHOTOCOPY F ALL TRANSPORT BILTIES ARE FILED. IN PARA 3.4 OF THE IMPUGNED ORDER, IT WAS CLAIMED T HAT PRIOR TO 1.6.2007, THE INDIVIDUAL AND HUF ASSESSEES WERE NOT COVERED U /S 194C OF THE ACT AND BY THE FINANCE ACT, 2007 WITH EFFECT FROM 1.6.2 007 SUCH TYPE OF ASSESSEES WERE COVERED, CONSEQUENTLY SECTION 194C I S APPLICABLE WHERE THE CONTRACT IS BETWEEN INDIVIDUAL/HUF AND A CONTRACTOR PROVIDED THE TOTAL SALES WHERE THE TOTAL TURNOVER FROM THE B USINESS OR PROFESSION EXCEEDS RS. 40 LACS/RS. 10 LACS RESPECTIVELY. THER EFORE, NO TAX IS TO BE DEDUCTED BY SUCH INDIVIDUAL/HUF U/S 194C OF THE ACT IF THE AMOUNT IS CREDITED OR PAID BEFORE 1.6.2007. IN VIEW OF THIS FACT, NO TAX IS TO BE DEDUCTED BY SUCH INDIVIDUAL/HUF U/S 194C OF THE ACT IF THE AMOUNT IS PAID OR CREDITED BEFORE 1.6.2007. ADMITTEDLY, THE ASSESSEE IS AN INDIVIDUAL AND THE FINANCIAL YEAR INVOLVED IS 2005- 06. CONSEQUENTLY, THERE IS NO INFIRMITY IN THE STAND OF THE LEARNED C OMMISSIONER OF INCOME TAX (APPEALS). THE SAME IS, THEREFORE, CONFIRMED. FINALLY, THE APPEAL OF THE REVENUE STANDS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 4 TH AUGUST, 2010. (B.R. KAUSHIK) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER 4TH AUGUST,2010 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE 5 *DN/