AMIT KAUSHIK, Jaipur V. ITO, Alwar

ITA 45/JPR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99471 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 22-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA
• Keywords: Non-deduction of tax; Assessment record

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA- @ ITA NO. 45/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2009-10 AMIT KAUSHIK, P/O- M/S VINAYAK TYERS, 2-GA-3, MANU MARG, OPP. BUS STAND, ALWAR. CUKE VS. INCOME TAX OFFICER, WARD 2(1), ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ARGPK 0258 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI RAJ MEHRA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 21/10/2015 MN?KKS'K .KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 06/11/2015 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M.: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 13/11/2013 PASSED BY THE LD CIT(A), ALWAR FOR A.Y. 20 09-10. THE RESPECTIVE GROUNDS OF APPEAL ARE REPRODUCED AS UNDE R:- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CO NFIRMING THE ACTION OF THE A.O. IN MAKING DISALLOWANCE OF RS. 10,88,715/- AND RS. 1,37,690/- U/S 40(A)(IA) ON ACC OUNT OF NON-DEDUCTION OF TAX AT SOURCE U/S 194H AND 194I RESPECTIVELY. ITA 45/JP/2014_ AMIT KAUSHIK VS. ITO 2 2. THE LD CIT(A) HAS ERRED ON FACTS AND IN LAW IN CON FIRMING ADDITION OF RS. 70,538/- MADE ON ACCOUNT OF UNDERSTATEMENT OF CONTRACTUAL RECEIPTS. HE HAS FURT HER ERRED IN CONFIRMING THE ADDITION OF THE ENTIRE RECE IPTS INSTEAD OF APPLYING THE NET PROFIT RATE ON SUCH REC EIPT. 3. THE LD CIT(A) HAS ERRED ON FACTS AND IN LAW IN CON FIRMING DISALLOWANCE OF RS. 50,000/- OUT OF RS. 1,22,500/- M ADE BY THE A.O. ON ACCOUNT OF LABOUR EXPENSES. 2. REGARDING 1 ST GROUND OF APPEAL, THE FACTS AS OBSERVED FROM THE ASSESSMENT RECORDS IS THAT THE ASSESSEE HAS DEBITED A SUM OF RS. 11,31,430/- UNDER THE HEAD COMMISSION OUT OF WHICH PAYMENT OF RS. 10,88,715/- COMES UNDER THE PURVIEW OF SECTION 194H OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). FURTHER, THE ASSES SEE HAS DEBITED A SUM OF RS. 1,37,690 UNDER THE HEAD RENT, WHICH COM ES UNDER THE PURVIEW OF SECTION 194I OF THE ACT. SINCE THE ASSESS EE HAS NOT DEDUCTED TDS ON THE SAID AMOUNTS, THE ASSESSING OFFICER MADE DISALLOWANCE OF RS. 10,88,715/- AND RS. 1,37,690/- U/S 40(A)(IA) OF THE ACT. 3. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFOR E THE LD CIT(A) AND SUBMITTED THAT SINCE NO AMOUNT REMAINS PAYABLE ON ACCOUNT OF COMMISSION AND RENT AT THE END OF THE PREVIOUS YEAR , NO DISALLOWANCE IS CALLED FOR IN VIEW OF THE DECISION OF SPECIAL BENCH OF ITAT IN CASE OF ITA 45/JP/2014_ AMIT KAUSHIK VS. ITO 3 MERILYN SHIPPING & TRANSPORT VS. ACIT 16 ITR (TRIB) 1. THE LD CIT(A), HOWEVER, CONFIRMED THE DISALLOWANCE BY RELYING ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. S IKANDAR KHAN N. TUNWAR 357 ITR 312. 4. AT THE OUTSET, THE LD AR OF THE ASSESSEE HAS SUB MITTED THAT THE ISSUE OF APPLICABILITY OF SECTION 40(A)(IA) ON THE AMOUNT, WHICH IS PAID DURING THE YEAR AND NOT OUTSTANDING AT THE END OF THE PREVIOUS YEAR, HAS BEEN CONSISTENTLY DECIDED BY THE COORDINATE BEN CH OF JAIPUR BY FOLLOWING THE DECISION OF SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORT VS. ACIT (SUPRA). IN THIS REGARD, THE REFER ENCE WAS DRAWN TO THE CASE OF ACIT VS. GIRDHARI LAL BARGOTI IN ITA NO. 757/JP/2012 A.Y. 2009-10 VIDE ORDER DATED 10/04/2015. THE FINDING OF THE HONBLE BENCH IS REPRODUCED AS UNDER:- 11. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. ON IS SUE OF AMOUNT ALREADY PAID DURING THE YEAR OR AMOUNT SHOWN PAYABL E AS ON 31 ST MARCH OF EVERY YEAR, THE VARIOUS COURTS HAVE DIFFE RENT VIEWS I.E. IN FAVOUR OF THE ASSESSEE AND AGAINST THE ASSESSEE. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. VEGETABLE PROD UCTS LTD. (SUPRA) HAS HELD THAT WHEN THERE ARE TWO VIEWS ON A N ISSUE, THE VIEW IN FAVOUR OF THE ASSESSEE HAS TO BE PREFERRED. THEREFORE, WE ITA 45/JP/2014_ AMIT KAUSHIK VS. ITO 4 CONFIRM THE ORDER OF THE LD. CIT(A). FURTHER THE RE CIPIENT ARE NBFC, THEREFORE, NOT POSSIBLE TO NOT BE ASSESSED TO TAX, THESE PAYMENTS WERE RELATED FOR A.Y. 2009-10 AND RETURN FO R A.Y. 2009- 10 ALREADY MIGHT HAVE BEEN FILED BY THESE NBFC BY I NCLUDING THESE INTERESTS RECEIPTS AS THEIR INCOME. THEREFORE , WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD . CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. ON SP ECIFIC QUERY FROM THE BENCH, IT WAS INFORMED THAT THERE IS NO DECISION OF THE HON'BLE RAJASTHAN HIGH COURT ON THE SUBJECT MATTER. FURTHER , IT IS NOTED THAT THE DIFFERENT HON'BLE HIGH COURTS HAVE TAKEN DIFFERENT VIEW IN THE MATTER AND THE COORDINATE BENCH IN THE CASE OF ACIT VS. GI RDHARI LAL BARGOTI (SUPRA) HAS FOLLOWED THE VIEW FAVOURABLE TO THE ASSES SEE. THEREFORE BY RESPECTFULLY FOLLOWING THE COORDINATE BENCH DECISION IN THE CASE OF ACIT VS. GIRDHARI LAL BARGOTI (SUPRA), WE ARE OF THE VIEW THAT THE DISALLOWANCE OF COMMISSION AND RENT U/S 40(A)(IA) OF THE ACT DOE S NOT STAND AS THE SAME HAS BEEN DULY PAID DURING THE YEAR AND IT IS N OT OUTSTANDING AT THE YEAR END. THEREFORE, THIS GROUND OF ASSESSEES A PPEAL IS ALLOWED. 6. REGARDING 2 ND GROUND OF APPEAL, IT RELATES TO THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN RELATION TO COMPUT ATION OF GROSS ITA 45/JP/2014_ AMIT KAUSHIK VS. ITO 5 RECEIPTS IN THE HANDS OF THE ASSESSEE. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD DISCLOSED GROSS RECEIPT FROM ITS CONTRACT WORK AMOUNTING TO RS. 15,65,397/- DURING THE YEAR. THE LD ASSESSING OFFICER OBSERVED THAT THE GROSS RECEIPT SHOWN BY THE ASSESSE E DOES NOT TALLY WITH THE GROSS AMOUNT OF RS. 16,17,039/- SHOWN IN T HE TDS CERTIFICATE AND ALSO AS PER THE COPY OF LEDGER ACCOUNT OF JVVNL THE GROSS RECEIPT ARE SHOWN AS RS. 17,30,289/- (INCLUDING SECURITY DE POSIT). THE LD ASSESSING OFFICER EXCLUDED THE SECURITY DEPOSIT OF RS. 94,357/- FROM THE GROSS RECEIPT OF RS. 17,30,289/- AND HELD THAT RS. 70,538/- HAS NOT BEEN REPORTED BY THE ASSESSEE (RS. 16,35,932 RS. 15,65,397) AND ADDED THE SAME IN THE HANDS OF THE ASSESSEE. 7. THE LD CIT(A) CONFIRMED THE ADDITION HOLDING THAT THE APPELLANT IS UNDER LEGAL OBLIGATION TO DISCLOSE THE CORRECT CONT RACTUAL RECEIPTS AS PER THE TDS CERTIFICATE FOR WHICH THE CORRESPONDING TDS C REDIT IS CLAIMED IN THE RETURN OF INCOME. DURING THE COURSE OF HEARING THE LD AR SUBMITTED THAT THE GROSS RECEIPTS AS PER TDS CERTIFICATE IS R S. 16,17,039/- AND IF THE SECURITY DEPOSIT OF RS. 94,357/- IS DEDUCTED, T HE NET RECEIPT COMES TO RS. 15,22,682/-, WHICH IS LESS THAN THE INCOME FR OM FABRICATION WORK, WHICH HAS BEEN DULY REPORTED IN THE RETURN OF INCOME AT RS.15,65,397/-. ITA 45/JP/2014_ AMIT KAUSHIK VS. ITO 6 THE LD AR SUBMITTED THAT THE ASSESSING OFFICER HAS T AKEN THE RECEIPT AS PER LEDGER ACCOUNT OF JVVNL WITHOUT POINTING OUT A S PECIFIC ENTRY IN SUCH LEDGER ACCOUNT, WHICH IS NOT ACCOUNTED FOR IN T HE BOOKS OF ACCOUNT OF THE ASSESSEE. 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. FIRST LY THE APPELLANT HAS DEMONSTRATED CLEARLY THAT THE NET RECEIPT AS PER TDS CERTIFICATE AMOUNTING TO RS. 15,22,682/- IS LOWER THAN THE AMOUN T ALREADY OFFERED IN THE RETURN OF INCOME AT RS. 15,65,397/-. SECONDL Y, THE TRANSACTIONS AS REPORTED IN THE TDS CERTIFICATE CANNOT BE TAKEN AS A SOLE BASIS FOR DETERMINING THE TAXABLE INCOME IN THE HANDS OF THE ASSESSEE. THE TDS CERTIFICATES CAN AT BEST HAVE A PERSUASIVE VALUE TO DETERMINE THE CORRECT CONTRACTUAL RECEIPT IN THE HANDS OF THE ASSESSEE BU T THE SAME CANNOT BE HELD TO BE SOLE BASIS FOR DETERMINING THE CONTRACTU AL RECEIPTS IN THE HANDS OF THE ASSESSEE ESPECIALLY IN THE INSTANT CAS E WHERE THE ASSESSEE HAS DEMONSTRATED AND RECONCILED THE TRANSACTIONS AS PER THE TDS CERTIFICATE AS WELL AS THE TRANSACTIONS AS REPORTED IN ITS BOOKS OF ACCOUNT.. IN LIGHT OF ABOVE THE ADDITION OF RS. 70, 538/- DOES NOT STAND AND THE SAME IS DELETED. HENCE, THIS GROUND OF APPE AL IS ALLOWED. ITA 45/JP/2014_ AMIT KAUSHIK VS. ITO 7 9. REGARDING 3 RD GROUND OF APPEAL, THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CLAIMED LABOUR EXPENSES OF RS. 12 ,25,000/-. THE ASSESSING OFFICER DISALLOWED 10% OF THESE EXPENSES A MOUNTING TO RS. 1,22,500/-, WHICH WAS FURTHER REDUCED TO RS. 50,000/ - BY THE LD CIT(A). THERE IS NO FINDING OF THE ASSESSING OFFICER OR LD C IT(A) THAT THESE EXPENSES ARE NOT GENUINE EXPENSES OR IN THE NATURE OF BOGUS EXPENSES. IN LIGHT OF THAT, THE AD HOC DISALLOWANCE AS DONE BY THE LD ASSESSING OFFICER AND PARTLY CONFIRMED BY THE LD CIT(A) TO THE EXTENT OF RS. 50,000/- IS DELETED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/11/2015. SD/- SD/- VKJ-IH-RKSYKUH FOE FLAG ;KNO (R.P.TOLANI) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 06 TH NOVEMBER, 2015 * RANJAN VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI AMIT KAUSHIK, ALWAR. 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD 2(1), ALWAR. 3. VK;DJ VK;QDR@ CIT ITA 45/JP/2014_ AMIT KAUSHIK VS. ITO 8 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 45/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR