ITO, BEHROR V. THE TRUCK OPERATOR UNION, BEHROR

ITA 462/JPR/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7824 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 14-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS NEENA JEEPH
• Section: 194C

Judgement Text

ITA NO. 462/JP/2012 ITO, BEHROR VS. THE TRUCK OPERATOR UNION, BHEROR 1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 462/JP/2012 ASSESSMENT YEAR: 2008-09 PAN : AAAAT 7537 Q THE ITO VS. M/S. THE TRUCK OPERATOR UNION BEHROR, ALWAR N.H.8, NEAR CHORAHA, BEHROR, ALWAR (APPELLANT) (RESPONDENT) C.O. NO. 46/JP/2012 (ARISING OUT OF ITA NO. 462/JP/2012) ASSESSMENT YEAR: 2008-09 PAN : AAAAT 7537 Q M/S. THE TRUCK OPERATOR UNION VS. THE ITO N.H.8, NEAR CHORAHA, BEHROR, ALWAR BEHROR, ALWAR (APPELLANT) (RESPONDENT) DEPARTMENT BY: MRS. NEENA JEEPH ASSESSEE BY: SHRI P.C. PARWAL DATE OF HEARING: 13-10-2014 DATE OF PRONOUNCEMENT: 5-12-2014 ORDER PER R.P. TOLANI, JM THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A) , ALWAR DATED 14-03-2012 FOR THE ASSESSMENT YEAR 2008 -09. THE ASSESSEE HAS FILED THE CROSS OBJECTION. 2.1 THE REVENUE HAS RAISED FOLLOWING GROUND IN ITS APPEAL. ITA NO. 462/JP/2012 ITO, BEHROR VS. THE TRUCK OPERATOR UNION, BHEROR 2 THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN RESTRICTING THE TRADING ADDITION TO RS. 5.00 LACS OUT OF TOTAL ADDITION OF RS. 23,09,140/- MADE BY THE AO INVOKING SECTION 145(3) AND ESTIMATE D THE INCOME AT RS. 23,09,190/- BY APPLYING NET PROFIT RA TE OF 3% ON GROSS RECEIPTS OF RS. 7,69,71,175/-, 3.1 THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN IT S CROSS OBJECTION. 1. THE LD. CIT(A) HAS ERRED ON FACT AND IN LAW IN ASSESSING THE INCOME OF THE ASSESSEE AT RS. 5.00 LA CS AS AGAINST RS. 93,293/- DECLARED BY THE ASSESSEE. 2. THE LD. CIT(A) HAS ERRED ON FACT AND IN LAW IN ASSESSING THE MEMBERSHIP FEES OF RS. 1,85,500/- IN THE INCOME OF THE ASSESSEE IGNORING THAT THE SAME IS NO T TAXABLE ON THE PRINCIPLE OF MUTUALITY. 4.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AS CLAIMED TO BE A MUTUAL BENEFIT TRANSPORT UNION OF ITS MEMBERS. THE LD. COU NSEL FOR THE ASSESSEE CONTENDS THAT THE GROUNDS RAISED IN REVENUES APPEA L AND ASSESSEE'S CROSS OBJECTION ARE SAME. SIMILAR ADJUDICATION ON THIS IS SUE HAS BEEN MADE BY THIS BENCH OF ITAT IN ASSESSEE'S OWN CASE FOR THE ASSESS MENT YEAR 2007-08. ITAT ORDER WAS PASSED ON 16-05-2012 WHEREAS THE LD. CIT(A) PASSED THE IMPUGNED ORDER ON 14-03-2012 FOR THE ASSESSMENT YEA R 2008-09. THE AO MADE SIMILAR ADDITIONS WHICH WERE PARTLY ALLOWED BY THE LD. CIT(A) ON THE SAME FACTS AND CIRCUMSTANCES OF THE CASE. THIS BENC H OF ITAT AFTER CONSIDERING THE ARGUMENTS OF BOTH THE PARTIES DECID ED THE ISSUE IN QUESTION BY FOLLOWING OBSERVATIONS. ITA NO. 462/JP/2012 ITO, BEHROR VS. THE TRUCK OPERATOR UNION, BHEROR 3 2.9 WE HAVE HEARD BOTH THE PARTIES AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. AFTER CONSIDERING THE WRITTEN SUBMISSION OF THE ASSESSEE INCLUDING THE ORDER OF THE TRIBUNAL FOR TH E IMMEDIATELY PRECEDING YEAR, WE FIND THAT THERE IS NO SUBSTANCE IN THE APPEAL OF THE DEPARTMENT AND THE ASSESSEE DESERVES TO SUCCEED IN ITS GROUND IN PART. UNDISPUTEDLY ASSESSEE IS A TRANSPORT UNION CO NSTITUTED BY ITS MEMBERS' A MEMBERSHIP FEE IS PAID TO THE UNION. THE ASSESSEE IS CHARGING RS.20/-PER BILTY FROM THE TRUCK OWNERS WH O IN FACT TRANSPORTED THE MATERIALS. THE SAMPLE COPIES OF THE BILTIES ARE PLACED AT PAGES 2L TO 26 OF THE PAPER BOOK. THE BILTY CHA RGES ARE ACCOUNTED FOR IN THE PROFIT AND LOSS ACCOUNT . WHEN THE JOB IS PERFORMED BY THE TRUCK OWNERS, THE HIRER OF THE TRUCK EITHER ISSUES THE CHEQUE OF FREIGHT DIRECTLY IN FAVOUR OF THE TRUCK OWNER WITHOUT DEDUC TING THE TAX AT SOURCE OR IN FAVOUR OF THE ASSESSEE UNION AFTER DED UCTING THE TAX AT SOURCE U/S 194C OF THE ACT. THE AMOUNT SO RECEIVED BY THE UNION IS KEPT IN ITS BANK ACCOUNT AND AFTER WITHDRAWING FROM THE BANK, THE SAME IS DISBURSED TO THE CONCERNED TRUCK OWNER. THE SIMILAR ISSUE CAME UP BEFORE THE TRIBUNAL IN EARLIER YEAR. THE TR IBUNAL AFTER CONSIDERING THE DETAILED SUBMISSIONS SUSTAINED THE ADDITION OF RS. 3.00 LACS. WHILE DOING SO, THE TRIBUNAL OBSERVED TH AT THE ASSESSEE COULD NOT LEAD ANY EVIDENCE IN RESPECT OF THE CLAI M THAT TDS AMOUNT WHICH WAS DEDUCTED BY THE HIRER HAS BEEN REFUNDED T O THE TRUCK OWNER AND THEREFORE, THE TRIBUNAL SUSTAINED THE ADDITION OF RS. 3.00 LACS. HOWEVER, IN THE YEAR UNDER CONSIDERATION , THE LD. AR OF THE ASSESSEE HAS PRODUCED THE REGISTER SHOWING THAT THE TDS AMOU NT HAS BEEN REFUNDED TO THE RESPECTIVE TRUCK OWNER. WE FURTHER HOLD THAT FOR THE ASSESSMENT YEAR 2003-04 ALSO, THE TRIBUNAL HAS SUST AINED THE ADDITION OF RS. 3.00 LACS. IN VIEW OF THESE FACTS AND CIRCUM STANCES OF THE CASE AND ALSO THE PAST HISTORY OF THE CASE, WE ARE OF TH E VIEW THAT SINCE THE FACTS ARE SIMILAR, THEREFORE, WE DIRECT THE AO TO R ESTRICT THE ADDITION OF RS. 3.00 LACS AGAINST THE NET PROFIT RATE OF 3% DIR ECTED TO BE APPLIED BY THE LD. CIT(A) ON THIS ISSUE. IN THIS WAY, THE G ROUND OF THE DEPARTMENT FAILS AND THE GROUND OF THE C.O. OF THE ASSESSEE IS ALLOWED IN PART. 3.1 THE NEXT GROUND OF THE ASSESSEE IN ITS C.O. IS REGARDING ASSESSING THE MEMBERSHIP FEE OF RS. 1,05,600/- IN C OME IGNORING THAT THE SAME IS NOT TAXABLE ON THE PRINCIPLE OF MUTUALI TY. ITA NO. 462/JP/2012 ITO, BEHROR VS. THE TRUCK OPERATOR UNION, BHEROR 4 3.2 DURING THE COURSE OF HEARING, THE LD. COUNSEL F OR THE ASSESSEE STATED THAT THIS GROUND WAS VAS NOT TAKEN UP BEFORE THE AO OR BEFORE THE LD. CIT(A). HOWEVER, IN VIEW OF THE DECI SION OF HON'BLE APEX COURT IN THE CASE OF NTPC LTD. VS. CIT, 229 IT R 383, THE GROUND IS ADMISSIBLE SINCE IT IS A LEGAL GROUND. IT WAS FU RTHER SUBMITTED THAT THE ASSESSEE RECEIVED THE MEMBER SHIP FOREIGN EXCHA NGE FROM ITS MEMBERS AND THE FEE IS UTILIZED FOR THE PURPOSE OF FACILITATION WORK TO THE MEMBERS ONLY. THEREFORE, MUTUALITY CONCEPT HAS TO BE SEEN ON THE FACT OF THE PRESENT CASE. RELIANCE HAVE BEEN PLACED IN THE CASE OF CHELMSFORD CLUB VS. CIT,243ITR 89 (SC) AND IN THE C ASE OF SIND CO- OPERATIVE HOUSING SOCIETY VS. ITO , 26 DTR 149 (BOM .). 3.3 ON THE OTHER HAND, THE4 LD. DR OBJECTED IN ADMI TTING THE ADDITIONAL GROUND AS THE SAME WAS NEITHER TAKEN UP BEFORE THE AO NOR BEFORE THE LD. CIT(A) 3.4 AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSING THE MATERIALS AVAILABLE ON RECORD. WE FIN D THAT THIS IS A LEGAL GROUND AND CAN BE TAKEN UP AT ANY STAGE EITH ER BEFORE THE AO OR BEFORE THE LD. CIT(A) OR BEFORE THE TRIBUNAL. TH E HON'BLE APEX COURT IN THE CASE OF NTPC LTD. VS. CIT (SUPRA) HAS HELD THAT IF THE FACTS ARE NOT DISPUTED THEN THE LEGAL GROUND URGED SHOULD BE ACCEPTED. SINCE THERE IS NO DISPUTE THAT THE ASSESSEE RECEIVE D MEMBERSHIP FEE FROM ITS MEMBERS AND THE ASSESSEE WANTED TO CONSIDE R THESE RECEIPTS ON ACCOUNT OF MUTUALITY, THEREFORE, THE GROUND SO TAKEN UP IS ADMITTED. HOWEVER, SINCE IT WAS NOT URGED EITHER BE FORE THE AO OR BEFORE THE LD. CIT(A), THEREFORE, IN THE INTEREST O F JUSTICE, THE MATTER IS REMANDED BACK TO THE FILE OF THE LD. CIT(A) TO DISP OSE OFF THE SAME ON MERIT AFTER AFFORDING REASONABLE OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE. WE ORDER ACCORDINGLY. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AND THE C.O. OF THE ASSESSEE IS PARTLY ALLOWED AND PART LY ALLOWED FOR STATISTICAL PURPOSES. 4.2 THE LD. DR IS HEARD ON THIS ISSUE WHO RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. ITA NO. 462/JP/2012 ITO, BEHROR VS. THE TRUCK OPERATOR UNION, BHEROR 5 4.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BY RESPECTFULLY FOLLOWING THE ORDER DATED 16-05-2011 OF THIS BENCH OF ITAT IN ASSESSEE'S OWN CASE FOR THE A SSESSMENT YEAR 2007-08 (SUPRA), THE REVENUES APPEAL IS DISMISSED AND THE C.O. OF THE ASSESSEE IS PARTLY ALLOWED AND PARTLY ALLOWED FOR STATISTICAL P URPOSES AS INDICATED ABOVE. 5.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND THE C.O. OF THE ASSESSEE IS PARTLY ALLOWED AND PARTLY ALLOWED F OR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 05 -12-2014 SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 5 TH DEC. 2014 *MISHRA COPY FORWARDED TO:- 1. THE ITO, WARD- BEHROR, ALWAR 2. THE TURCK OPERATOR UNION, BEHROR 3. THE LD. CIT(A) 4. THE LD. CIT 5..THE LD. DR 6.THE GUARD FILE (IT NO. 462/JP/2012) BY ORDER AR ITAT, JAIPUR ITA NO. 462/JP/2012 ITO, BEHROR VS. THE TRUCK OPERATOR UNION, BHEROR 6