ITO 26(1)(1), MUMBAI V. ALL INDIA ROADWAYS, MUMBAI

ITA 4711/MUM/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0459 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 19-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Section: 143(3); 194C; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NOS.4711 & 4712/M/2015 ASSESSMENT YEARS: 2007-08 & 2008-09 INCOME TAX OFFICER 26(1)(1), R. NO.505, C-10, 5 TH FLOOR, B.K.C. BANDRA (E), MUMBAI - 51 VS. M/S. ALL INDIA ROADWAYS, UNIT NO.3, BUILDING NO.B- 2, WADALA TRUCK TERMINAL, WADALA, MUMBAI 400 037 PAN: AANFA 6118Q (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SHRI RAJESH KUMAR YADAV, D.R. DATE OF HEARING : 28.12.2017 DATE OF PRONOUNCEMENT : 31.01.2018 O R D E R PER D.T. GARASIA , JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 09.06.2015 OF THE COMMISSIONER OF I NCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO ASSESSMENT YEAR 2007-08. 2. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF TRANSPORTATION CONTRACTS. THE ASSESSEE FIRM HAS TWO PARTNERS VIZ. MR. IQBALSINGH ARORA AND MRS. JAGJIT KAUR ARORA SHARING PROFIT IN EQUAL PROPORTION. IN THIS CASE, ORIGINAL ASSESSMENT WAS C OMPLETED ON 02- ITA NOS.4711 & 4712/M/2015 M/S. ALL INDIA ROADWAYS 2 12-2009 U/S. 143(3) DETERMINING TOTAL INCOME AT RS. 85,82,070/- AFTER MAKING DISALLOWANCE U/S.40(A)(IA) OF RS. 84,36,119/ - AS THE ASSESSEE HAD NOT COMPLIED WITH THE PROVISIONS OF SECTION 194 C OF THE I.T. ACT, 1961. THE BREAKUP OF HIRING CHARGES OF RS. 84,36,11 9/- IS AS UNDER: SR. NO. PARTICULARS AMOUNT IN RS. (I) RAJ CARRIERS PROP. IQBAL SINGH ARORA PARTNER OF ALL INDIA ROADWAYS 74,11,564 (II) PARTIES FALLING WITHIN THRESHOLD LIMITS OF SEC. 194C 2,18,995 (III) OTHER PARTIES (NET OF DISCOUNT OF RS.7,502/-) 8,05,560 TOTAL 84,36,119 3. MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CIT (A) HAS ALLOWED THE APPEAL BY OBSERVING AS UNDER: 5.15 HAVE CONSIDERED THE ABOVE ARGUMENTS PUT FORTH BY TH E ASSESSEE. THE ABOVE AMENDMENTS HAVE COME AFTER MY PREDECESSOR'S O RDER DTD. 28.08.2010. THEREFORE, CONSIDERING THE FACTUAL MATRIX OF THE PR ESENT CASE AND RESPECTFULLY FOLLOWING THE DECISIONS GIVEN IN-THE ABOVE CITED CA SES ON THE SAME ISSUE, THE ISSUE IS DECIDED IN FAVOUR OF THE APPELLANT BY HOLD ING THAT THE AMENDMENT TO 2 ND PROVISO TO SECTION 40(A)(IA) IS APPLICABLE IN THE C ASE OF THE ASSESSEE AS THE SAME IS RETROSPECTIVE IN NATURE AND ALSO KEEPING IN TO CONSIDERATION THAT THE PAYEE HAS SHOWN THE HIRING CHARGES IN HIS RETURN OF INCOM E AND PAID TAXES ACCORDINGLY AND THEREFORE, NO DISALLOWANCE CAN BE MADE U/S.40(A )(IA) IN RESPECT OF THE PAYMENTS OF RS. 74,11,564/- PAID TO M/S. RAJ CARRIE RS, PROPRIETOR IQBAL SINGH ARORA. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE A.O. OF RS.74,11,564/- IS DIRECTED TO BE DELETED. THIS GROU ND IS ALLOWED. 5.16 AS REGARDS TO THE ADDITION MADE OF RS.2,18,995/- SI NCE THE AGGREGATE OF TRANSACTION WAS BELOW THE THRESHOLD LIMIT OF RS.50, 000/- AS PROVIDED U/S.194C OF THE INCOME TAX ACT, AS IS EVIDENT FROM PAGE 33 PLACED IN COMPILATION, ENTERED INTO WITH EACH PARTY DURING THE YEAR, THE P ROVISIONS FOR DISALLOWANCE U/S.40(A)(1A) OF THE INCOME TAX ACT ARE NOT APPLICA BLE. IN THESE CIRCUMSTANCES, THE DISALLOWANCE MADE OF RS.2,18,995/- IS DIRECTED TO B E DELETED. 5.17 AS REGARDS TO THE PAYMENTS MADE TO OTHER PARTIES OF RS. 8 4 05,560/- WITHOUT DEDUCTING TAX AT SOURCE, IT IS SEEN THAT THOUGH IT IS CLAIMED THAT THE PAYEES HAVE PAID THE TAXES ON THE HIRING CHARGES SO RECEIVED, B UT NO CERTIFICATE BY THE CHARTERED ACCOUNTANT IN THE PRESCRIBED FORMAT HAVE BEEN FURNI SHED WITH REGARD TO THE ABOVE SUM. THEREFORE, THIS CLAIM OF THE APPELLANT CA4)N6T BE ALLOWED. HENCE, THE ADDITION MADE BY THE A.O. OF RS. $OS,560/ IS CONFIRMED. ITA NOS.4711 & 4712/M/2015 M/S. ALL INDIA ROADWAYS 3 5.18 TO SUM UP, OUT OF THE TOTAL ADDITION OF RS. 84 ,36,119/-, ADDITION TO THE EXTN OF RS. 8,05,560/- IS CONFIRMED AND THE BALANCE ADDITIO N OF 6,30,559/- IS DIRECTED TO BE DELETED. 4. HAVING HEARD BOTH THE PARTIES, WE ARE OF THE VIE W THAT ISSUE IN CONTROVERSY IS COVERED BY THE DECISIONS OF VARIOUS TRIBUNALS AND WE FIND THAT THE LD. CIT(A) HAS VERIFIED THAT THE ASSE SSEE HAS MADE PAYMENT TO RAJ CARRIERS PROP. IQBAL SINGH ARORA PAR TNER OF ALL INDIA ROADWAYS AND LD. CIT(A) HAS VERIFIED THE CERTIFICAT E FROM CHARTERED ACCOUNTANT PLACED AT PAGE NO.51 TO 68 OF COMPILATIO N BEFORE THE LD. CIT(A) AND THEY HAVE SHOWN THIS INCOME IN HIS RETUR N OF INCOME. THEREFORE, LD. CIT(A) HAS ALLOWED. THEREFORE, IN O UR OPINION, THERE IS NO MERIT IN REVENUES APPEAL. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 31.01.2018. SD/- SD/- (N.K. PRADHAN) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 31.01.2018. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.