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

ITA 4713/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2715 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 19-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K MUTSADDI
• Keywords: Retrospective amendment; Non-deduction of tax
• Section: 194C

Judgement Text

, , SMC , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, SMC MUMBAI , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO.4713/MUM/2015 ASSESSMENT YEAR: 2009-10 INCOME TAX OFFICER-26(1)(1) ROOM NO. 505, C-10 5 TH FLOOR, B.K.C. BANDRA (E), MUMBAI 400051 / VS. M/S. ALL INDIA ROADWAYS UNIT NO. 3, BLDG. NO. B-2 WADALA TRUCK TERMINAL WADALA, MUMBAI 400037 ( / REVENUE) ( /ASSESSEE) PAN. NO. AANFA6118Q ! ' #$ / DATE OF HEARING : 15/07/2016 ' #$ / DATE OF ORDER: 15/07/2016 / REVENUE BY SHRI RAJESH OJHA, JCIT / ASSESSEE BY SHRI S.K. MUTSADDI ITA NO.4713/MUM/2015 M/S. ALL INDIA ROADWAYS 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATE D 09/06/2015 OF LD. COMMISSIONER OF INCOME TAX, MUMBA I DELETING THE ADDITION OF RS.63,03,900/- MADE ON ACC OUNT OF DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) AS THE ASSESSEE FAILED T O COMPLY WITH THE PROVISIONS OF SECTION 194C IN RESPECT OF P AYMENTS MADE TO M/S. RAJ CARRIERS IGNORING SECOND PROVISO T O SECTION INSERTED BY FINANCE ACT, 2001 W.E.F. 01.04.2013. 2. DURING HEARING THE LEARNED D.R. DEFENDED THE ADD ITION MADE BY THE LEARNED ASSESSING OFFICER BY CONTENDING THAT SINCE THE ASSESSEE HAS NOT COMPLIED WITH THE PROVIS IONS OF SECTION 194C OF THE ACT, THEREFORE, WHILE GRANTING RELIEF TO THE ASSESSEE THE LEARNED CIT(A) IGNORED SECOND PROV ISO TO SECTION 40(A)(IA), INSERTED BY THE FINANCE ACT, 201 2 W.E.F. 01.04.2013. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE SHRI S.K. MUSTADDI, DEFENDED THE DECISION OF THE LEARNED CIT(A) BY EXPLAINING THAT THE ASSESSEE DULY PLACED A CERTIFICATE FROM THE CHARTERED ACCOUNTANT CERTIFYIN G THAT SHRI IQBAL SINGH ARORA OFFERED THE ENTIRE PAYMENT O F RS.36,03,900/- FROM ALL INDIA ROADWAYS FOR TAXATION IN HIS RETURN FILED ON 30.09.2009 AND PAID TAXES THEREON, THEREFORE, THERE IS NO LOSS TO THE REVENUE. RELIANC E WAS PLACED UPON THE DECISION OF THE TRIBUNAL IN THE CAS E OF SMT. RADHIKA KHURANA (ITA NO. 2081/MUM/2012 ORDER DATED 12.02.2015), RAJIV KUMAR AGARWAL VS. ADDL. CIT (ITA NO. 337/AGRA/2013), ANANDA MARAKALA (ITA NO. 1584/BANG/ ITA NO.4713/MUM/2015 M/S. ALL INDIA ROADWAYS 3 2012 ORDER DATED 13.09.2013) (48 TAXMANN.COM 402), G. SHANKAR (ITA NO. 1832/BANG/2013 ORDER DATED 10.10.2014), BALLABH DAS AGARWAL VS. ITO, VIRGIN CR EATIONS (GA NO. 3200/2011) (KOKLKATTA) ORDER DATED 23.11.20 11. 3. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIE F ARE THAT THE ASSESSEE, A PARTNERSHIP FIRM, IS ENGAGED IN THE BUSINESS OF TRANSPORTATION CONTRACT, HAVING TWO PARTNERS NAM ELY MR. IQBALSINGH ARORA, AND JAGAJIT KAUR ARORA FILED RETU RN ON 31.03.2011 DECLARING INCOME OF RS.2,16,330/- WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUE NTLY THE ASSESSMENT WAS REOPENED UNDER SECTION 148/147 OF TH E ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASS ESSEE FILED MONTH-WISE DETAILS OF CRANE HIRE CHARGES AND ALSO FILED PARTY-WISE DETAILS THEREOF. THE LEARNED ASSESSING O FFICER ASKED THE ASSESSEE TO EXPLAIN PARTY-WISE TRUCK CHAR GES PAID AND TDS DEDUCTED THEREON. THE ASSESSEE THROUGH ITS WRITTEN SUBMISSIONS DATED 26.02.2014 EXPLAINED THE POSITION AND RELIED UPON CERTAIN DECISIONS. THE LEARNED ASSESSIN G OFFICER MADE DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE AC T. 3.1 ON APPEAL BEFORE THE LEARNED CIT(A) THE SUBMISS IONS OF THE ASSESSEE WERE CONSIDERED AND IT WAS FOUND TH AT SINCE THE PAYEE HAS PAID THE TAXES ON THE PAYMENTS RECEIV ED FROM THE ASSESSEE FIRM THEREFORE NO DISALLOWANCE CAN BE MADE UNDER SECTION 40(A)(IA) OF THE ACT IN RESPECT OF PA YMENTS PAID TO RAJ CARRIERS WITHOUT DEDUCTING THE TAX THER EON. THE REVENUE IS AGGRIEVED AND IS IN APPEAL BEFORE THIS T RIBUNAL. ITA NO.4713/MUM/2015 M/S. ALL INDIA ROADWAYS 4 3.2 IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER , LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, UNDER THE FACTS AVAILAB LE ON RECORD THERE IS NO DISPUTE TO THE FACT THAT THE PAY EE PAID THE TAXES ON THE PAYMENTS RECEIVED FROM THE ASSESSE E FIRM ON THE PAYMENTS AMOUNTING TO RS.36,03,900/- PAID TO M/S. RAJ CARRIERS, THEREFORE, BROADLY I AM OF THE VIEW T HAT THERE IS NO LOSS TO THE REVENUE. MY VIEW FINDS SUPPORT FR OM THE DECISION IN THE CASE OF RAJIV AGARWAL 149 ITD 363, ITO VS. RATIKA KHURANA (ITA NO. 2481/MUM/2012) WHEREIN THE STAND OF THE REVENUE WAS REJECTED CONSIDERING SECON D PROVISO, INSERTED BY FINANCE ACT, 2012. SIMILARLY T HE KOLKATA BENCH IN THE CASE OF BALLABH DAS AGARWAL VS . ITO VIDE OR DATED 22.05.2015 HELD THAT INSERTION OF SEC OND PROVISO TO SECTION 40(A)(IA) IS CURATIVE IN NATURE WITH RETROSPECTIVE EFFECT. THE CLAIM OF THE ASSESSEE WAS DENIED BY THE LEARNED ASSESSING OFFICER BY SAYING THAT SEC TION 194C IS NOT APPLICABLE AND THE PROVISION OF SECTION 40(A)(IA) ARE APPLICABLE FOR NON-DEDUCTION OF TAX AT SOURCE A ND CONSEQUENT ADDITION WAS MADE. IT IS NOTED THAT IN A LATER JUDGEMENT THE HONBLE APEX COURT IN THE CASE OF HIN DUSTAN COCA COLA BREWERIES PVT. LTD. ALSO DISCUSSED CBDT C IRCULAR NO. 8 OF 2009 CONSIDERED VARIOUS ASPECTS AND HELD T HAT WHEN ASSESSEE COMPANIES PROVED THAT TAX HAS BEEN PA ID BY THE DEDUCTEE RECOVERY OF DEMAND CANNOT BE ENFORCED, SUPPORTS THE CASE OF THE ASSESSEE. THE AGRA BENCH I N THE ITA NO.4713/MUM/2015 M/S. ALL INDIA ROADWAYS 5 CASE OF RAJIV KUMAR AGARWAL (ITA NO. 337/AGRA/2013) HELD THAT INSERTION OF SECOND PROVISO TO SECTION 40(A)(I A) IS DECLARATORY AND CURATIVE IN NATURE AND HAS RETROSPE CTIVE EFFECT FROM 01.04.2005, BEING THE DATE FROM WHICH S UB- CLAUSE (IA) OF SECTION 40(A) WAS INSERTED BY THE FI NANCE (NO. 2) ACT, 2004. THE CASE OF THE ASSESSEE IS FURTHER F ORTIFIED BY THE DECISION IN ANANDA MARAKALA (ITA NO. 1584/BANG/ 2012 ORDER DATED 13.09.2013 48 TAXMANN. COM 402). CONSIDERING THE TOTALITY OF FACTS I FIND NO INFIRMI TY IN THE CONCLUSION OF THE LEARNED CIT(A). THEREFORE, HIS ST AND IS AFFIRMED RESULTING TO DISMISSAL OF APPEAL OF THE RE VENUE. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE THE LEARNED D.R. AND ASSESSEES COUNSEL AT THE CONCLUSION OF THE HEARING ON 15/07/2016. SD/- (JOGINDER SINGH) ! /JUDICIAL MEMBER ! MUMBAI; & DATED : 15/07/2016 AA? P.S / /. . . ' #$%&%'# / COPY OF THE ORDER FORWARDED TO : 1. ()*+, / THE APPELLANT (RESPECTIVE ASSESSEE) 2. -.+, / THE RESPONDENT. 3. / / 0 ( ()* ) / THE CIT-21, MUMBAI. 4. / / 0 / CIT(A)-38, MUMBAI, 5. 23 - , / ()*# (4 , ! / DR, SMC BENCH, ITAT, MUMBAI 6. 5 6!* / GUARD FILE. / BY ORDER, .2) - //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ! / ITAT, MUMBAI