MOHTIMBAS ENGINEERING P.LTD, MUMBAI V. ITO 6(3)(4), MUMBAI

ITA 4776/MUM/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9176 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-10-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 19-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N PADMANABAN
• Assessee Lawyers: JITENDRA SINGH
• Section: 194C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 4776/MUM/2012 ( / ASSESSMENT YEAR : 2007 - 08 M/S. MOHTIMBAS ENGINEERING PVT. LTD. 26, SARANG STREET, MUMBAI - 400 003 / VS. THE ITO - 6(3)(4), MUMBAI ./ ./ PAN/GIR NO. : AAACM 0624R ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI JITENDRA SINGH / RESPONDENT BY : SHRI N. PADMANABAN / DATE OF HEARING : 23 . 0 3 .2015 / DATE OF PRONOUNCEMENT : 25 .03 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), MUMBAI DT. 27.4.2012 PERTAINING TO ASSESSMENT YEAR 2007 - 08. 2. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT HE IS NOT PRESSING GROUND NO. 1 AND THE SAME IS DISMISSED AS NOT PRESSED. 3. THE ONLY SURVIVING GRIEVANCE OF THE ASSESSEE RELATES TO THE DISALLOWANCE OF RS. 72,000/ - U/S. 40A(IA) OF THE ACT . ITA. NO. 4776/M/2012 2 4. THE ASSESSEE IS IN THE BUSINESS OF TRADING IN TOOLS, SPARE PARTS ETC. THE RETURN WAS SELECTED FOR THE SCRUTINY UNDER CASS. DURING THE COURSE OF THE SCRUTINY ASSESSMENT, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS PAID RS. 72,000/ - TO S HIRIN A LUCKNOWALA BEING MOTORCAR HIRE CHARGES. THE ASSESSEE WAS ASKED TO EXPLAIN WHY THESE PAYMENTS SHOULD NOT BE DISALLOWED U/S. 40A(IA) FOR NON DEDUCTION OF TAX AT SOURCE. ON RECEIVING NO REPLY FROM THE ASSESSEE, THE AO DISALLOWED THE SAME U/S. 40A(IA ) OF THE ACT. 5. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND VEHEMENTLY SUBMITT ED THAT HIRE CHARGES PAID ON ACCOUNT OF MOTORCAR DO NOT FALL WITHIN THE PROVISIONS OF SEC. 194C OF THE ACT , BUT COME WITHIN THE SEC. 194 I OF THE ACT , AS IT IS A PAYMENT AS RENT AND SINCE THE PROVISIONS OF SEC. 194I DID NOT ATTRACT ON PAYMENT OF RS. 72,000/ - , THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE. 5.1. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS MADE BY THE ASSESSEE, THE LD. CIT(A) OBSERVED THAT THE ASSES SEE HAS BEEN MAKING A FIXED PAYMENT OF AN AMOUNT TO THE PERSON FROM WHOM THE CAR HAS BEEN HIRED. NO DETAILS REGARDING MEETING OF EXPENSES IN RESPECT OF DIESEL/PETROL, REPAIRED AND INSURANCE HAS BEEN GIVEN BY THE ASSESSEE. UNDER THESE CIRCUMSTANCES, THE LD. CIT(A) DECLINED TO INTERFERE WITH THE FINDINGS OF THE AO AND CONFIRMED THE ADDITION. 6. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. 7. THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. IN SUPPORT OF HIS CLAIM, RELIANCE ITA. NO. 4776/M/2012 3 WAS PLACED ON THE DECISION OF THE TRIBUNAL, MUMBAI BENCH IN THE CASE OF ITO VS BHARAT SANCHAR NIGAM LTD., 45 TAXMANN. COM 124. 8. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE REVENUE AUTHORITIES. 9 . WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE DECISION OF THE TRIBUNAL RELIED UPON BY THE ASSESSEE. THE ONLY POINT OF DISPUTE IS WHETHER HIRE CHARGES PAID BY THE ASSESSEE FOR THE HIRE OF MOTOR CAR COME WITHIN THE DEFINITION OF REN T U/S. 194I OF THE ACT OR IT HAS TO BE CONSIDERED AS A CONTRACT WITHIN THE PROVISIONS OF SEC. 194C OF THE ACT. 9.1. THE TRIBUNAL MUMBAI BENCH IN THE CASE OF BHARAT SANCHAR NIGAM LTD (SUPRA) HAS HELD THAT VEHICLE OR MOTORCAR COME WITHIN THE DEFINITION OF PLANT AND MACHINERY USED U/S. 194I OF THE ACT, THEREFORE, ARRANGEMENT FOR PROVIDING VEHICLE TO ASSESSEES PERSONNEL F OR THEIR WORK WOULD STAND TO BE COVERED U/S. 194I OF THE ACT. RESPECTFULLY FOLLOWING THE DECISION OF THE CO ORDINATE BENCH, SIMILAR SET OF FACTS, WE SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION OF RS. 72,000.0. 10. I N THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. OR DER PRONOUNCED IN THE OPEN COURT ON 25 TH MARCH, 2015 SD/ - SD/ - ( VIJAY PAL RAO ) (N.K. BILLAIYA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 25 TH MARCH, 2015 . . ./ RJ , SR. PS ITA. NO. 4776/M/2012 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI