The DCIT, Circle-1(1), Guntur V. M/s Meramchand Nemichand, Guntur

ITA 487/VIZ/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50151 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-04-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 13-10-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SASMAL
• Keywords: Non-deduction of tax
• Section: 194C

Judgement Text

ITA NO 487 OF 09 MERAMCHAND NEMICHAND, GUNTUR PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.487/VIZAG/2009 ASSESSMENT YEAR:2006-07 DY.COMMISSIONER OF INCOME TAX CIRCLE-1(1) GUNTUR VS. MERAMCHAND NEMICHAND, GUNTUR (APPELLANT) (RESPONDENT) PAN NO:AABFN 7853 M APPELLANT BY: SHRI B. SASMAL, DR RESPONDENT BY: NONE ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE O RDER DATED 28.7.2009 PASSED BY LD CIT(A), GUNTUR AND IT RELATE S TO THE ASSESSMENT YEAR 2006-07. THE REVENUE IS CHALLENGING THE DECIS ION OF LD CIT(A) IN DELETING THE ADDITION OF RS.9,57,683/- MADE BY THE ASSESSING OFFICER U/S 40(A)(IA) OF THE ACT FOR NON-DEDUCTION OF TAX AT SO URCE AS PER THE PROVISIONS OF SECTION 194C OF THE ACT. THE APPEAL IS BARRED B Y LIMITATION BY 2 DAYS. THE REVENUE HAS MOVED A PETITION FOR CONDONING THE DELAY WHERE IN IT IS STATED THAT THE DELAY HAS OCCURRED DUE TO ADHERENCE TO CERTAIN ADMINISTRATIVE PROCEDURES. CONSIDERING THE SUBMISS IONS MADE BY THE REVENUE, WE CONDONE THE DELAY AND ADMIT THE APPEAL. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE DE SPITE THE SERVICE OF NOTICE THROUGH THE DEPARTMENT. HENCE WE PROCEED TO HEAR THE APPEAL EX- PARTE, QUA THE ASSESSEE. 2. THE FACTS RELATING TO THE ISSUE ARE STATED I N BRIEF. THE ASSESSEE, A PARTNERSHIP FIRM, IS CARRYING ON BUSINESS IN CHILLI ES AS GENERAL MERCHANT AND COMMISSION AGENT. DURING THE COURSE OF ASSESSMENT PROCEEDING, THE ITA NO 487 OF 09 MERAMCHAND NEMICHAND, GUNTUR PAGE 2 OF 3 ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS IN CURRED EXPENDITURE OF RS.10,28,056/- TOWARDS COOLING CHARGES PAID TO VARI OUS COLD STORAGE COMPANIES. THE ASSESSING OFFICER FURTHER NOTICED T HAT THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE AS PER THE PROVISIONS OF SEC. 194C OF THE ACT ON THE SAID PAYMENTS. ACCORDINGLY THE ASSESSING OFFICER DI SALLOWED THE COOLING CHARGES CITED ABOVE, BY INVOKING THE PROVISIONS OF SEC. 40(A)(IA) OF THE ACT. BEFORE LD CIT(A), THE ASSESSEE CONTENDED THAT IT HA S INCURRED A SUM OF RS.70,373/- ONLY ON ITS OWN ACCOUNT AND THE REMAINI NG AMOUNT OF RS.9,57,683/- WAS PAID ON BEHALF OF HIS PRINCIPALS IN HIS COMMISSION AGENCY BUSINESS. THE LD CIT(A) WAS CONVINCED WITH THE SAI D EXPLANATIONS OF THE ASSESSEE AND ACCORDINGLY DELETED THE ADDITION OF RS .9,57,683/- WHICH IS RELATED TO THE PAYMENTS MADE ON BEHALF OF THE PRINC IPALS. NOW THE REVENUE IS IN APPEAL BEFORE US ASSAILING THE DECISI ON OF LD CIT(A). 3. WE HAVE HEARD LD D.R AND CAREFULLY PERUSED T HE RECORD. THE CONTENTION OF THE REVENUE IS THAT THE ASSESSEE WOUL D BE LIABLE TO DEDUCT TDS ON PAYMENT OF COOLING CHARGES, EVEN IT WAS MADE ON BEHALF OF THE PRINCIPALS. ACCORDING TO THE REVENUE THE ASSESSEE IS REQUIRED TO ROUTE THE PAYMENT OF COOLING CHARGES AND THE REIMBURSEMENT RE CEIVED FROM THE PRINCIPALS THROUGH ITS PROFIT AND LOSS ACCOUNT AND IN THAT CASE, THE ASSESSEE IS LIABLE TO DEDUCT TDS ON THE SAID PAYMENTS. 4. WE NOTICE THAT THE LD CIT(A) HAS ACCEPTED TH E PLEA OF THE ASSESSEE THAT THE COOLING CHARGES TO THE TUNE OF RS.9,57,683 /- WAS PAID ON BEHALF OF THE PRINCIPALS. HOWEVER, THE ASSESSING OFFICER HAS NOT DISCUSSED THE ISSUE ON THOSE LINES AND HENCE IT IS NOT KNOWN WHETHER TH E ASSESSEE HAS TAKEN THE SAID PLEA BEFORE THE ASSESSING OFFICER OR NOT. IT APPEARS THAT THE ASSESSEE HAS TAKEN THE SAID PLEA FOR THE FIRST TIME BEFORE THE LD CIT(A). HENCE, IN OUR VIEW, THE SAID PLEA IS REQUIRED TO BE EXAMINED WITH REFERENCE TO THE BOOKS OF ACCOUNT AT THE END OF THE ASSESSING OFFICER. BESIDES THE ABOVE, THE ASSESSEE DID NOT APPEAR BEFORE US TO CON TRADICT THE CONTENTIONS ITA NO 487 OF 09 MERAMCHAND NEMICHAND, GUNTUR PAGE 3 OF 3 OF THE REVENUE THAT THE PAYMENTS AND REIMBURSEMENT OF COOLING CHARGES SHOULD HAVE BEEN ROUTED THROUGH THE PROFIT AND LOSS ACCOUNT. THE SAID CONTENTIONS ARE REQUIRED TO BE CONFRONTED WITH THE ASSESSEE. IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT THE MATTER REQUI RES FRESH EXAMINATION. ACCORDINGLY WE SET ASIDE THE ORDER OF LD CIT(A) AND RESTORE THE ISSUE TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO E XAMINE THE ISSUE AFRESH IN ACCORDANCE WITH THE LAW AFTER AFFORDING NECESSARY O PPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 12 TH APRIL, 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE:12-04-2011 COPY TO 1 THE DY.COMMISSIONER OF INCOME TAX, CIRCLE-1(1) GUN TUR 2 M/S MERAMCHAND NEMICHAND, 24-10-26 R. AGRAHARAM, GUNTUR 3 4. THE CIT GUNTUR THE CIT(A), GUNTUR 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM