Income Tax Officer Ward-4, BHILAI(CG) V. SHRI Pradeep Kumar Singh, BHILAI(CG)

ITA 49/BIL/2011

• Counselvise Citation: 4924714 RSA 2011
• Duration Of Justice: 3 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 23-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K JAIN
• Keywords: Bonafide belief

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI H.L. KARWA, PRESIDENT AND SHRI REJENDRA, ACCOUNTANT MEMEBR ITA NO.49/BLPR/2011 A.Y. 2007-08 INCOME TAX OFFICER-4, VS. SHRI PRADEEP KUMAR SIN GH, BHILAI B-600 STREET-33, SMRITI NAGAR, BHILAI. (PAN: ATUPS 4302 E) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.K. JAIN, SR. D.R. RESPONDENT BY : NONE DATE OF HEARING : 17.12.2014 DATE OF PRONOUNCEMENT : 17.12.2014 ORDER PER H.L. KARWA, PRESIDENT THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF LD. CIT(A) BILASPUR, DATED 11.11.2010 RELATING TO A.Y. 2007-08 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS :- 1. WHETHER IN LAW AND ON FACTS AND CIRCUMSTANCES F THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS .14,00,000/- MADE BY THE AO U/S 40(A)(IA) OF THE ACT, AS THE ASSESSEE WA S FAILED TO DEDUCT TAX AT SOURCE U/S 194-I OF THE I.T. ACT, 1961 ON TH E EQUIPMENT RENT. 2. WHETHER IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE, THE 2 ITA NO .49/BLPR/2011 A.Y. 2007-08 LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F RS.6,55,265/- MADE BY THE AO U/S.68 OF THE I.T. ACT, 1961 IN ABSENCE O F BOOKS OF ACCOUNT. 3. AS REGARDS GROUND NO.1 OF THE APPEAL, THE A.O. D ISALLOWED RS.14,00,000/- PAID TO M/S APARAJITA OUT OF HYDRA HIRE CHARGES A S REGARDS NON-ALLOWABILITY OF A CONTRACTUAL PAYMENT (194C) IN THE WAKE OF NON-DEDUC TION OF TAX AT SOURCE UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961 (IN S HORT THE ACT). 4. AGGRIEVED BY THE ORDER OF A.O., THE ASSESSEE CAR RIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). BEFORE THE LD. CIT(A) THE A SSESSEE CONTENDED THAT THERE IS NO EVIDENCE SUGGESTING EXISTENCE OF THE CONTRACTOR AND SUB-CONTRACTOR RELATIONSHIP BETWEEN HIM AND M/S APARAJITA. THEREFORE, HE WAS N OT LIABLE TO DEDUCT TDS ON SUCH PAYMENT. THE ASSESSEE FURTHER SUBMITTED THAT THE RECIPIENT M/S APARAJITA IS A PARTNERSHIP FIRM AND THE ASSESSEE IS ONE OF THE PAR TNERS IN THIS FIRM. IT WAS ALSO STATED THAT THE FIRM HAD INCLUDED RECEIPTS IN ITS I NCOME AND ALSO PAID THE TAX ON THE SAME. HENCE, TAX COULD NOT BE RECOVERED ONCE AGAIN FROM THE SAID PARTY. IN SUPPORT OF THE ABOVE CONTENTION, THE ASSESSEE SUBMITTED COP Y OF TRADING AND PROFIT & LOSS ACCOUNT OF THE FIRM BEFORE THE LD. CIT(A). 5. ON APPEAL, THE LD. CIT(A) RELYING UP ON THE DECI SION OF HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE ( P) LTD. VS. CIT (2007) 293 ITR 226 (SC) AND KEEPING IN VIEW THE SUBSEQUENT AME NDMENT BROUGHT IN SECTION 40(A)(IA), DELETED THE ADDITION OBSERVING AS UNDER: - 3 ITA NO .49/BLPR/2011 A.Y. 2007-08 3.2. I HAVE GONE THROUGH THE OBSERVATIONS OF AO A ND SUBMISSIONS OF THE APPELLANT. ADMITTEDLY, THE RECIPIENT HAS PAID T AX IN RESPECT OF THE AMOUNT RECEIVED ON ACCOUNT OF SERVICES RENDERED TO THE APPELLANT. AS PER PROVISIONS OF SECTION 194C, TDS HAS TO BE MADE IN RESPECT OF THE INCOME COMPONENT CONTAINED IN THE RECEIPTS. IN SUCH CIRCUMSTANCES, SINCE TAX HAS BEEN PAID BY THE RECIPIENT, PRIMA-FAC IE, THE REQUIREMENT OF THE WORD OF LAW HAS BEEN COMPLIED WITH. THE LAW LAID DOWN BY THE HONBLE S.C. IN THE CASE OF HINDUSTAN COCO COLA BEV ERAGES (P) LTD. (SUPRA), THOUGH, W.R.T. SECTION 201(1A), ALSO SUGGE STS THAT TAX ONCE RECOVERED COULD NOT BE RECOVERED AGAIN. THE SUBSEQUENT AMENDMENTS BROUGHT IN SECTION 40(A)(IA) WATERED DOWN THE RIGOU RS OF APPLICABILITY. IT IS TRITE LAW THAT PROVISIONS OF THE ACT ARE NOT TO BE APPLIED IN A MECHANICAL WAY AND JUSTICE DESERVING TO BE DELIVERE D DEPENDING UPON THE PECULIAR CIRCUMSTANCES OF A GIVEN CASE. IN THIS CASE, THOUGH THE APPELLANT HAS NOT COMPLIED WITH THE PROVISIONS IN L ETTER AND SPIRIT, THE BONAFIDE BELIEF OF PAYMENT OF TAX BY THE RECIPIENT MIGHT HAVE LED TO THIS DEFAULT. SINCE TAX HAS EFFECTIVELY BEEN PAID TO THE EXCHEQUER, I AM OF THE OPINION THAT NO DISALLOWANCE IS CALLED FOR MERE LY ON TECHNICAL GROUNDS. THE DISALLOWANCE IS DELETED AND THE APPEAL IS ALLOW ED ON THIS GROUND. 6. WE HAVE HEARD SHRI D.K. JAIN, LD. D.R. AT LENGTH . HOWEVER, THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT TH E FINDINGS GIVEN BY THE LD. CIT(A) ON THIS ISSUE. IN THIS CASE, THE ASSESSEE H AS NOT DEDUCTED THE TDS ON HYDRA HIRE CHARGES PAYMENT AMOUNTING TO RS.14,00,000/- BU T M/S. APARAJITA (RECIPIENT OF INCOME) HAS DECLARED THE HYDRA HIRE CHARGES INCOME IN THEIR BOOKS OF ACCOUNT AND ALSO PAID THE INCOME TAX AT THE TIME OF FILING THE RETURN. THE LD. CIT(A) HAS CORRECTLY OBSERVED THAT THE TAX COULD NOT BE RECOVE RED ONCE AGAIN FROM THE DEDUCTOR-ASSESSEE. IN VIEW OF THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE (P) LTD. AND ALSO IN V IEW OF THE SUBSEQUENT AMENDMENT BROUGHT IN SECTION 40(A)(IA), WE ARE OF T HE VIEW THAT THE ORDER OF THE LD. CIT(A) DESERVES TO BE UPHELD. WE HOLD ACCORDINGLY AND DISMISS GROUND NO.1 OF 4 ITA NO .49/BLPR/2011 A.Y. 2007-08 THE APPEAL. 7. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIV E AND PERUSING THE ORDERS OF THE AUTHORITIES BELOW, WE OBSERVE THAT GROUND NO.2 OF THIS APPEAL DOES NOT ARISE OUT OF THE ORDERS OF THE LOWER AUTHORITIES AND, THEREFO RE, WE DISMISS THE SAME. 8. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.12.2014. SD/- SD/- (RAJENDRA) (H.L. KARWA) ACCOUNTANT MEMBER PRESIDENT RAIPUR, DATED: 17.12.2014 PBN/* COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. D.R. ITAT, RAIPUR BENCH, RAIPUR 6. GUARD FILE //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, RAIPUR