The ACIT, Circle-1, RAJKOT-GUJARAT V. Shri Gordhandas A. Pavani, GONDAL

ITA 491/RJT/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89140 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 29-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR

Judgement Text

: : IN THE INCOME TAX APPELLATE TRIBULAL RAJKOT BENCH: RAJKOT 0 00 0 0 00 0 , , , , ! ' ! ' ! ' ! ', , , , #$ #$ #$ #$ BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ ././ ./ ITA NO.491/RJT/2012 ' (' ' (' ' (' ' ('/ // / ASSESSMENT YEAR: 2007-08 THE ACIT, CIRCLE-1, RAJKOT VS SHRI GORDHANDAS A THAVANI ANAND, 151, BHAVNATHNAGAR, GONDAL PAN : AAYPT 4568 N )* )* )* )* / // / (APPELLANT) +, +, +, +, )* )*)* )* / // / (RESPONDENT) REVENUE BY : SHRI AVINASH KUMAR, DR ASSESSEE(S) BY : SHRI D.M. RINDANI, CA - . ' // // / DATE OF HEARING : 18/02/2015 0( . ' / / DATE OF PRONOUNCEMENT: 27/02/2015 1 1 1 1/ // / O R D E R PER BENCH : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-I, RAJ KOT DATED 27.06.2012 FOR THE ASSESSMENT YEAR 2007-08. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL:- 1. THE LEARNED CIT(A)-I, RAJKOT ERRED IN LAW AND ON FA CTS IN DELETED THE ADDITION RS.2,18,88,279/- ON ACCOUNT OF DEDUCTION C LAIMED U/S 40(A)(IA) OF THE I.T. ACT. 2. THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER O F THE ASSESSING OFFICER. ITA NO. 491-RJT-2012 SHRI GORDHANDAS A THAVANI AY 2007-08 - 2 - 3. IT IS, THEREFORE, PRAYED THAT THE FINDING GIVEN IN THE ORDER OF THE LD. CIT(A) MAY BE DISMISSED/DELETED AND THAT OF THE ASS ESSING OFFICER BE RESTORED. 3. THE ONLY EFFECTIVE GROUND OF APPEAL IS AGAINST T HE DELETION OF ADDITION OF RS.2,18,88,279/- MADE BY THE ASSESSING OFFICER B Y INVOKING PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 4. THE LD. CIT-DR STRONGLY SUPPORTED THE ORDER OF T HE ASSESSING OFFICER AND SUBMITTED THAT THE LD. CIT(A) HAS FOLLOWED THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF M/S. MERILYN S HIPPING & TRANSPORTS VS. ACIT, REPORTED IN (2012) 136 ITD 23 (VISAKHAPA TNAM) (SB). HE SUBMITTED THAT THE SAID DECISION HAS BEEN OVERRULED . 5. ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT THE PAYMENTS WERE NOT MADE THROUGH MUKADAM BUT WAS MADE DIRECTLY TO THE LABOURERS. HE FURTHER SUBMITTED THAT NOT A SINGLE PAYMENT TO LABOURERS WAS EXCEEDED RS.20,000/- AND THEREFORE, THERE WAS N O NEED TO DEDUCT THE TAX AT SOURCE. THE LD. COUNSEL OF THE ASSESSEE SUB MITTED THAT THE CO- ORDINATE BENCH OF THE TRIBUNAL ON IDENTICAL FACTS H AD DELETED THE DISALLOWANCE IN ITA NO. 1013/RJT/2010 IN THE CASE O F ITO VS. VISHRAM KARSHAN GORASIYA AND IN ITA NO. 493/RJT/2012 IN THE CASE OF ACIT VS. SHRI MAHESH SAVJIBHAI KATARIA. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE LD. CIT(A) HAS DELETED THE DISALLOWANCE BY OBSERVING AS UNDER:- 4.2 I HAVE CAREFULLY CONSIDERED THE FINDING GIVEN BY THE ASSESSING OFFICER AND THE SUBMISSION OF THE AR OF THE APPELLANT. IT H AS BEEN HELD BY THE HONBLE ITAT, AHMEDABAD IN THE CASE OF LAXMI PROTEI N PRODUCTS PVT LTD (3 ITR768 (2010) THAT WHEN THE PAYMENTS MADE TO LABOUR ER THROUGH THEIR ITA NO. 491-RJT-2012 SHRI GORDHANDAS A THAVANI AY 2007-08 - 3 - REPRESENTATIVE AND SINGLE PAYMENT DOES NOT EXCEED R S.20,000/-, TAX NEED NOT BE DEDUCTED AT SOURCE. IN THE INSTANT CASE, THE PAY MENTS WERE MADE TO LABOURERS THROUGH MUKADAM WHICH IS EVIDENT FROM THE LEDGER ACCOUNT OF LABOUR EXPENSES AND SINGLE PAYMENT DOES NOT EXCEED RS.20,000/-. MOREOVER, THE PROVISIONS OF S. 40(A)(IA) ARE NOT APPLICABLE I F THE PAYMENT OF EXPENDITURE HAS ALREADY BEEN MADE OR THE EXPENDITURE IS NOT OUT STANDING AT THE END OF THE FINANCIAL YEAR. RELIANCE CAN ALSO BE PLACED ON THE DECISION IN THE CASE OF MERILYNE SHIPPING & TRANSPORT VS. ACIT (2012) 136 I TD 23 (VISHAKHAPATNAM) (SB) / 20 TAXMAN 244. THEREFORE, I N VIEW OF THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE AND THE LEGAL POSITION IN THE CASE OF LAXMI PROTEIN PRODUCTS P. LTD (SUPRA) & MERILYNE SH IPPING & TRANSPORT (SUPRA) THE DISALLOWANCE OF RS.2,18,88,279/- IS HER EBY DIRECTED TO BE DELETED. THIS GROUND OF APPEAL IS ALLOWED. 7. THE CONTENTION OF THE LD. COUNSEL OF THE ASSESSE E IS THAT THE ISSUE IS COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASES ITO VS. VISHRAM KARSHAN GORASIYA (SUPRA) AND ACIT VS. SHRI MAHESH SAVJIBHAI KATARIA (SUPRA). WE FIND THAT THE CO-ORD INATE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. SHRI MAHESH SAVJIB HAI KATARIA HAS NOTED THE FACTS IN PARAGRAPH 2 OF THE ORDER AND AFTER NOT ING THE FACTS, THE TRIBUNAL HAS HELD AS UNDER:- 6. HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. ADMITTEDLY, AS PER LATEST JU DGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V. SIKANDARKHAN N. TU NVAR (SUPRA), THE VIEW TAKEN BY THE ITAT, VISHAKHAPATNAM (SB) THAT SEC. 40 (A)(IA) WOULD COVER ONLY AMOUNTS WHICH ARE PAYABLE AS ON 31 ST MARCH OF A PARTICULAR YEAR IS NOT MORE A GOOD LAW. HOWEVER, IN OUR CONSIDERED OPINION , THE VIEW TAKEN BY LD. CIT(A) DELETING THE DISALLOWANCE MADE U/S 40(A)(IA) DESERVES TO BE UPHELD BECAUSE THE ASSESSEE HAS MADE THE PAYMENT TO THE LA BOURER THROUGH THEIR REPRESENTATIVES AND SINGLE PAYMENT DOES NOT EXCEED RS.20,000/-. THE REVENUE HAS NOT PRODUCED ANY EVIDENCE TO DISPROVE T HIS FINDING OF FACT REPORTED BY THE LD. CIT(A) IN THE IMPUGNED ORDER. W E THEREFORE, INCLUDED TO UPHELD THE ORDER OF LD. CIT(A) KEEPING IN VIEW THE DECISION OF ITAT, AHMEDABAD IN THE CASE OF LAXMI PROTEIN PRODUCTS PVT LTD. (SUPRA). RESULTANTLY, THE APPEAL OF THE REVENUE IS DISMISSED . ITA NO. 491-RJT-2012 SHRI GORDHANDAS A THAVANI AY 2007-08 - 4 - THIS ORDER OF THE TRIBUNAL WAS AGAIN FOLLOWED IN T HE CASE OF ITO VS. VISHRAM KARSHAN GORASIYA (SUPRA). THE FACTS IN THE PRESENT CASE IN HAND ARE IDENTICAL TO THE AFORESAID CASES AS IN THIS CAS E ALSO THE ASSESSEE HAS MADE PAYMENT TO LABOURERS THROUGH MUKADAM I.E. REPRESENT ATIVE OF THE LABOURER AND NOT A SINGLE PAYMENT TO THE LABOURERS WAS EXCEE DED RS.20,000/- IN EACH CASE. THEREFORE, WE DO NOT SEE ANY GOOD REASON TO I NTERFERE WITH THE ORDER OF LD. CIT(A) WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS HEREBY REJECTED. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S REJECTED. ORDER PRONOUNCED IN THE COURT ON 27 TH FEBRUARY, 2015 AT AHMEDABAD. SD/- SD/- ( N.S. SAINI) ACCOUNTANT MEMBER (KUL BHARAT) JUDICIAL MEMBER AHMEDABAD; DATED 27/02/2015 *BIJU T. 1 1 1 1 . .. . +'2 +'2 +'2 +'2 32(' 32(' 32(' 32(' / COPY OF ORDER FORWARDED TO:- 1. )* / APPELLANT- 2. +,)* / RESPONDENT- 3. 7 ' 8 / CONCERNED CIT/DIT 4. 8() / THE CIT(A)-I, RAJKOT 4 . 2! ; +' , , / DR, ITAT, RAJKOT 5 . ; <' = > / GUARD FILE. 1 1 1 1 / BY ORDER, TRUE COPY ? ?? ?/ // /@ @ @ @ ( DY./ASSTT.REGISTRAR) / ITAT, RAJKOT