The Dy. Commissione of Income-tax, Jammu V. M/s. J&K Cooperative Supply & Marketing, Jammu

ITA 527/ASR/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1444 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 28-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V K SINGH
• Assessee Lawyers: MANJEET SINGHCA
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (JAMMU CAMP; JAMMU ) BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S.KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A NO. 527(ASR)/2014 ASSESSMENT YEARS: 2006-07 THE DCIT, CIRCLE-2, JAMMU. VS. M/S . J & K COOPERATIVE SUPPLY & MARKETING FEDERATION LTD., SUPER BAZAR, JAMMU. PAN: AAAT0881B (APPELLANT) (RESPONDENT) APPELLANT BY: SH. K.V.K SINGH (DR.) RESPONDENT BY: SH. MANJEET SINGH(CA.) DATE OF HEARING: 01.12.2015 DATE OF PRONOUNCEM ENT: 10 .12.2015 ORDER PER T.S.KAPOOR (A.M): THIS IS AN APPEAL FILED BY THE REVENUE AGAI NST THE ORDER OF LEARNED CIT(A) DATED 24.06.2014 FOR ASST. YEAR 2006-07. 2. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE ARE R EPRODUCED BELOW. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LEARNED CIT(A) WAS RIGHT IN DELETING THE ADDITION MADE IN RESPECT OF P AYMENTS AS FREIGHT GIVEN TO THE TRUCK OWNERS ON THE BASIS THAT NO TDS WAS DEDUCTIBLE AS EACH CONTRACT WAS BELOW RS.20,000/-. 2. ITA NO.52 7 (ASR)/2014 ASST. YEAR 200 6-07 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LEARN ED CIT(A) WAS RIGHT IN NOT CONSIDERING THE SECTION 40(A)(IA) READ WITH SECTION 194C OF THE I.T. ACT, 1961. 3. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN DELETING THE ADDITION MADE ON ACCOUNT OF PAYMENT MADE FOR CARRIAGE OF LPG CYLINDERS BY RELYING ON DECISION OF THE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. VIRGIN CREATION. 3. AT THE OUTSET, THE LEARNED DR SUBMITTED THAT THE ASSESSING OFFICER HAD MADE ADDITION ON ACCOUNT OF PAYMENT OF FREIGHT GIVE N TO TRUCK OWNERS, THE TOTAL AMOUNT OF WHICH EXCEEDED RS.50,000/- AND THE REFORE, THE ASSESSEE WAS REQUIRED TO DEDUCT THE TDS ON PAYMENTS OF RS.3,44,2 0,003/-, WHICH HE FAILED TO DEDUCT AND THEREFORE, AS PER PROVISIONS OF SECTI ON 40(A)(IA), THE ASSESSING OFFICER HAD RIGHTLY MADE THE ADDITIONS. HE SUBMITTE D THAT THE LEARNED CIT(A) IN HIS FINDINGS HAS NOT CONSIDERED THAT FOR THE PURPOS ES OF DEDUCTION OF TDS THE TOTAL OF PAYMENTS WAS TO BE CONSIDERED WHEREAS HE H AS CONSIDERED ONLY INDIVIDUAL GRS FOR THE PURPOSES OF DEDUCTION OF TDS . 4. REGARDING GROUND NO.3, THE LEARNED DR SUBMITTED THAT THE ASSESSEE HAD THOUGH DEDUCTED THE TDS ON PAYMENT MADE TO M/S NAJM A TRANSPORT CO. BUT THE SAME WAS DEPOSITED LATE AND THEREFORE, AS PER T HE PROVISIONS OF 40(A)(IA) THE SAME WAS RIGHTLY ADDED BACK TO THE INCOME OF ASSESS EE. 5. THE LEARNED AR, ON THE OTHER HAND, INVITED OUR A TTENTION TO THE FINDINGS OF LEARNED CIT(A) AS CONTAINED FROM PAGE 16 ONWARDS AND SUBMITTED THAT NO SPECIFIC CONTRACT WAS ENTERED WITH TRUCK OWNERS AND INDIVIDUAL PAYMENTS WERE 3. ITA NO.52 7 (ASR)/2014 ASST. YEAR 200 6-07 LESS THAN RS.20,000/- AND HE SUBMITTED THAT WHERE T HE PAYMENT EXCEEDED RS.20,000/-, THE LEARNED CIT(A) HAS ALREADY UPHELD THE ADDITIONS. AS REGARDS THE OTHER ADDITION ON ACCOUNT OF LATE PAYMENT OF TD S, HE SUBMITTED THAT THE AMOUNT WAS DEPOSITED BEFORE THE DUE DATE OF FILING OF RETURN AND THEREFORE WAS AN ALLOWABLE DECUTION. 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. AS REGARDS THE FIRST ISSUE, WE FI ND THAT THE ASSESSING OFFICER HAD MADE AN ADDITION OF RS.3,44,20,003/-, ON ACCOUN T OF PAYMENTS OF FREIGHT PAID TO TRUCK OWNERS. THE LEARNED CIT(A), ON THE OT HER HAND, HAS RECORDED A FINDING OF FACT THAT OUT OF SAID AMOUNT THE AMOUNT EXCEEDING RS.20,000/- WAS AMOUNTING TO ONLY RS.13,24,344/- ON WHICH HE HAD U PHELD THE ADDITION MADE BY ASSESSING OFFICER. REGARDING THE BALANCE AMOUNT THE LEANED CIT(A) HAS RELIED UPON THE CASE LAWS OF CIT VS. UNITED RICE LA ND MILLS LTD. 217 CTR 332 AND ALSO RELIED ON THE CASE LAWS OF M/S INDIAN ROAD LINES 45 DTR 49 DECIDED BY ITAT, AMRITSAR BENCH, AMRITSAR. WE FURTHER FIND THAT THE CBDT VIDE CIRCULAR NO.715 DATE 8.8.1995 IN AN ANSWER TO QUEST ION NO.9 RELATING TO CLUBBING OF SEPARATE GRS FOR THE PURPOSES OF TREATI NG AS ONE CONTRACT HAD REPLIED AS UNDER: NORMALLY EACH GR CAN BE SAID TO BE A SEPARATE CONT RACT IF THE GOODS ARE TRANSPORTED AT ONE TIME BUT IF THE GOODS ARE TRANSP ORTED CONTINUOUSLY IN PURSUANCE OF CONTRACT FOR SPECIFIC PERIOD OF QUANTI TY, EACH GR WILL NOT BE A SEPARATE CONTRACT AND ALL GRS RELATED TO THAT PERIO D OR QUANTITY WILL BE AGGREGATED FOR THE PURPOSES OF TDS. 4. ITA NO.52 7 (ASR)/2014 ASST. YEAR 200 6-07 FROM THE ABOVE SAID CIRCULAR ISSUED BY CBD T IT IS CLEAR THAT IF CONTRACT WAS WITH DIFFERENT TRUCK OWNERS/DRIVERS AN D THE GOODS ARE NOT TRANSPORTED IN PURSUCANCE OF A SPECIFIC CONTRACT TH EN PAYMENTS TO DIFFERENT TRUCK OWNERS/DRIVER WILL BE TREATED AS SEPARATE CON TRACTS. IN THE PRESENT CASE THE ASSESSEE HAS PAID FREIGHT T O TRUCK OWNERS FOR EACH TRUCK SEPARATELY AS EACH TRUCK WAS HEADED FOR A SEP ARATE DESTINATION AND NO PAYMENT WAS MADE FOR A CONSOLIDATED CONTRACT. THE H ONBE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. UNITED RICE LAND MILLS LTD. 217 CTR 332(P&H) HAS RECORDED A FINDING OF FACT THAT WHERE THERE WAS NEITHER ANY WRITTEN AGREEMENT BETWEEN THE ASSESSEE NOR WHERE IT IS PROVED THAT FREIGHT CHARGES WERE PAID TO THEM IN PURSUANCE OF A CONTRAC T FOR A SPECIFIC PERIOD, QUANTITY OR PRICE, THE INDIVIDUAL PAYMENTS MADE TO SEPARATE TRUCK OWNERS CANNOT BE SAID TO HAVE BEEN MADE IN PURSUANCE OF A CONTRACT. THE LEARNED CIT(A) HAS ALSO RECORDED A FINDING OF FACT THAT THE FACT OF NOT ENTERING A SPECIFIC CONTRACT WAS ALSO BROUGHT TO THE NOTICE OF AO DURIN G THE ASSESSMENT PROCEEDINGS WHICH HE DID NOT CONSIDER. HE ALSO HELD THAT THE ASSESSING OFFICER COULD NOT BRING ON RECORD ANYTHING TO PROVE THAT TH E PAYMENTS TO TRUCK OWNERS WERE MADE IN PURSUANCE OF ANY AGREEMENT. IN VIEW OF THE ABOVE, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF CIT(A), THEREFORE, TH E GROUND NOS.1 AND 2 ARE DISMISSED. 7. NOW COMING TO GROUND NO.3, WE FIND THAT THE ASSE SSING OFFICER HAS MADE AN ADDITION OF RS.24,47,736/- BY HOLDING AS UNDER: 5. ITA NO.52 7 (ASR)/2014 ASST. YEAR 200 6-07 (C) PAYMENT OF FREIGHT TO TRANSPORT COMPANY: A PAYMENT OF RS.24,47,736/- HAS BEEN MADE BY THE ASSESSEE TO M/S NAAZ TRANSPORT CO. 55 BATAWARA CHOWK SRINAGAR KASHMIR ON ACCOUNT O F FERTILIZER TRANSPORTATION AT SRINAGAR ON 20/01/2006. THE NECES SARY TDS ON THE SAID PAYMENT HAS BEEN DEDUCTED BY THE ASESSEE AND DEPOSI TED ON 06/10/2006 IN TO THE CENTRAL GOVT. ACCOUNT AS PER T HE AMENDED PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME TAX A CT,1961 THE TAX WAS REQUIRED TO BE DEPOSITED ON OR BEFORE THE LAST DAY OF THE KPREVIOUS YEAR. SINCE THE ASSESSEE MADE THE PAYMENT IN THE MONTH OF JANUARY 2006 AND WAS REQUIRED TO DESPOSIT THE TAX BEFORE 31 ST MARCH OF THE SAID FINANCIAL YEAR. THEREFORE, THE AFOREMENTIONED PAYMENT OF RS.2 4,47,736/- WHICH HAS NOT BEEN DEPOSITED TO GOVT. ACCOUNT WITHIN THE STIP ULATED PERIOD, THE SAME IS PROPOSED TO BE ADDED BACK IN ITS INCOME AS PER T HE PROVISONS OF SECTION 40(A)(IA) OF THE INCOME TAX ACT,1961 FOR THE YEAR U NDER CONSIDERATION. PENALTY PROCEEDING UNDER SECTION 271(1)(C) OF THE I NCOME TAX ACT, 1961 FOR FURNISHING INACCURATE PARTICULARS OF INCOME ARE HER EBY INITIATED. THE LEARNED CIT(A) HAS DELETED THIS ADDITION RELYIN G ON THE DECISION OF HONBLE CULCUTTA HIGH COURT IN THE CASE OF CIT VS. VIRGIN C REATIONS GA NO.302/2011, WE FIND THAT IT IS AN UNDISPUTED FACT THAT THE ASSE SSEE HAD DEPOSITED THE AMOUNT OF TAX BEFORE THE FILING OF RETURN OF INCOME . THE FINANCE ACT 2010 HAS AMENED THE PROVISIONS OF SECTION 40(A)(IA) GIVING E FFECT THAT IF THE TAX DEDUCTED IS DEPSOITED BEFORE THE PRESCRIBED TIME FOR FILING OF RETURN U/S 139(1) THEN DISALLOWANCE CAN NOT BE MADE. THOUGH THIS AMENDMENT IS EFFECTIVE FROM 1.04.2010 BUT THE SAME IS HELD TO BE RETROSPECTIVE W.E.F 1.04.2005, IN VIEW OF THE JUDGEMENT OF HONBLE KOKATA HIGH COURT IN THE C ASE OF CIT VS. VERGIN CREATIONS IN ITA 302 OF 2011 WHEREIN THE HONBLE CO URT HAS HELD THAT AMENDMENT IN THE PROVISIONS OF SECTION 40(A)(IA) RE QUIRES TO BE TREATED WITH RETROSPECITVE OPERATION. THE LEARNED CIT(A) HAS REC ORDED DETAILED FINDINGS IN THIS RESPECT AND WE DO NOT FIND ANY INFIRMITY IN TH E SAME. 6. ITA NO.52 7 (ASR)/2014 ASST. YEAR 200 6-07 8. IN VIEW OF THE ABOVE, GROUND NO.3 IS ALSO DIS MISSED. 9. IN THE RESULT, THE APPEAL FILED BY REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH DECEMBER, 2015. SD/- SD/- (A.D.JAIN) (T.S.KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 10.12.2015 PK/PS COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: 2. THE 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.