ITO, New Delhi V. M/s Prince Motor Link Pvt. Ltd., New Delhi

ITA 566/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4896 (ITAT-DELHI)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 17-05-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 01-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Non-deduction of tax
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT ITA NO.566/DEL/2017 ASSESSMENT YEAR : 2012-13 ITO, WARD-20(1), CR BUILDING, IP ESTATE, NEW DELHI. VS. PRINCE MOTOR LINK PVT. LTD., 309, POST OFFICE WALI GALI, CHHOTA BAZAR, SHAHDRA, NEW DELHI. PAN: AAECP6002A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAKESH KUMAR KHIWANI, CA DEPARTMENT BY : SHRI T. VASANTHAN, SR. DR DATE OF HEARING : 31.08.2017 DATE OF PRONOUNCEMENT : 01.09.2017 ORDER THIS APPEAL FILED BY THE REVENUE ARISES OUT OF TH E ORDER PASSED BY THE CIT(A) ON 29.11.2016 IN RELATION TO THE ASSESSM ENT YEAR 2012-13. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAIN ST THE DELETION OF ADDITION OF RS.39,74,024/- MADE BY THE ASSESSING OF FICER ON ACCOUNT OF ITA NO.566/DEL/2017 2 NON-DEDUCTION OF TAX AT SOURCE ON PAYMENTS MADE BY THE ASSESSEE TO ITS SISTER CONCERN, M/S M.V. LOGISTICS LTD. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE CLAIMED EXPENSES OF RS.39,74,024/- UNDER THE HEAD TRUCK, D IESEL AND DRIVER EXPENSES. ON ENQUIRY, IT WAS FOUND THAT THESE EXP ENSES WERE INCURRED BY M/S M.V. LOGISTICS LTD. AND REIMBURSED BY THE AS SESSEE TO IT OR ADJUSTED AGAINST THE TRANSPORT RECEIPTS. THE ASSES SEE CONTENDED THAT IT HAD ATTACHED SOME TRUCKS WITH M/S M.V. LOGISTICS LT D. AND ALSO EARNED INCOME THEREFROM. THE EXPENSES OF RS.39.74 LAC REL ATED TO SUCH TRUCKS WHICH WERE INCURRED BY M/S M.V. LOGISTICS LTD., AND REIMBURSED OR ADJUSTED FROM RECEIPTS BY THE ASSESSEE. THE ASSESSI NG OFFICER HELD THAT THE PROVISIONS OF SECTION 194C WERE APPLICABLE. IN THE ABSENCE OF THE ASSESSEE HAVING DEDUCTED ANY TAX AT SOURCE FROM SUC H PAYMENTS, HE HELD THAT THE AMOUNT WAS DISALLOWABLE. APART FROM THAT, IT WAS FURTHER NOTICED THAT THE ASSESSEE FAILED TO FURNISH THE DET AILS OF SUCH EXPENSES REIMBURSED TO M/S M.V. LOGISTICS LTD. THE LD. CIT( A) OVERTURNED THE ASSESSMENT ORDER, AGAINST WHICH THE REVENUE HAS COM E UP IN APPEAL BEFORE THE TRIBUNAL. ITA NO.566/DEL/2017 3 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. IN SO FAR AS THE GENUINENESS O F THE EXPENDITURE IS CONCERNED, IT IS FOUND THAT SUCH EXPENSES WERE ACT UALLY INCURRED, WHICH IS EVIDENT FROM THE ASSESSEES ACCOUNT IN THE BOOKS OF M/S M.V. LOGISTICS LTD., WHOSE COPY HAS BEEN PLACED ON PAGES 26 ONWARDS OF THE PAPER BOOK. IT IS APPARENT FROM THIS ACCOUNT THAT THE EXPENSES INCURRED BY M/S M.V. LOGISTICS LTD. ON THE TRUCKS OF THE ASS ESSEE WORKING WITH THEM, ARE DULY DEBITED TO THE ASSESSEES ACCOUNT W ITH NECESSARY CREDIT IN RESPECT OF TRANSPORT RECEIPTS. VERACITY OF THIS AC COUNT HAS NOT BEEN DISPUTED. AS SUCH, THE GENUINENESS OF THE EXPENSES CANNOT BE DOUBTED. 5. IN SO FAR AS THE APPLICATION OF SECTION 194C IS CONCERNED, I FIND THAT THE SAME IS NOT APPLICABLE. M/S M.V. LOGISTICS LTD . DID NOT CARRY OUT ANY CONTRACT FOR THE ASSESSEE. ONLY SOME EXPENSES INCURRED ON TRUCKS DIESEL ETC., WHICH WAS OTHERWISE AN OBLIGATION OF T HE ASSESSEE, WERE INITIALLY INCURRED BY THEM IN RUNNING THE TRUCKS AN D THEN CLAIMED FROM THE ASSESSEE. THIS CANNOT BE CONSTRUED AS CARRYING OF ANY `WORK BY M/S M.V. LOGISTICS, REQUIRING DEDUCTION OF TAX AT SOURC E U/S 194C OF THE ACT ITA NO.566/DEL/2017 4 FROM THE AMOUNT REIMBURSED BY THE ASSESSEE. IT IS S IMPLY A CASE OF REIMBURSEMENT AS SUCH OF ACTUAL EXPENSES, NOT HAVIN G ANY PROFIT ELEMENT. THUS, THE PROVISIONS OF SECTION 194C ARE N OT APPLICABLE. IN VIEW OF THE FOREGOING DISCUSSION, I AM SATISFIED TH AT THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE OF RS.39.74 LAC MADE BY THE ASSESSING OFFICER. 6. IN THE RESULT, THE APPEAL FILED BY THE REV ENUE IS DISMISSED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 0 1 ST SEPTEMBER, 2017. SD/- [R.S. SYAL] VICE PRESIDENT DATED, 01 ST SEPTEMBER, 2017. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.