I.T.O., V. Shri Shyam Sunder Prasad, Gaya

ITA 57/PAT/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9648 (ITAT-PATNA)
• Duration Of Justice: 4 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2017
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 05-04-2013
• Court: TRIBUNAL
• Department Lawyers: T VARKEY JUDIC IA L M EMBER
• Assessee Lawyers: KAUSIK KUMAR DAS DR CROSS OBJ
• Section: 194C; 147

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH:P ATNA BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 57/PAT/2013 ASSESSMENT YEAR: 2006-07 INCOME-TAX OFFICER, WD-3(2), GAYA / V/S . SHRI SHYAM SUNDER PRASAD, S/O LATE BAIJNATH PRASAD, GRINDING MILL & OIL MILL, CHHOTKI DELHA OPP. BAL NIKETAN, GAYA. PAN : AJAPP3268J /APPELLANT .. /RESPONDENT & C.O. NO.03/PAT/2013 IN ITA NO. 57/PAT/2013 ASSESSMENT YEAR: 2006-07 SHRI SHYAM SUNDER PRASAD, GAYA / V/S . INCOME-TAX OFFICER, WD-3(2), GAYA CROSS OBJECTOR .. /RESPONDENT BY REVENUE SHRI KAUSIK KUMAR DAS, DR BY ASSESSEE/CROSS OBJECTOR SHRI RAKESH KUMAR, ADVOC ATE DATE OF HEARING 03-04-2017 DATE OF PRONOUNCEMENT 05-04-2017 /O R D E R PER BENCH: THIS APPEAL AND THE CROSS OBJECTION FILED BY THE REVENUE AND ASSESSEE RESPECTIVELY ARE ARISING OUT OF ORDER OF COMMISSIONER OF INCOME- TAX(APPEAL), DHANBAD [CIT(A)] DATED 07-01-2013. SINCE BOTH THE APPEAL AND THE CROSS OBJ ECTIONS ARE ARISING OUT OF SAME ORDER OF THE CIT(A), WE DISPOSE OF BOTH THE APPEAL AND THE C ROSS OBJECTION BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2 ITA NO. 57/PAT/2013 SHRI SHYAM SUNDER PRASAD, AY-2006-07 2. THE SOLE GROUND OF APPEAL RAISED BY THE REVENUE IS AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION TO THE TUNE OF RS.4 5,74,228/- MADE BY THE AO U/S. 40(A)(IA) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT). 3. BRIEF FACTS ARE THAT DURING THE YEAR THE ASSESSE E GOT TRANSPORT CONTRACT FROM M/S. BIHAR STATE FOOD & CIVIL SUPPLIES CORPORATION LTD., BIHAR. ACCORDING TO THE AO, THE TDS WAS REQUIRED TO BE DEDUCTED ON THE PAYMENT OF RS.45 ,74,228/- MADE TO THE TRANSPORTERS. ACCORDING TO THE AO, SINCE THE ASSESSEE HAS NOT DED UCTED TAX AT SOURCE ON THE SAID AMOUNT, HE DISALLOWED THE SAID AMOUNT/S. 40(A)(IA) OF THE A CT. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO DE LETE THE SAME. AGGRIEVED, THE REVENUE IS BEFORE US. 4. WE HAVE HEARD RIVAL PARTIES AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. WE NOTE THAT THE AO HAS DESCRIBED THE PAYMENT MADE TO THE T RANSPORTERS WHICH DETAILS ARE AVAILABLE IN ABOUT 110 PAGES AND CONTAINED REGISTRATION NUMBE R OF ABOUT 300 TRUCKS. IN THE OPINION OF THE AO, ENGAGEMENT OF SUCH LARGE NUMBER OF TRUCK S CREATES DOUBT AND HE FURTHER OBSERVED THAT ONLY TRUCK NUMBERS HAVE BEEN GIVEN AN D NAMES AND ADDRESSES OF THE TRANSPORTERS HAVE NOT BEEN ENTERED IN THE RECORDS O F THE ASSESSEE. THE ASSESSEES CASE IS THAT IT HAS NOT ENTERED INTO ANY KIND OF CONTRACT WITH T HE TRANSPORTERS. ACCORDING TO THE ASSESSEE, THE TRANSPORTERS ARE HIRED AS AND WHEN REQUIRED WIT HOUT ANY ORAL/WRITTEN CONTRACTS. IT WAS BROUGHT TO THE NOTICE OF THE AUTHORITIES BELOW THAT THERE WAS NO FIXED TRANSPORTER AND, THEREFORE, THERE WAS NO REQUIREMENT OF TAX BEING DE DUCTED AT SOURCE. THE LD. CIT(A) NOTED THAT IN CASE THERE WAS ANY DOUBTS AS TO THE GENUINE NESS OF THE CLAIM OF THE ASSESSEE IN THIS ISSUE THEN AO WAS NOT PRECLUDED FROM SEEKING THE I NFORMATION OF THE OWNERS AND THEIR ADDRESSES FROM RTO OFFICE, SINCE THE TRUCK NUMBERS WERE EVIDENT FROM THE RECORDS OF THE ASSESSEE. THE LD. CIT(A) TOOK NOTE OF THE FACT THAT FROM THE DETAILS FURNISHED BEFORE THE DEPARTMENT, IT IS SEEN THAT THE PAYMENTS WERE OF SM ALL AMOUNT AND WHICH WERE MOSTLY LESS THAN RS.1300/- ON ANY ONE OCCASION AND THERE WAS NO REASON TO DOUBT THE GENUINENESS OF THE PAYMENTS. IN THE LIGHT OF THE AFORESAID FACTUAL BA CKGROUND, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A) IN ALLOWING THE CLAIM OF THE ASSESSEE SINCE THE DISALLOWANCE COULD NOT HAVE BEEN MADE U/S. 40(A)(IA ) OF THE ACT INVOKING SEC. 194C OF THE 3 ITA NO. 57/PAT/2013 SHRI SHYAM SUNDER PRASAD, AY-2006-07 ACT AS HAS BEEN DONE BY THE AO. HOWEVER, BEFORE US IT WAS PLEADED BY LD. DR THAT THE GROUND OF APPEAL SAYS ABOUT VIOLATION OF SECTION 19 4H OF THE ACT AND NOT U/S. 194C OF THE ACT. HOWEVER, WE DO NOT AGREE WITH THE SAID CONTEN TION OF THE DEPARTMENT BECAUSE A PERUSAL OF THE ASSESSMENT ORDER PAGE 1 ITSELF SHOW S THAT THE AO HAS TAKEN NOTE OF THE FACT THAT THE ASSESSEE HAS CONTRAVENED SECTION 194C OF T HE ACT WHILE MAKING PAYMENT OF A SUM OF RS.45,74,228/- WHICH WAS PAID AS HIRE CHARGES AN D COMMISSION TO TRANSPORTERS. THEREAFTER, WE TAKE NOTE THAT THE AO HAS CATEGORICA LLY RECORDED IN PAGE 3 OF HIS ORDER THAT REGARDING TRANSPORTATION CHARGES AND COMMISSION PA ID TO TRANSPORTERS RS.45,74,228/- WITHOUT DEDUCTING TAX U/S. 194C THE ASSESSEE HAS FU RNISHED DATE WISE LIST OF TRUCK NUMBERS IN 110 PAGES CONTAINING ABOUT 300 NUMBER OF TRUCKS AND AMOUNT OF FREIGHT PAID . NAME AND ADDRESS OF THE TRANSPORTERS ARE NOT MENTIONED. IN THE ABSENCE OF NAME AND ADDRESS OF THE TRANSPORTERS REQUIRED TO BE FURNISHED BY THE AS SESSEE, THE GENUINENESS AND BONA FIDE OF TRANSPORTATION CHARGES PAID AND CLAIMED BY HIM COUL D NOT HAVE BEEN VERIFIED AND PROVED. ENGAGEMENT OF SUCH A LARGE NUMBER OF TRUCKS MORE TH AN 300 ALSO CREATES DOUBT.ON PERUSAL OF PAPERS, LEDGER ACCOUNT COPY OF TRANSPORTATION CH ARGES FURNISHED BY THE ASSESSEE AT THE TIME OF ORIGINAL ASSESSMENT; IT IS FOUND THAT THE L EDGER HAS BEEN MAINTAINED AS AMOUNT PAID TO DIFFERENT TRUCK OWNERS. NAME AND ADDRESS OF THE TRANSPORTERS HAVE NOT BEE N MENTIONED. THE ASSESSEE DID NOT DEDUCT TAX U/S. 19 4C OF THE ACT ON PAYMENT OF TRANSPORTATION CHARGES AND COMMISSION. IT APPEARS THAT BY FURNISHING SUCH A LARGE NUMBER OF TRUCK NUMBERS (ABOUT 300) STATED TO HAVE BEEN US ED BY HIM, THE ASSESSEE HAS TRIED TO ESCAPE THRESHOLD LIMIT OF RS.50,000/- AND PROTECT H IMSELF FROM THE PURVIEW OF TDS DEDUCTIBLE U/S.194C OF THE ACT. AS THE ASSESSEE HA S FAILED TO DEDUCT TAX ON PAYMENT OF RS.45,74,228/- AS TRANSPORTATION CHARGES AND COMMIS SION U/S. 194C OF THE ACT , THE SAID SUM OF RS.45,74,228/- IS, THEREFORE, DISALLOWED U/S . 40(A)(IA) OF THE ACT. FROM THE PERUSAL OF THE ABOVE CLEAR FINDING RENDERE D BY THE AO IT EMERGES THAT ASSESSEE DURING THE ORIGINAL ASSESSMENT WHICH WAS C ONCLUDED ON 13.05.2008 HAS MADE A CLAIM OF DEDUCTION THAT THE AMOUNT OF RS.45,74,228/ - HAS BEEN GIVEN TO TRUCK OWNERS ABOUT 300 IN NUMBERS AND DETAILS OF IT WERE MENTIONED IN MORE THAN 110 PAGES IN RESPECT TO THE AMOUNT OF FREIGHT PAID AND JUST BECAUSE WORD COMMISSION HAS ALSO BEEN ADD ED IN THE 3CD REPORT ALONG WITH THE HIRING CHARGES TO THE TRANSPO RTERS CANNOT BE THE GROUND ON WHICH THE 4 ITA NO. 57/PAT/2013 SHRI SHYAM SUNDER PRASAD, AY-2006-07 DEPARTMENT CAN TURN AROUND AND TERM THAT THE ENTIRE AMOUNT HAS BEEN PAID FOR COMMISSION AND NOT FOR HIRING CHARGES WHEN THE FACTS EMERGING FROM THE ASSESSMENT LEAVES NO SCOPE FOR ANY DOUBT THAT CLAIM MADE BY THE ASSESSEE WAS FOR H IRING OF TRUCKS AND DISALLOWANCE WAS MADE BY AO INVOKING SECTION 194C OF THE ACT. THEREF ORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A) AND, THEREFORE, WE DISMISS THE APPEAL FILED BY THE REVENUE. 5. IN THE CO, THE ASSESSEE HAS ASSAILED THE CONFIRM ATION OF ADDITION OF RS. 5 LACS WHICH HE HAS NOT PRESSED DURING THE TIME OF HEARING OF AP PEAL BECAUSE OF SMALLNESS OF THE AMOUNT, AS WELL AS THE GROUND CHALLENGING THE REOPENING U/S . 147 OF THE ACT. SINCE THE LD. AR OF THE ASSESSEE HAS NOT PRESSED BOTH THE GROUNDS, WE D ISMISS THE SAME AS NOT PRESSED. 6. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AN D THE CROSS OBJECTION OF ASSESSEE ARE DISMISSED. 7. ORDER IS PRONOUNCED IN OPEN COURT ON 05.04.2017 SD/- SD/- (WASEEM AHMED) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 5 TH .|APRIL, 2017 JD. SR. PS / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , / DR, ITAT, PATNA 6. / GUARD FILE. BY ORD ER/ , ASSISTANT REGI STRAR, ITAT, PATNA,