ACIT, Panchkula V. Sh. Baldev Singh Mahindra, Panchkula

ITA 582/CHANDI/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8334 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 27-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Unexplained cash credit; Unexplained investment; Gift
• Section: 194C; 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.582/CHD/2015 (ASSESSMENT YEAR : 2010-11) THE A.C.I.T., VS. SH.BALDEV SINGH MAHINDRA, PANCHKULA CIRCLE, PROP.M/S CHINAR TRADERS, PANCHKULA. H.NO.406, SECTOR 21, PANCHKULA. PAN: ABFPM9062J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. MITTAL, DR RESPONDENT BY : SHRI T.N. SINGLA DATE OF HEARING : 03.02.2016 DATE OF PRONOUNCEMENT : 30.03.2016 O R D E R PER RANO JAIN, A.M . : THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), JAMMU DATED 27.1.2015, RELATING TO ASSES SMENT YEAR 2010-11. 2. GROUND NO.1 RAISED BY THE DEPARTMENT READS AS UNDER: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES, THE LD. C1T(A) HAS ERRED IN DELETING AN ADDITION OF RS.79,25,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENTS U/S 69 OF THE I.T. 2 ACT FOR PURCHASE OF HOUSE AS THE REPLY FILED BY THE ASSESSEE IS ITSELF CONTRADICTORY WITH THE SALE DEED O F THE SAID PROPERTY. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE RETU RN OF INCOME WAS FILED DECLARING AN INCOME OF RS.9, 93 ,330/. THE ASSESSEE HAD MADE INVESTMENT IN THE PURCHASE OF A HOUSE PROPERTY SITUATED AT PANCHKULA AND A SPECIFIC QUERY WAS RAISED BY THE ASSESSING OFFICER ON THE SOURCES OF INVESTMENTS MADE THEREIN. THE REPLY BY THE ASSESSEE BEFORE THE ASSESSING OFFICER WAS THAT IN THE PRECED ING YEAR HIS BROTHER IN LAW SH. BHIM SINGH HAD SOLD A PROPERTY WORTH RS. 70 LAKHS TO ONE SH. AMIT KHANNA. THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS. 54,00,000/ ON 20.06.2008 AS GPA OF SH. AMIT KHANNA AND THE SAME AMOUNT WAS TRANSFERRED TO THE ACCOUNT OF SH. BHIM S INGH DURING THE RELEVANT ASSESSMENT YEAR. THE PROPERTY I N QUESTION WAS PURCHASED BY SH. BHIM SINGH DURING THE YEAR AND NOT BY THE ASSESSEE. THE PAYMENT OF RS. 70 LAKHS WAS MADE BY SH. BHIM SINGH TO THE SELLER. AN AMOUNT OF RS.54,00,000/- WAS PAID BY SH. BHIM SINGH TO THE SE LLER OUT OF THE AMOUNT TRANSFERRED FROM THE ACCOUNT OF T HE ASSESSEE AND REST OF THE AMOUNT WAS PAID BY HIM OUT OF HIS OWN FUNDS. AS REGARDS THE PAYMENT OF REGISTRATI ON FEE IT WAS STATED THAT SH. BHIM SINGH HAS PAID THIS AMO UNT FROM THE LOAN ACCOUNT WITH VIJAYA BANK FOR THE YEAR UNDER CONSIDERATION. SOME OF THE AMOUNTS WERE PAID BY SH. BHIM SINGH OUT OF HIS AGRICULTURAL INCOME FROM THE LAND AT VILLAGE SONKA, DISTT. AMBALA. THE RELEVANT DOCUM ENTARY 3 EVIDENCES IN THE FORM OF VARIOUS BANK ACCOUNTS WERE FILED BEFORE THE ASSESSING OFFICER. IT WAS FURTHER STATE D THAT AFTER PURCHASING THIS PROPERTY SH. BHIM SINGH GIFTE D THE SAME TO THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR. IN THIS REGARD AN AFFIDAVIT OF GIFT BY SH. BHIM SIN GH WAS ALSO PLACED ON RECORD. AFTER CONSIDERING THE SUBMIS SIONS OF THE ASSESSEE, THE ASSESSING OFFICER WAS OF THE V IEW THAT THE ASSESSEE HAD MADE CONFLICTING AND CONTRADICTORY STATEMENTS WITH REGARD TO THE PURCHASE OF PROPERTY. STATING THAT IT WAS AMPLY CLEAR THAT ASSESSEE HAD F AILED TO EXPLAIN THE SOURCE BEHIND THE INVESTMENT MADE IN TH E CASE OF SAID PROPERTY, HE TREATED THE SAID INVESTME NT MADE BY THE ASSESSEE AS AN UNEXPLAINED INVESTMENT IN TER MS OF SECTION 69 OF THE INCOME TAX ACT AND MADE AN ADDITI ON OF RS.79,25, 000/. 4. BEFORE THE CIT(A), THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AO AND AGAIN WITH THE H ELP OF DOCUMENTARY EVIDENCES IN THE FORM OF BANK ACCOUN TS OF BOTH THE ASSESSEE AS WELL AS OF SH. BHIM SINGH, SAL E AND PURCHASE DEED, AFFIDAVIT OF SH. BHIM SINGH ETC., TH E ASSESSEE TRIED TO EXPLAIN THAT THE LAND WAS PURCHAS ED BY HIS BROTHER-IN-LAW SH. BHIM SINGH AND WAS LATER ON GIFTED TO THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR . THE SOURCES OF FUNDS OUT OF WHICH THE PROPERTY WAS PURC HASED WAS ALSO EXPLAINED TO THE CIT (A). AFTER CONSIDERIN G ALL THE DOCUMENTARY EVIDENCES THE CIT (A) ALLOWED THE APPEA L OF THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO DELETE 4 THE ADDITION OF RS.79,25,000/. THIS WAS HELD BY TH E COMMISSIONER AFTER TAKING INTO ACCOUNT THE BANK ACC OUNTS MAINTAINED BY THE ASSESSEE AND SH. BHIM SINGH. HE W AS OF THE VIEW THAT THE ENTIRE TRANSACTION OF INVESTME NT IN PROPERTY HAS BEEN ROUTED THROUGH THE SAID BANK ACCO UNTS. THE FACT IS THAT IN THE EARLIER YEAR, SH. BHIM SING H WAS HOLDING THE POWER OF ATTORNEY FROM SH. AMIT KHANNA FROM WHOM THE PROPERTY HAS BEEN PURCHASED. HE WAS ALSO OF THE VIEW THAT NO DOUBT THAT REGISTRATION OF THE SAI D PROPERTY WAS GOT DONE IN THE NAME OF THE ASSESSEE A S IT WOULD HAVE BEEN THE INTENTION OF SH. BHIM SINGH TO GIVE THIS PROPERTY TO THE ASSESSEE. 5. AGGRIEVED BY THE SAID DECISION OF THE CIT (A), THE DEPARTMENT HAS COME IN APPEAL BEFORE US. LD. DR WHI LE ARGUING BEFORE US RELIED ON THE ORDER OF THE AO AND FURTHER SUBMITTED THAT THE WHOLE TRANSACTION OF PUR CHASE AND SALE OF PROPERTY DOES NOT SEEM TO BE REAL. THE FUNDS ARE COMING FROM ONE BANK ACCOUNT TO ANOTHER WHICH R AISES DOUBT TO THE FACT THAT ACTUALLY THE CONSIDERATION W AS PAID BY SHRI. BHIM SINGH AND LATER ON THE SAID PROPERTY WAS GIFTED TO THE ASSESSEE. 6. LD. COUNSEL OF THE ASSESSEE RELYING ON THE ORDE R OF CIT (A) DREW OUR ATTENTION TO THE PAPER BOOK FIL ED BY HIM. OUT OF THE TWO BANK STATEMENTS, ONE RELATED TO THE ASSESSEE AND AT THE OTHER TO SH. BHIM SINGH, IT WAS STATED THAT IN THE PRECEDING YEAR AN AMOUNT OF RS.54 LACS WAS RECEIVED BY THE ASSESSEE IN HIS BANK ACCOUNT AND TH E 5 SAME WAS TRANSFERRED THROUGH VARIOUS CHEQUES AND TRANSFER OF ENTRIES TO THE ACCOUNT OF SH. BHIM SING H. FURTHER IT WAS STATED THAT THE CONSIDERATION FOR PU RCHASE OF PROPERTY WAS GIVEN OUT OF THE BANK ACCOUNT OF SH . BHIM SINGH ONLY. IT WAS AGAIN REITERATED THAT SH. BHIM S INGH HAD ALWAYS THE INTENTION OF GIVING THE PROPERTY TO THE ASSESSEE THEREFORE HE WAS CHOSEN TO BECOME THE GPA AT THE TIME OF PURCHASE OF PROPERTY. IN THIS VIEW IT W AS PRAYED THAT THE ACTION OF THE CIT (A) IN DELETING T HE ADDITION BE CONFIRMED. 7. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIE S BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. TH E SAID ISSUE IN QUESTION HAS BEEN DEALT WITH BY THE CIT AP PEALS IN HIS ORDER AT PAGE 12 PARA-4.2, WHICH READS AS UN DER. 4.2. I HAVE CONSIDERED THE BASIS OF ADDITIONS AS N ARRATED BY THE ASSESSING OFFICER WHILE FRAMING ASSESSMENT AN D ALSO THE DETAILED SUBMISSIONS FILED BY THE APPELLANT'S CO UNSEL ALONG WITH A PAPER BOOK. I HAVE ALSO GIVEN A THOUGHT FUL CONSIDERATION TO THE ARGUMENTS ADVANCED BY THE LD. C OUNSEL FOR THE APPELLANT. THE BASIC ISSUE TO BE DECIDED IS A S TO WHETHER THE AMOUNTS INVESTED FOR THE PURCHASE OF THE HOUSE PROPERTY MENTIONED SUPRA WERE EXPLAINED TO MEET THE REQUIREMENTS OF SECTION 68 OF THE INCOME-TAX ACT, 19 61 OR NOT. THE APPELLANT HAS EXPLAINED IN DETAIL THAT THE HOUSE PROPERTY WAS ACTUALLY PURCHASED BY HIS FATHER-IN-LAW, SH. BHIM SINGH FOR WHICH THE APPELLANT HAD ADVANCED ONLY PART OF T HE AMOUNT. A SUM OF RS. 54.00 LACS WAS AVAILABLE WITH SH . BHIM SINGH OUT OF SALE PROCEEDS OF ANOTHER HOUSE NO. 20, SECTOR-26, URBAN ESTATE, PANCHKULA. COPY OF THE SAID SALE DEED HAS BEEN PLACED ON RECORD. I HAVE ALSO PERUSED T HE BANK 6 ACCOUNTS MAINTAINED BY THE APPELLANT AND APPELLANT'S F ATHER- IN-LAW SH. BHIM SINGH. FROM PERUSAL OF THE BANK ACCO UNTS, IT REVEALS THAT THE ENTIRE TRANSACTION OF INVESTMENT OF RS. 70.00 LACS HAS BEEN ROUTED THROUGH THE SAID BANK ACCOUNTS AND THERE ARE VIRTUALLY NO OTHER CREDITS / DEBITS OTHER THAN RELATING TO THE SALE AND PURCHASE OF THE TWO PROPER TIES MENTIONED SUPRA. SH. BHIM SINGH WAS HOLDING A POWER O F ATTORNEY FROM SH. AMIT KHANNA FROM WHOM THE PROPERTY HAS BEEN PURCHASED. NO DOUBT THE REGISTRATION OF THE SAID PROPERTY WAS GOT DONE IN THE NAME OF THE APPELLANT AS THIS WOULD HAVE BEEN THE INTENTION OF SH. BHIM SINGH TO GIF T THIS PROPERTY TO HIS SON-IN-LAW FOR WHICH HE HAS FILED AN A FFIDAVIT DATED 05.08.2009 PLACED AT PAGES 72 TO 73 OF THE PA PER BOOK. VIDE THE SAID AFFIDAVIT, SH. BHIM SINGH HAS AFF IRMED THAT HE HAS GIFTED THE SAID PROPERTY TO SH. BALDEV SINGH, THE APPELLANT IN THIS CASE. AS I HAVE MENTIONED ABOVE THA T OUT OF A SUM OF RS. 70.00 LACS, RS. 54.00 LACS WAS AVAILABLE W ITH SH. BHIM SINGH ON ACCOUNT OF SALE PROCEEDS OF A PROPERTY AND IN ADDITION TO THIS A SUM OF RS. 20.00 LACS WAS CONTRIBUT ED BY THE APPELLANT BY RAISING A LOAN FROM VIJAYA BANK, TH E DETAILS OF WHICH HAVE ALSO BEEN FILED BEFORE ME. THUS, AS FAR AS THE SOURCE OF INVESTMENT OF RS. 70.00 LACS ON THE PURCHASE OF THE SAID PROPERTY IS CONCERNED, THERE SEEMS TO BE NO DOU BT WITH RESPECT TO THE AVAILABILITY OF FUNDS WITH SH. BHIM S INGH. MERELY BECAUSE THE REGISTRATION OF THE SAID PROPERTY H AS BEEN EXECUTED IN FAVOUR OF SH. BALDEV SINGH FOR WHIC H ALSO THE CIRCUMSTANCES HAS DULY BEEN EXPLAINED, IT CAN NOT BE HELD THAT THE FUNDS AVAILABLE WITH SH. BHIM SINGH WERE NOT UTILIZED FOR THE PURCHASE OF THE SAID PROPERTY IN THE NAME OF THE APPELLANT ALTHOUGH THE POWER OF ATTORNEY WAS IN FAVOUR OF SH. BHIM SINGH. AS REGARDS THE INVESTMENT OF RS. 9,25,000/-, THE FACTUAL POSITION HAS BEEN EXPLAINED T HAT OUT OF THIS A SUM OF RS. 4,50,0007- WAS WITHDRAWN BY HIM ON 12.06.2009 FROM HIS ACCOUNT NO. 830401141000016 WIT H VIJAY BANK AND BALANCE WAS CONTRIBUTED BY SH. BHIM S INGH OUT OF HIS AGRICULTURAL INCOME FROM ABOUT 54 ACRES O F HIS FAMILY AGRICULTURAL LAND AT VILLAGE SONTA, DISTRICT AM BALA. THE 7 ASSESSING OFFICER'S OBSERVATION THAT THE AFFIDAVIT IS BEFORE THE DATE OF REGISTRATION DOES NOT, IN MY VIEW, CHANGE THE SITUATION. AS FAR AS THE DEPARTMENT IS CONCERNED IT HA S TO BE EXAMINED AS TO WHETHER THE SOURCE OF INVESTMENT IN T HE IMPUGNED PROPERTY IS DULY EXPLAINED OR NOT. I HAVE GONE THROUGH THE COPIES OF BANK ACCOUNTS FURNISHED BY TH E APPELLANT AND FIND THAT THE PAYMENTS TO SH AMIT KHAN NA, THE SELLER OF THE PROPERTY ARE DULY REFLECTED AND THE D EPOSITS HAVE ALSO BEEN DULY EXPLAINED BY THE APPELLANT. THE ASSESSING OFFICER HAS FAILED TO BRING ANY EVIDENCE ON RECORD THAT THE PAYMENTS TO SH. AMIT KHANNA REFLECTED IN T HEIR BANK ACCOUNTS WERE FOR ANY OTHER PURPOSE THAN THE PAYMENT TOWARDS CONSIDERATION OF THE PROPERTY. AFTER GIVING A THOUGHTFUL CONSIDERATION AND ALSO APPRECIATING TH E SUBMISSIONS AND THE RELEVANT DOCUMENTS FILED IN SUP PORT OF THEIR CONTENTION, I AM SATISFIED THAT NECESSARY INGR EDIENTS OF SECTION 68 HAVE BEEN DULY FULFILLED AND I, THEREFORE, DIRECT THE DELETION OF THIS SUM OF RS.79,25,000/-. THE APPELLANT , THUS SUCCEEDS ON THIS GROUND. SO FAR THE SOURCE OF INVESTMENT FROM AGRICULTURAL IN COME AND THE INCIDENCE OF TAX ON SH. BHIM SINGH ON SALE OF PLOT FOR RS. 54 LACS, ARE CONCERNED IT MAY BE TAKEN UP WITH THE AO HAVING JURISDICTION OVER HIM FOR VERIFICATION AND NEC ESSARY ACTION. 8. AFTER PERUSING THE SAME, WE DO NOT FIND ANY INFIRMITY IN THE SAID FINDING GIVEN BY THE CIT (A). FROM THE BANK ACCOUNTS MAINTAINED BY BOTH THE ASSESSEE AS WE LL AS SH. BHIM SINGH IT IS BECOMING QUITE CLEAR THAT IN T HE EARLIER YEAR AT THE TIME OF SALE OF PROPERTY THE AS SESSEE WAS HELD TO BE THE GPA OF SELLER. THE CONSIDERATION TO THE EXTENT OF RS. 54 LACS CAME TO THE ACCOUNT OF THE AS SESSEE WHICH WAS LATER ON TRANSFERRED TO THE ACCOUNT OF SH . BHIM SINGH. THE SAME AMOUNTS WERE TRANSFERRED TO THE VEN DOR 8 AT THE TIME OF THE PURCHASE OF THE PROPERTY IN QUES TION BY SH. BHIM SINGH. THIS GOES TO PROVE THAT THE AMOUNT USED FOR PURCHASE OF PROPERTY WAS ACTUALLY AVAILABLE WIT H SH. BHIM SINGH OUT OF SALE PROCEEDS OF PROPERTY WHICH CONTRIBUTED IN PURCHASING THE IMPUGNED PROPERTY. EV EN THE SOURCE OF REMAINING SALE CONSIDERATION AS WELL AS THE STAMP DUTY CHARGES ETC. ARE EXPLAINABLE FROM THE BA NK ACCOUNT OF SHRI. BHIM SINGH. FURTHER IN VIEW OF THE AFFIDAVIT FILED BY SH. BHIM SINGH THAT THE SAID PRO PERTY HAS BEEN GIFTED BY HIM TO THE ASSESSEE, THE SAME CA NNOT BE QUESTIONED IN THE ABSENCE OF ANY CONTRADICTORY F INDING GIVEN BY THE ASSESSING OFFICER. THE SOURCE OF INVES TMENT IN THE PROPERTY IS THEREFORE DULY EXPLAINED. IN THI S VIEW, WE ARE SATISFIED THAT THE ASSESSEE HAS BEEN ABLE TO EXPLAIN THE SOURCE OF INVESTMENT IN THE SAID PROPERTY THERE FORE THE ADDITION UNDER SECTION 68 OF THE ACT CANNOT BE SUS TAINED. GROUND RAISED BY THE DEPARTMENT IS DISMISSED. 9. THE GROUND NO. 2 RAISED BY THE DEPARTMENT READS AS UNDER; 2. WHETHER ON THE FACT AND CIRCUMSTANCES, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. LL,86,300/ -ON ACCOUNT OF NON DEDUCTION OF TDS U/S 40(A)(IA) OF THE I.T. ACT ON PAYMENT OF FREIGHT CHARGES AS THE ASSESS EE HAS RECOVERED TDS FROM THE DEDUCTED BUT NOT DEPOSIT ED IN THE CENTRAL GOVT. ACCOUNT ON DUE DATE. 10. THE ASSESSING OFFICER, DURING THE ASSESSMENT PROCEEDINGS, NOTICED THAT DURING THE COURSE OF HIS BUSINESS THE ASSESSEE HAD MADE CERTAIN PAYMENTS ON 9 ACCOUNT OF FREIGHT AND TDS HAS NOT BEEN DEDUCTED ON SUCH PAYMENTS. THEREFORE DISALLOWANCE OF SUCH PAYMENTS W ERE MADE BY THE ASSESSING OFFICER INVOKING THE PROVISIO NS OF SECTION 40 (A)(IA) OF THE ACT. THE REPLY OF THE AS SESSEE WAS THAT HE HAS DEDUCTED TDS ON THE TOTAL PAYMENTS MADE AND HAS DEPOSITED THE SAME TO THE GOVERNMENT TREASURY. THE DETAILS OF FREIGHT PAID WERE FILED BEFORE THE ASSES SING OFFICER. IT WAS FURTHER CONTENDED THAT THE PAYMENTS WERE MADE ON THE BASIS OF INDIVIDUAL GRS ISSUED BY THE TRUCK OWNERS FOR EACH TRIP. RESPECTIVE LEDGER ACCOUNTS WE RE ALSO FILED BEFORE THE ASSESSING OFFICER. THE ASSESSING O FFICER WAS OF THE VIEW THAT THE CONTENTION OF THE ASSESSEE THAT THE PAYMENTS WERE MADE ON THE BASIS OF INDIVIDUAL G RS ISSUED BY THE TRUCK OWNERS FOR EACH TRIP IS NOT BAS ED ON FACTS. IN THIS SCENARIO THE ASSESSING OFFICER MADE THE DISALLOWANCE UNDER SECTION 40 (A)(IA) OF THE ACT. 11. BEFORE THE CIT (A) ALSO THE SAME SUBMISSIONS WERE REITERATED. AFTER PERUSING THE SUBMISSION OF T HE ASSESSEE THAT CIT (A) DELETED THE DISALLOWANCE MADE BY THE AO. ON PERUSAL OF THE DETAILS OF FREIGHT FILED BY T HE ASSESSEE THE CIT(A) WAS OF THE OPINION THAT ASSESSE E HAS DEDUCTED TDS AT THE RATE OF 2% ON THE PAYMENTS MADE AND HAD DEPOSITED THE SAME VIDE TWO DIFFERENT CHALLANS OF RS. 19,000 AND 13,500 EACH. HE WAS OF THE VIEW THAT THE RE IS NOTHING ON RECORD TO SHOW THAT THERE WAS ANY WRITTE N OR ORAL AGREEMENT WITH THE TRUCK OWNERS EXCEPT THAT OF GRS 10 ISSUED SEPARATELY FOR EACH CONSIGNMENT. IN THIS WAY THIS ADDITION WAS DELETED. 12. AGGRIEVED BY THIS THE DEPARTMENT HAS COME IN APPEAL BEFORE US. LD.DR RELIED ON THE ORDER OF THE AO , WHILE THE LD. COUNSEL OF THE ASSESSEE PREFERRED TO RELY ON THE ORDER OF THE CIT (A). 13. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIE S BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. TH E SAID ISSUE HAS BEEN DEALT BY THE CIT (A) AT HIS ORDER AT PAGE 13 PARA 4.3 WHICH READS AS UNDER: 4.3. AS REGARDS NEXT GROUND WHICH RELATES TO DISALLO WANCE OF EXPENDITURE INCURRED UNDER THE HEAD , 'FREIGHT' BY RESORT TO PROVISIONS OF SEC. 40(A)(IA). THE APPELLANT HAS MADE D ETAILED SUBMISSIONS. THE APPELLANT HAS ALSO FILED THE DETAI LS OF FREIGHT PAID. THE APPELLANT HAS CONTENDED THAT HE H AS DEDUCTED TDS ON THE TOTAL PAYMENTS MADE AND HAS DEPO SITED THE SAME TO THE GOVT. TREASURY. DETAILS OF BOTH THE CONCERNS VIZ. M/S UNIVERSAL FABRICATORS AND M/S CHINA TRADERS H AVE BEEN FILED BY THE APPELLANT AND HAVE BEEN PERUSED BY ME. PERUSAL OF THE DETAILS OF FREIGHT REVEALS THAT THE AP PELLANT HAS DEDUCTED TDS @ 2% ON THE PAYMENTS MADE AND HAS DEPOSITE D THE SAME VIDE TWO DIFFERENT CHALLAN VIZ RS. 19,000/- IN RESPECT OF M/S UNIVERSAL FABRICATORS AND RS. 13,500/- IN RESPECT OF M/S CHINAR TRADERS. FURTHER, THERE IS NOTH ING ON RECORD TO SHOW THAT THERE WAS ANY WRITTEN OR ORAL A GREEMENT WITH THE TRUCK OWNERS EXCEPT THE FR ISSUED SEPARATEL Y FOR EACH CONSIGNMENT. THERE IN A FORCE IN THE PLEA OF THE APPELLANT THAT THERE WAS NO LIABILITY FOR DEDUCTION OF TDS ON FREIGHT. THUS, NO DISALLOWANCE WAS WARRANTED BY RESORT TO PROVISIONS OF SEC. 40(A)(IA). 11 14. ON PERUSAL OF THE SAME WE DO NOT FIND ANY INFIRMITY IN THE FINDING GIVEN BY THE CIT (A). THIS IS A FACT ON RECORD THAT THE ASSESSEE HAD ACTUALLY DEDUCTED T DS AT THE RATE OF 2% ON THE PAYMENTS MADE AND HAS DEPOSIT ED THE SAME BY TWO CHALLANS. THERE IS ALSO WEIGHT IN T HE CONTENTION OF THE ASSESSEE THAT THERE WAS NO WRITTE N OR ORAL AGREEMENT WITH THE TRUCK OWNERS EXCEPT FOR THE GRS ISSUED SEPARATELY FOR EACH CONSIGNMENT. IN THIS VIE W THE TDS UNDER SECTION 194C IS NOT REQUIRED TO BE DEDUCT ED. RELIANCE PLACED BY THE LD. COUNSEL OF THE ASSESSEE ON THE JUDGEMENT OF THE HIGH COURT OF PUNJAB AND HARYANA I N THE CASE OF CIT VERSUS BHAGWATI STEEL IS NOT OUT OF PLA CE. IN VIEW OF THE ABOVE,WE CONFIRM THE ACTION OF THE CIT (A) IN DELETING THE ADDITION MADE BY AO. GROUND RAISED BY THE DEPARTMENT IS DISMISSED. 15. GROUND NO. 3 OF THE DEPARTMENT READS AS UNDER: 3. WHETHER ON THE FACTS AND CIRCUMSTANCES, THE LD. C1T(A) HAS ERRED IN DELETING THE ADDITION OF RS. 24,000/- ON ACCOUNT OF NON DEDUCTION OF TDS U/S 40(A)(IA) OF THE I.T. ACT ON PAYMENT OF ACCOUNTING CHARGES AS IT COULD AS IT COULD NOT BE VERIFIED FROM TH E BOOKS OF ACCOUNTS OF THE ASSESSEE. 16. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT HAS MADE AN ADDITION OF RS.24,000/- ON ACCOUNT OF ACCOUNTING CHARGES CLAIMED BY THE ASSESS EE, STATING THAT NO TDS HAS BEEN DEDUCTED ON THE SAME A ND THEREFORE PROVISIONS OF SECTION 40(A)(IA) ARE APPLI CABLE ON THE SAME. THE REPLY OF THE ASSESSEE BEFORE THE ASSE SSING 12 OFFICER AS WELL AS BEFORE THE CIT (A) WAS THAT THE ACCOUNTING CHARGES OF RS. 24,000/ WERE PAID TO THE PART- TIME ACCOUNTANT AS REMUNERATION AT THE RATE OF RS.2 ,000/ PER MONTH. THESE EXPENSES WERE IN FACT PAID DURING THE YEAR TO THE PART-TIME ACCOUNTANT ON WHICH NO TAX IS REQUIRED TO BE DEDUCTED AT SOURCE EITHER UNDER SECT ION 192 OR 194J OF THE INCOME TAX ACT. THE AO DID NOT F IND HIMSELF IN AGREEMENT WITH THE SUBMISSION OF THE ASS ESSEE WHILE THE CIT (A) ALLOWED THE APPEAL OF THE ASSESSE E WITH REGARD TO THIS GROUND. 17. AGGRIEVED BY THIS THE DEPARTMENT HAS COME IN APPEAL BEFORE US. LD. DR RELIED ON THE ORDER OF THE AO WHILE THE LD. COUNSEL OF THE ASSESSEE RELIED ON THE ORDER OF THE CIT (A). 18. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIE S BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. TH E CIT (A) HAS DEALT WITH THIS GROUND AT THE BOTTOM OF PAG E 13 WHICH READ AS UNDER: AS REGARDS ADDITION MADE ON ACCOUNT OF REMUNERATION PAID TO A PART-TIME ACCOUNTANT @ RS. 2,000/- PER MO NTH, THE APPELLANT'S COUNSEL CONTENDED THAT NO TAX WAS DEDUC TIBLE ON SUCH PAYMENTS AS PROVISIONS OF SEC. 192 OR 194J WER E NOT APPLICABLE. I HAVE PERUSED THE RELEVANT PROVISIONS AND FOUND MERIT IN THE CONTENTION OF THE APPELLANT. THUS, THE APP ELLANT SUCCEEDS ON THESE GROUNDS AND THE DISALLOWANCES MA DE AT RS.11,86,300/- AND RS. 24,000/- BY RESORT TO PROVIS IONS OF 13 SEC. 40(A)(IA) ARE HEREBY DIRECTED TO BE DELETED. T HE APPELLANT THUS GETS A RELIEF OF RS. 12,10,300/-. 19. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF T HE CIT APPEALS WITH REGARD TO THIS GROUND. THE CONTENT ION OF THE ASSESSEE ALL ALONG HAS BEEN THAT THE PAYMENT HA S BEEN MADE TO THE PART-TIME ACCOUNTANT AT THE RATE OF RS.24,000/- PER MONTH. IT GOES TO SHOW THAT THE ACCOUNTANT IS NOT AT THE PAYROLL OF THE ASSESSEE, N O TDS IS REQUIRED TO BE DEDUCTED UNDER SECTION 192 ON ACCOUN T OF SALARY. EVEN THE PROVISIONS OF SECTION 194J OF THE ACT ARE NOT APPLICABLE ON THE SAID PAYMENT AS THE SAID WORK AND PAYMENT THEREOF IS NOT IN THE NATURE OF FEE FOR TEC HNICAL SERVICES. THEREFORE, WE CONFIRM THE ORDER OF THE C IT (A) IN THIS REGARD. GROUND RAISED BY THE DEPARTMENT IS DISMISSED. 20. GROUND NO.4 RAISED BY THE DEPARTMENT READS AS UNDER: 4. WHETHER ON THE FACT AND CIRCUMSTANCES, THE LD. C 1T(A) HAS ERRED IN DELETING THE ADDITION OF RS. 6,53,646/- ON ACCOUNT OF UNEXPLAINED CASH CREDITS U/S 68 OF THE I. T. ACT AS SHOWN IN BANK ACCOUNT OF VIJYA BANK OF THE ASSESSEE. 21. THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS.6,53,646/ ON ACCOUNT OF UNEXPLAINED CASH CREDIT ENTRY APPEARING IN THE BANK ACCOUNT OF THE ASSESSEE . THE EXPLANATION OF THE ASSESSEE WAS THAT THIS ENTRY WAS IN ACTUAL CHEQUE ISSUED AND ON THE SAME DAY CANCELLED BY 14 THE BANK DUE TO SOME REASONS AND THE AMOUNT CREDITE D BACK TO THE ASSESSEE IS BANK ACCOUNT. REJECTING THE CONTENTION OF THE ASSESSEE THE ASSESSING OFFICER PR EFERRED TO MAKE AN ADDITION OF RS.6,53,646/. 22. BEFORE THE CIT (A) WITH THE HELP OF COPY OF TH E BANK ACCOUNT OF THE ASSESSEE, THE ASSESSEE TRIED TO EXPLAIN THAT IT IS ONLY AN TRANSFER ENTRY BY WAY OF REVERSAL OF A CHEQUE AND IN FACT THERE IS NO ACTUAL CASH CRE DIT. CONVINCED BY THE CONTENTION OF THE ASSESSEE THE CIT (A) DELETED THE ADDITION MADE BY THE AO. 23. AGGRIEVED BY THIS, THE DEPARTMENT HAS COME IN APPEAL BEFORE US. LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER, WHILE LD. COUNSEL OF THE ASSESSE E RELIED ON ORDER OF CIT (A). 24. THIS ISSUE HAS BEEN DEALT BY THE CIT (A) ON TH E LAST PAGE OF HIS ORDER AT PARAGRAPH 4.4 WHICH READS AS UNDER: 4.4 VIDE THE LAST GROUND OF APPEAL, THE APPELLANT I S AGITATED AGAINST THE ADDITION OF RS.6,53,646/- ON AC COUNT OF UNEXPLAINED CASH CREDITS IN BANK ACCOUNT NO.83401011001623. THE APPELLANT HAS CONTENDED TH AT IT IS ONLY A TRANSFER ENTRY BY WAY OF REVERSAL OF A CHE QUE AND INFACT, THERE IS NO ACTUAL CASH CREDIT. THE APPELLA NT HAS FILED COPY OF THE BANK ACCOUNT WHICH SHOWS THAT A CHE QUE HAS BEEN ISSUED EARLIER WHICH HAS BEEN RETURNED BAC K AS CANCELLED. THUS, IN A WAY, IT IS ONLY A CONTRA ENTRY. I HAVE PERUSED THE BANK ACCOUNT AND FIND THAT THERE IS NO S UCH CREDIT OF RS. 6,53,646/- AND THUS, THE ADDITION MADE IS 15 HEREBY DIRECTED TO BE DELETED. THE APPELLANT SUCCEEDS ON THIS COUNT AND GETS A RELIEF OF RS. 6,53,646/-. 25. ON PERUSAL OF THE ORDER OF THE CIT (A) WE DO N OT FIND ANY INFIRMITY IN THE SAME. A COPY OF THE BANK ACCOUNT WAS ALSO SHOWN TO US DURING THE COURSE OF HEARING WHEREBY WE COULD SEE THAT AN AMOUNT OF RS. 6, 53, 6 46 WAS SOME CHEQUE ISSUED AND THE SAME WAS LATER ON TH E REVERSED BY THE BANK. THEREFORE WE FIND THE CONTENT ION OF THE ASSESSEE TO BE TRUE THAT THIS IS NOT ACTUALLY S OME CASH CREDIT ENTRY BUT ONLY THE REVERSAL OF A CHECK. IN T HIS VIEW WE DO NOT FIND ANY NEED BY AO TO MAKE SUCH ADDITION . GROUND RAISED BY THE DEPARTMENT IS DISMISSED. 26. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF MARCH, 2016. SD/- SD/- (H.L.KARWA) (RANO JAIN) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 30 TH MARCH, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE D R. ASSISTANT REGISTRAR, ITAT, CHANDIGARH