Jayprakash Parasramka, Kolkata V. CIT - XIV, Kolkata, Kolkata

ITA 597/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54619 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 24-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR SINGH
• Assessee Lawyers: S S GUPTA
• Keywords: Business income
• Section: 143(3); 194C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND , . ! . '# ) [BEFORE SRI MAHAVIR SINGH, JM & SHRI C. D. RAO, AM] $ $ $ $ / I.T.A NO. 597/KOL/2010 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEAR: 2005-06 JAYPRAKASH PARASRAMKA VS COMMISSIONER OF INCOME- TAX, (PAN-AFOPP 9527 J) KOL-XIV, KOLKATA. (*+ /APPELLANT ) (,-*+/ RESPONDENT ) DATE OF HEARING : 24.10.2011 DATE OF PRONOUNCEMENT: 24.10.2011 FOR THE APPELLANT: SHRI S. S. GUPTA FOR THE RESPONDENT: SHRI AJAY KUMAR SINGH '. / ORDER PER MAHAVIR SINGH, JM ( , , , , ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF REVISION ORDER OF CIT-XIV, KOLKATA PASSED U/S. 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERR ED TO AS THE ACT) IN M. NO.CIT- XIV/KOL/263/JPP/09-10/6898-900 DATED 27.01.2010/10. 02.2010. ASSESSMENT WAS FRAMED BY ITO, WARD-40(3), KOLKATA U/S.143(3) OF THE ACT, 196 1 FOR ASSESSMENT YEAR 2005-06 VIDE HIS ORDER DATED 20.12.2007. 2. THE SOLE LEGAL ISSUE RAISED BY ASSESSEE AGAINST THE REVISION ORDER OF CIT PASSED U/S. 263 OF THE ACT IS THAT THE ASSESSEE BEING AN INDIVIDUAL IS NOT LIABLE TO DEDUCT TAX U/S. 194C(1) OF THE ACT AND ACCORDINGLY DIRECTIONS OF CIT FOR DISALLOWA NCE U/S. 40(A)(IA) OF THE ACT IS UNCALLED FOR. FOR THIS, ASSESSEE HAS RAISED FOLLOWING SIX EFFECTI VE GROUNDS: 1. THAT THE LD. C.I.T. ERRED IN LAW AS WELL AS IN FACTS IN PASSING THE ORDER U/S. 263 OF THE INCOME TAX ACT, 1961. 2. THAT THE LD. CIT. ERRED IN HOLDING THAT THE ASSE SSMENT ORDER AS PASSED BY THE LD. AO IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF TH E REVENUE IS AS MUCH IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE NO SUCH ORDER W AS AT ALL CALLED FOR. 3. THAT THE SHOW CAUSE NOTICE ISSUED U/S. 263 IS BA D IN LAW IN AS MUCH AS IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSMENT ORDER PASSED BY THE ID. AO IS NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. 2 ITA 597/K/201 0 JAYPRAKASH PARASRAMKA. A.Y. 05-06 4. THAT THE LD. C.I.T. ERRED IN LAW AS WELL AS IN F ACTS IN OBSERVING THAT THE APPELLANT WAS LIABLE TO DEDUCT TAX AT SOURCE U/S. 194C (2) OF THE INCOME TAX ACT, 1961 ON PAYMENT OF EMBROIDERY CHARGES OF RS. 40,45,196/- IN AS MUCH AS IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PROVISIONS OF SEC. 1 94C(2) WERE NOT AT ALL APPLICABLE M CASE OF APPELLANT. 5. THAT THE LD. C.I.T. ERRED IN LAW AS WELL AS IN F ACTS IN OBSERVING THAT THE IMPUGNED ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO TH E INTERESTS OF REVENUE, AS THE AO HAS FAILED TO DISALLOW EXPENDITURE OF RS. 40,45,196/- U NDER THE PROVISIONS OF SEC. 40(A)(IA) READ WITH SEC. I 94C OF THE INCOME TAX ACT, 1961 IN AS MUCH AS IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE PROVISIONS OF SEC. 19 4C R/W SEC. 40(A)(IA) OF THE INCOME TAX ACT, 1961 WERE NOT APPLICABLE TO THE APPELLANT. 6. THAT THE LD. C.I.T. ERRED IN LAW AS WELL AS IN F ACTS IN DIRECTING THE LD AO. TO PASS A FRESH ASSESSMENT ORDER AFTER DISALLOWING THE CLAIM OF PAYMENT OF EMBROIDERY CHARGES OF RS. 40,45,196/- U/S. 40(A)(IA) R/W SEC. 194C OF THE INCOME TAX ACT, 1961 IN AS MUCH AS IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE NO SUCH DIRECTION WAS AT ALL CALLED FOR. 3. AT THE OUTSET, ASSESSEE CONTENDED THAT DIRECTION S OF CIT IN REVISION ORDER U/S. 263 OF THE ACT FOR MAKING DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT FOR THE REASON THAT THE ASSESSEE WAS LIABLE TO DEDUCTION OF TAX AT SOURCE IN RESPEC T OF EMBROIDERY CHARGES. ACCORDING TO ASSESSEE, THE PROVISION OF SECTION 194C(1) OF THE A CT, AS IT STOOD PRIOR TO ITS AMENDMENT W.E.F. 01.06.2007, DO NOT APPLY IN THE CASE OF AN INDIVIDU AL AND THEREFORE, THERE BEING NO LIABILITY FOR DEDUCTION OF TAX AT SOURCE BY THE ASSESSEE DURING T HE RELEVANT ASSESSMENT YEAR, CIT WRONGLY ASSUMED FAILURE ON THE PART OF THE ASSESSEE TO DEDU CT TAX AT SOURCE ON THE PAYMENTS TO LABOURERS FOR EMBROIDERY CHARGES. ON THE OTHER HAND, LD. CIT, DR RELIED ON THE REVISION ORDER OF CIT. 4. AFTER HEARING RIVAL SUBMISSIONS AND GOING THROUG H FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT ASSESSEE BEING AN INDIVIDUAL FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2005- 06 ON 31.10.2005. THE ASSESSING OFFICER COMPLETED ASSESSMENT U/S. 143(3) OF THE ACT. THE CIT FROM PERUSAL OF RECORDS NOTICED THAT THE ASSESS EE HAS MADE PAYMENT OF EMBROIDERY CHARGES OF RS.40,45,196/- AND THE ASSESSEE FAILED TO DEDUCT TAX IN TERMS OF SECTION 194C(1) OF THE ACT, CONSEQUENTLY THE ENTIRE EMBROIDERY CHARGES ARE TO B E DISALLOWED. ADMITTEDLY, THE ASSESSEE IS AN INDIVIDUAL AND FALLS U/S. 194C(1) OF THE ACT AND TH E SAME IS NOT DISPUTED BY THE REVENUE. THE ASSESSEE HAS PAID EMBROIDERY CHARGES AND FILED DETA ILS OF THE SAME ALONG WITH FULL NAMES AND ADDRESSES OF THE PARTIES, MAINLY WHO WERE LABOURERS . CIT WAS OF THE VIEW THAT TAX WAS DEDUCTIBLE AT SOURCE UNDER THE PROVISION OF SECTION 194C(1) OF THE ACT FROM THE EMBROIDERY CHARGES PAYMENT. BUT NOW, WE FIND THAT THIS ISSUE HAS BEEN SETTLED BY THIS BENCH OF TRIBUNAL, KOLKATA IN THE CASE ACIT VS SMT. KEYA SETH IN ITA N O.842 & 843/K/2010 FOR ASSESSMENT 3 ITA 597/K/201 0 JAYPRAKASH PARASRAMKA. A.Y. 05-06 YEARS 2006-07 & 2007-08 VIDE ORDER DATED 11.03.2011 , WHEREIN EXACTLY THE SAME ISSUE HAS BEEN DECIDED AS UNDER: 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. IT IS AN ADMITTED POSITION THAT THE ASSESSEE AN INDIVIDUA L CARRYING ON THE BUSINESS OF AYURVEDIC (COSMETIC DIVISION) AND THE CONSULTANCY ON BEAUTICI AN AND ALSO RELATED THERAPIES . AS CLAIMED BY THE ASSESSEE, WHETHER THE PROVISIONS OF SECTION 194 (1) AS EXISTED IN ASSESSMENT YEARS 2006-07 & 2007-08 WILL APPLY TO THE ASSESSEE OR NOT? ADMITTED LY, ASSESSEE HAS NOT DEDUCTED ANY TDS ON ADVERTISEMENT PAYMENT AND ACCORDING TO HER, PROVISI ONS OF SECTION 194C(1) AS EXISTED IN THE RELEVANT ASSESSMENT YEARS WILL NOT OBLITERATE ANY D UTY ON ASSESSEE TO DEDUCT TDS. NOW, WE HAVE TO EXAMINE THIS. THE RELEVANT PROVISIONS OF SECTION 194C(1) & (2) AS EXIST IN ASSESSMENT YEAR 2006-07 & 2007-08 READS AS UNDER :- (1) ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO A NY RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE CONTRACTOR) FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK) IN PURSUANCE O F A CONTRACT BETWEEN THE CONTRACTOR AND-- (A) THE CENTRAL GOVERNMENT OR ANY STATE GOVERNMENT ; OR (B) ANY LOCAL AUTHORITY ; OR (C) ANY CORPORATION ESTABLISHED BY OR UNDER A CENTR AL, STATE OR PROVINCIAL ACT ; OR (D) ANY COMPANY, OR (E) ANY CO-OPERATIVE SOCIETY ; OR (F) ANY AUTHORITY, CONSTITUTED IN INDIA BY OR UNDER ANY LAW, ENGAGED EITHER FOR THE PURPOSE OF DEALING WITH AND SATISFYI NG THE NEED FOR HOUSING ACCOMMODATION OR FOR THE PURPOSE OF PLANNIN G, DEVELOPMENT OR IMPROVEMENT OF CITIES, TOWNS AND VILLAGES, OR FO R BOTH ; OR (G) ANY SOCIETY REGISTERED UNDER THE SOCIETIES REGI STRATION ACT, 1860 (21 OF 1860), OR UNDER ANY LAW CORRESPONDING TO THAT AC T IN FORCE IN ANY PART OF INDIA ; OR (H) ANY TRUST ; OR (I) ANY UNIVERSITY ESTABLISHED OR INCORPORATED BY O R UNDER A CENTRAL, STATE OR PROVINCIAL ACT AND AN INSTITUTION DECLARED TO BE A UNIVERSITY UNDER SECTION 3 OF THE UNIVERSITY GRANTS COMMISSION ACT, 1956 (3 OF 1956), OR (J) ANY FIRM, SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACC OUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CH EQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO-- (I) ONE PER CENT. IN CASE OF ADVERTISING, 4 ITA 597/K/201 0 JAYPRAKASH PARASRAMKA. A.Y. 05-06 (II) IN ANY OTHER CASE TWO PER CENT. OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THERE IN. (2) ANY PERSON (BEING A CONTRACTOR AND NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY) RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE SUB-CONTRACTOR) IN PURSUANCE OF A CONTRACT WITH THE SUB-CONTRACTOR FOR CARRYING OUT, OR FOR THE SUPPLY OF LABOUR FOR CARRYING OUT, THE WHOLE OR ANY PART OF THE WORK UNDERTAKEN BY THE CON TRACTOR OR FOR SUPPLYING WHETHER WHOLLY OR PARTLY ANY LABOUR WHICH THE CONTR ACTOR HAS UNDERTAKEN TO SUPPLY SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE SUB-CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISS UE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMO UNT EQUAL TO ONE PER CENT OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THEREIN. XXXX XXXX XXXX 6. FROM THE ABOVE PROVISIONS OF SECTION 194C(1), IT IS CLEAR THAT THE PAYMENTS MADE BY INDIVIDUAL OR HINDU UNDIVIDED FAMILY DOES NOT COME WITHIN THE AMBIT OF TDS I.E. THE EXPENDITURE INCURRED FOR ADVERTISEMENT AS INDIVIDUAL AND HUF ARE SPECIFI CALLY EXCLUDED IN THE ABOVE PROVISIONS. THE PROVISION OF SUB-SECTION (2) APPLIES ONLY TO PAYMEN TS MADE TO SUB-CONTRACTORS AND NOT TO CONTRACTORS. ACCORDINGLY, ASSESSING OFFICER CAN NOT MADE DISALLOWANCE BY INVOKING PROVISIONS OF SECTION 40A(IA), AS PRESENT ASSESSEE BEING AN INDIV IDUAL IS NOT LIABLE TO DEDUCT TAX IN VIEW OF PROVISIONS OF SECTION 194C(1) AS EXISTED IN THE REL EVANT ASSESSMENT YEARS. NO DOUBT, ASSESSEES TURNOVER EXCEEDS THE MONETARY LIMIT AS SPECIFIED UN DER CLAUSE (A) OR CLAUSE (B) OF SECTION 44AB AND THE ASSESSEES ACCOUNTS ARE SUBJECT TO AUDIT AN D THE ASSESSEE HAS AUDITED HER ACCOUNTS AND FILED TAX AUDIT REPORT ALONG WITH RETURN OF INCOME. WE FIND THAT THE ASSESSING OFFICER HAS MADE DISALLOWANCE IN VIEW OF THE AMENDED PROVISIONS OF S ECTION 194C(1) BY THE FINANCE ACT, 2007 WITH EFFECT FROM 01.06.2007 WHEREIN IT IS PROPOSED TO A MEND SUB-SECTION (1) IN SECTION 194C SO AS TO INCLUDE PAYMENTS MADE BY ANY INDIVIDUAL OR HINDU UN DIVIDED FAMILY WHOSE TOTAL SALES / GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSIO N CARRIED ON BY HIM EXCEED MONETARY LIMIT SPECIFIED UNDER CLAUSE (A) OR CLAUSE (B) OR SECTION 44AB DURING THE FINANCIAL YEAR OR IMMEDIATELY PRECEDING FINANCIAL YEAR IN WHICH SUCH SUM IS CREDI TED OR PAID TO THE ACCOUNT OF THE CONTRACTOR. THIS AMENDMENT TAKES EFFECT FROM 1 ST DAY OF JUNE, 2007 AND IS APPLICABLE FOR AND FROM A SSESSMENT YEAR 2008-09. IN SECTION 194C(1) WITH EFFECT FROM 0 1.06.2007, BY THE FINANCE ACT, 2007, CLAUSE AS INSERTED, READS AS UNDER :- (K) ANY INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WH OSE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSIO N CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE (A) OR CLAUS E (B) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANC IAL YEAR IN WHICH SUCH SUM IS CREDITED OR PAID TO THE ACCOUNT OF THE CONTRACTOR, SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTH ER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO - (I) ONE PER CENT IN CASE OF ADVERTISING, (II) IN ANY OTHER CASE TWO PER CENT, OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THERE IN : PROVIDED THAT NO INDIVIDUAL OR A HINDU UNDIVIDED FA MILY SHALL BE LIABLE TO DEDUCT INCOME-TAX ON THE SUM CREDITED OR PAID TO THE ACCOUNT OF THE CONTRACTOR 5 ITA 597/K/201 0 JAYPRAKASH PARASRAMKA. A.Y. 05-06 WHERE SUCH SUM IS CREDITED OR PAID EXCLUSIVELY FOR PERSONAL PURPOSES OF SUCH INDIVIDUAL OR ANY MEMBER OF HINDU UNDIVIDED FAMILY. 7. WE FIND FROM THE ARGUMENTS OF LD.SR. DR THAT REV ENUE WANT TO INVOKE PROVISIONS OF SUB-SECTION (2) OF SECTION 194C FOR FURTHERANCE OF THIS CASE BU T WE ARE OF THE CONSIDERED VIEW THAT SECTION 194C(2) WILL APPLY TO THE PAYMENTS MADE TO SUB-CONT RACTORS BY THE CONTRACTOR AND NOT BY THE ASSESSEE. IN THE PRESENT CASE, IT IS AN ADMITTED PO SITION THAT THE ASSESSEE HAS MADE PAYMENTS ON ADVERTISEMENT TO THE CONTRACTORS AND NOT TO SUB-CON TRACTORS. FURTHER AS REFERRED BY LD. COUNSEL FOR THE ASSESSEE, THIS PROVISION WAS EXPLAINED BY C BDT CIRCULAR NO.3 OF 2008 DATED 12.03.2008 WHICH IS REPORTED IN (2008)299 ITR 8 (STATUTE) AND THE RELEVANT CIRCULAR AS REPORTED AT PAGE 71, READS AS UNDER :- 54. EXPANSION OF SCOPE OF THE PROVISIONS OF SECTIO N 194C. 54.1 THE EXISTING PROVISIONS OF SUB-SECTION (1) OF SECTION 194C PROVIDED FOR DEDUCTION OF INCOME-TAX AT SOURCE FROM ANY SUM CREDITED OR PA ID TO THE RESIDENT CONTRACTOR FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABO UR FOR CARRYING OUT ANY WORK) IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR A ND THE GOVERNMENT, LOCAL AUTHORITIES, STATUTORY CORPORATIONS, COMPANIES, CO- OPERATIVE SOCIETIES, STATUTORY AUTHORITIES ENGAGED IN PROVIDING HOUSING ACCOMMODAT ION, ETC., REGISTERED SOCIETIES, TRUSTS, UNIVERSITIES AND FIRMS. THE RATE OF TDS IS 1% IN RESPECT OF ADVERTISING CONTRACTS AND 2% IN OTHER CASES. 54.2 THE EXISTING PROVISIONS OF SUB-SECTION (1) OF SECTION 194C DID NOT PROVIDE FOR DEDUCTION OF TAX AT SOURCE ON PAYMENTS MADE BY AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY TO A CONTRACTOR. 54.3 CONSIDERING THE RISING NUMBER OF CONTRACTS BEI NG AWARDED BY INDIVIDUALS AND HUFS CARRYING ON BUSINESS OR PROFESSION AND THE INCREASING VOLUME OF SUCH PAYMENTS TO CONTRACTORS, IT WAS FELT THAT THERE IS NEED TO REQUIRE SUCH PERSONS TO DEDUCT TAX AT SOURCE FROM PAYMENTS MADE BY THEM TO CONTRACTORS. 54.4 THERE WOULD BE GENUINE DIFFICULTIES IF INDIVID UALS OR HUFS WITH SMALL BUSINESS TURNOVERS OR GROSS RECEIPTS OF PROFESSION ARE REQUIRED TO DEDUCT TAX AT SOURCE. AN EXCEPTION IN SUCH CASES WOULD BE JUSTIFI ED. SIMILARLY THE CONTRACTS AWARDED BY AN INDIVIDUAL OR A MEMBER OF HUF OF HUF EXCLUSIVELY FOR PERSONAL PURPOSES MERIT EXCLUSION. 54.5 ACCORDINGLY, THE FINANCE ACT, 2007, HAS SUBSTI TUTED THE SAID SUB-SECTION (1) TO INCLUDE IN ITS AMBIT SUCH INDIVIDUAL OR A HI NDU UNDIVIDED WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PRO FESSION CARRIED ON EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE (A) OR CLAUS E (B) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING FINANCIAL YEAR IN WHICH SUM IS CREDITED OR PAID TO THE ACCOUNT OF THE CONTRACTOR. THIS AMEN DMENT SHALL NOT APPLY IN RESPECT OF PAYMENTS MADE TO A CONTRACTOR BY ANY IND IVIDUAL OR A MEMBER OF A HINDU UNDIVIDED FAMILY EXCLUSIVELY FOR THEIR PERSON AL PURPOSES. 54.6 APPLICABILITY - THIS AMENDMENT WILL TAKE EFFEC T FROM THE 1ST DAY OF JUNE, 2007. 8. IN VIEW OF THE ABOVE CLEAR PROVISIONS OF SECTION 194(1) AS EXISTING IN ASSESSMENT YEARS 2006-07 & 2007-08, I.E. RELEVANT ASSESSMENT YEARS IN THE PR ESENT APPEALS, IT IS CLEAR THAT THE ASSESSEE IS UNDER NO OBLIGATION TO DEDUCT TDS ON THE EXPENDITUR E OF ADVERTISEMENT, AS THE ASSESSEE BEING AN INDIVIDUAL, AND THE CLAIM OF THE ASSESSEE IS AS PER PROVISIONS OF LAW. ONCE THE ASSESSEE IS NOT LIABLE 6 ITA 597/K/201 0 JAYPRAKASH PARASRAMKA. A.Y. 05-06 TO DEDUCT TDS UNDER THE PROVISION OF SECTION 194C(1 ), THE PROVISIONS OF SECTION 40A(IA) FOR MAKING DISALLOWANCE OF EXPENDITURE FOR NON-DEDUCTION OF TD S WILL NOT APPLY. WE FURTHER FIND THAT, IT IS NOT THE CASE OF THE REVENUE THAT THE EXPENSES ARE BOGUS OR UNREASONABLE OR EXCESSIVE BUT THE DISALLOWANCE IS MADE MERELY FOR NON-DEDUCTION OF TD S. ACCORDINGLY, WE ARE OF THE CONSIDERED VIEW THAT CIT(A) HAS RIGHTLY DELETED THE DISALLOWANCE AN D WE CONFIRM THE SAME. 5. AS THE LEGAL ISSUE RAISED BY THE ASSESSEE IS EXA CTLY ON SIMILAR FACTS IN THE PRESENT CASE, TAKING A CONSISTENT VIEW, WE ARE OF THE VIEW THAT T HE AMENDED PROVISIONS OF SECTION 194C(1) OF THE ACT W.E.F. 01.06.2007 AND WILL NOT APPLY TO THE PRESENT ASSESSMENT YEAR OF THE ASSESSEE I.E. AY 2005-06. ACCORDINGLY, THIS ISSUE OF THE ASSESSEE S APPEAL IS ALLOWED. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 7. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- . ! ! ! ! . '# , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( !# !# !# !# ) DATED 24TH OCTOBER, 2011 /0 %12 3 JD.(SR.P.S.) '. 4 ,5 6'5'7 - COPY OF THE ORDER FORWARDED TO: 1. *+ / APPELLANT SHRI JAYPRAKASH PARASRAMKA, 7F, ABINAS H CHANDRA BANERJEE LANE, KOLKATA-700 010. 2. ,-*+ / RESPONDENT CIT- XIV, KOLKATA 3. ITO, WARD-40(3), KOLKATA 4. 589 ,% / DR, KOLKATA BENCHES, KOLKATA -5 ,/ TRUE COPY, '.%:/ BY ORDER, 2 /ASSTT. REGISTRAR .