M/s. Shree Odhavram Transport, Valsad V. The Income tax Officer,Vapi Ward-3, Vapi

ITA 63/AHD/2012

• Counselvise Citation: 6320514 RSA 2012
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-05-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 10-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJESH UPADHAYA
• Keywords: Non-deduction of tax
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE SHRI MUKUL KUMAR SHRAWAT, JM AND SHRI T. R. MEENA, AM) ITA NO.3263/AHD/2011 A. Y.: 2008-09 THE INCOME TAX OFFICER, VAPI WARD-3, VAPI VS M/S. SHREE ODHAVRAM TRANSPORT, FLAT NO.208, SANIDHYA APARTMENTS, DESAIWAD, CHANODGAM, VIA VAPI PA NO. ABBFPS 5303 J (APPELLANT) (RESPONDENT) ITA NO.63/AHD/2012 A.Y.: 2008-09 M/S. SHREE ODHAVRAM TRANSPORT, FLAT NO.208, SANIDHYA APARTMENTS, DESAIWAD, CHANODGAM, VIA VAPI PA NO. ABBFPS 5303 J VS THE INCOME TAX OFFICER, VAPI WARD-3, VAPI (APPELLANT) (RESPONDENT) DEPARTMENT BY SHRI SAMIR TEKRIWAL, SR. DR ASSESSEE BY SHRI RAJESH UPADHAYA, AR DATE OF HEARING: 01-05-2012 DATE OF PRONOUNCEMENT: 23-05-2012 O R D E R PER TEJ RAM MEENA, ACCOUNTANT MEMBER : BOTH THE CROSS APPEALS BY THE REVENUE AND THE ASSESSEE ARE DIRECTE D AGAINST THE ORDER OF THE LEARNED CIT(A), VALSAD IN APPEAL NO. C IT(A)/VLS/287/10- 01 DATED 16-09-2011. BOTH THE APPEALS WERE HEARD TOGETHER AND THE SAME ARE ITA NO.3263/AHD/2011 (AY: 2008-09) ITO, VALSAD W-3, VAPI VS M/S. SHREE ODHAVRAM TRANSP ORT ITA NO.63/AHD/2012 M/S. SHREE ODHAVRAM TRANSPORT VS ITO, VALSAD W-3, VAPI 2 BEING DISPOSED OF BY THIS COMMON CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AS UNDER: ITA NO.63/AHD/2012 (ASSESSEES APPEAL) 2. WE FIRST TAKE THE APPEAL OF THE ASSESSEE. THE EF FECTIVE GROUNDS TAKEN BY THE ASSESSEE IN ITS APPEAL ARE REPRODUCED BELOW: (1) THE ITO HAS ERRED IN LAW AND ON FACTS TO HOLD THAT PROVISIONS OF SEC. 194 C (2) ARE APPLICABLE IN CASE OF THE APPELLANT. LEARNED CIT (APPEAL) HAS ALSO ERRED IN CONFIRMING ACTION OF ITO. (2) ITO HAS ERRED IN LAW AND ON FACTS TO IN NOT AL LOWING BENEFIT OF PROVISO (II) TO SUB SEC. 3 OF SEC. 194 ( C) AND TREATED PAYMENT OF RS.4,16,258/- TO THE NINE TRUCK OWNERS, IN WHOSE INDIVIDUAL CASE AGGREGATE PAYMENT MADE TO EACH OF THEM DURING THE YEAR UNDER ASSESSME NT DID NOT EXCEED RS.50,000/-. LEARNED CIT(APPEALS) HA S ALSO ERRED IN NOT ACCEPTING CONTENTION OF THE APPEL LANT. (3) ITO HAS ERRED IN LAW AND ON FACTS TO TREAT 13 T RUCK OWNERS WHO HAD NOT MORE THAN 2 TRUCKS LIABLE TO TDS . TOTAL OF SUCH PAYMENTS TO SUCH TRUCK OWNERS AGGREGA TING TO RS.1,21,57,560/- INCLUSIVE OF DIESEL & PETROL EX PENSES EXIGIBLE TO TDS CONTRARY TO PROVISO THAT SUCH SUB CONTRACTORS HAVE NOT OWNED MORE THAN TWO GOODS CARRIAGES AT ANY TIME DURING HT4E PREVIOUS YEAR. LE ARNED CIT (APPEALS) HAS ALSO ERRED IN NOT ALLOWING PLEA O F THE APPELLANT THAT SUCH PAYMENTS ARE NOT EXIGIBLE TO TD S. 3. FACTS OF THE CASE ARE THAT THE ASSESSEE DERIVED ITS INCOME FROM THE BUSINESS OF TRANSPORT. THE ASSESSEE IS A COMMIS SION AGENT PROVIDING TRANSPORT SERVICES THROUGH BALAJI VOYAGE PVT. LTD., KUTCH, GUJARAT AND VENKATESH TRADELINK PVT. LTD., ASHRAM R OAD, AHMEDABAD, GUJARAT TO M/S. SANGHI CEMENT LTD., SITU ATED AT LAKHPAAT TALUKA KUTCH, WHEREIN SANGHI CEMENT LTD. HAD ITS OWN ITA NO.3263/AHD/2011 (AY: 2008-09) ITO, VALSAD W-3, VAPI VS M/S. SHREE ODHAVRAM TRANSP ORT ITA NO.63/AHD/2012 M/S. SHREE ODHAVRAM TRANSPORT VS ITO, VALSAD W-3, VAPI 3 PETROL/DIESEL PUMP FROM WHERE FUEL WAS PROVIDED TO THE TRUCKS AND LATER ON THE AMOUNT WAS ADJUSTED AGAINST THE FREIGH T BILLS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FORM NO.16A ISSUED BY BALAJI VOYAGE PVT. LTD., KUTCH, GUJARAT AND VENKATESH TRAD ELINK PVT. LTD., ASHRAM ROAD, AHMEDABAD, GUJARAT ON 30-06-2008 IN RE SPECT OF TAX DEDUCTED AT SOURCE FORM PAYMENT/CREDIT OF FREIGHT R ECEIPTS WERE SUBMITTED AS PERUSED BY THE AO. THE DETAILS ARE MEN TIONED ON PAGES 2, 3, 4 AND 5 OF THE ASSESSMENT ORDER. THESE PAYMEN TS RECEIVED BY THE ASSESSEE IN ITS OWN NAME HAVE BEEN SHOWN IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE HAVE ALSO BEEN SHOWN IN RE TURN FILED BEFORE THE AO. THE ASSESSEE HAS SHOWN FREIGHT RECEIPT OF R S.1,37,42,093/- AND FREIGHT PAYMENT OF RS.69,44,108/-. AS PER SECT ION 194C (3) (I) OF THE IT ACT READ WITH PROVISIONS OF RULE 29D OF THE IT RULES, THE ASSESSEE HAS TO FURNISH DETAILS OF ALL THE FORM NO. 15-I IN FORM NO.15- J BEFORE THE CONCERNED CIT WITHIN THE TIME STIPULAT ED IN SUB RULE (4) (II) OF RULE 29D WHICH WAS NOT SUBMITTED BY THE ASS ESSEE BEFORE THE CONCERNED CIT IN STIPULATED TIME FOR RS.69,44,108/- . THEREFORE, HE DISALLOWED THE WHOLE PAYMENT U/S 40 (A) (IA) OF THE IT ACT. FURTHER, THE ASSESSEE HAS NOT SHOWN ANY TRUCK IN THE BALANCE SHEET. THE ASSESSEE HAS DEBITED RS.64,29,740/- ON ACCOUNT OF P ETROL AND DIESEL AND NO EXPLANATION FOR EXPENDITURE IN RESPECT OF PE TROL AND DIESEL WAS GIVEN BEFORE THE AO. THEREFORE, THE AO ADDED RS.64, 29,740/- AS INCOME OF THE ASSESSEE. 4. BEING AGGRIEVED, BY THE ORDER OF THE AO, THE ASS ESSEE FILED APPEAL BEFORE THE LEARNED CIT(A), VALSAD. THE LEARN ED CIT(A) ITA NO.3263/AHD/2011 (AY: 2008-09) ITO, VALSAD W-3, VAPI VS M/S. SHREE ODHAVRAM TRANSP ORT ITA NO.63/AHD/2012 M/S. SHREE ODHAVRAM TRANSPORT VS ITO, VALSAD W-3, VAPI 4 DISMISSED THE APPEAL OF THE ASSESSEE ON THE GROUND OF NO TDS DEDUCTION U/S 194( C) (3) OF THE ACT BUT ALLOWED TH E APPEAL OF THE ASSESSEE OF ADDITION OF RS.64,29,740/- ON ACCOUNT O F PETROL AND DIESEL EXPENSES. HIS OBSERVATIONS IN PARA 5.6 OF TH E APPELLATE ORDER AT PAGES 10, 11 AND 12 ARE REPRODUCED HEREIN BELOW: 5.6 I HAVE ALSO CONSIDERED THE ALTERNATIVE PLEA BY THE LD. AR. I HAVE ALSO CAREFULLY CONSIDERED THE CASE LAWS RELIED UPON BY THE APPELLANT. THE REQUIREMENTS OF SEC. 194 C (3 ) AND THE PROVISO THEREIN AND THEIR APPLICABILITY IN THIS CASE IS NOT IN DOUBT. AS SEEN IN PARA 5.4 ABOVE, THE PAYMEN TS MADE BY THE APPELLANT FALLS WITHIN THE SEC. 194C (3 ) OF THE ACT. IN OTHER WORDS, THE PAYMENTS MADE TO THE SUB- CONTRACTORS ARE SUBJECTED TO TDS PROVISIONS U/S. 19 4C (2). THE APPELLANT FAILED TO MAKE TDS IN THOSE PAYM ENTS. BY INSERTING EXPL. I, THE FINANCE ACT, 1994, W. E . F. 1 ST JUNE, 1994 PROVIDES THAT THE EXPRESSION CONTRACTOR SHALL ALSO INCLUDE A CONTRACTOR WHO IS CARRYING OUT ANY WORK ( INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WOR K) IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND THE GOVT. OF A FOREIGN STATE OR A FOREIGN ENTERPRISE OR ANY ASSOCIATION OR BODY ESTABLISHED OUTSIDE INDIA. FURT HER, EXPL. TO SUB-SEC. (2) OF SEC. 194C HAS EXPLAINED TH AT EVEN A CREDIT TO ANY ACCOUNT, WHETHER CALLED SUSPEN SE A/C OR BY ANY OTHER NAME, IN THE BOOKS OF A/C OF THE PE RSON LIABLE TO PAY SUCH INCOME WOULD ATTRACT LIABILITY T O DEDUCT TAX AT SOURCE. THE AMOUNT NEED NOT BE CREDITED TO T HE PAYEE. IT IS WELL SETTLED LAW THAT AN ORAL AGREEMEN T DOES NOT HELP THE TAXPAYERS TO AVOID TAX DEDUCTION AT SO URCE AT WHERE THE CONTRACT AMOUNT EXCEEDS THE LIMIT PRESCRI BED. THE CBDT IN CIRCULAR NO.93 DT. 26 TH SEPT. 1972 STATED THAT SEC. 194C IS WIDE ENOUGH TO COVER NOT ONLY WRI TTEN CONTRACTS BUT ALSO ORAL CONTRACTS. FAILURE TO DEDUC T TAX WOULD ATTRACT LIABILITY FOR INTEREST AND PENALTY. A NOTHER IMPORTANT AMENDMENT TO SEC. 194C (3) (I) W. E. F. 1 ST JUNE 2005 BY INSERTING TWO PROVISO THAT DEDUCTION OF TAX AT ITA NO.3263/AHD/2011 (AY: 2008-09) ITO, VALSAD W-3, VAPI VS M/S. SHREE ODHAVRAM TRANSP ORT ITA NO.63/AHD/2012 M/S. SHREE ODHAVRAM TRANSPORT VS ITO, VALSAD W-3, VAPI 5 SOURCE SHALL NOT BE MADE ON THE AMOUNT OF ANY SUM CREDITED OR PAID OR LIKELY TO BE CREDIT OR PAID, DU RING THE COURSE OF BUSINESS OF PLYING, HIRING, OR LEASING GO ODS CARRIAGES, TO A SUB-CONTRACTOR BEING AN INDIVIDUAL AND NOT OWING MORE THAN 2 GOODS CARRIAGES AT ANY TIME DURIN G THE PRECIOUS YEAR. SUCH SUB-CONTRACTOR IS REQUIRED, HOW EVER, TO FURNISH A DECLARATION AS MAY BE PRESCRIBED TO TH E PERSON PAYING OR CREDITION SUCH SUM. THE PERSON RESPONSIBLE FOR MAKING PAYMENT TO THE SUB-CONTRACTO R SHALL ALSO FURNISH TO THE PRESCRIBED INCOME TAX AUT HORITY, THE PRESCRIBED PARTICULARS IN THE PRESCRIBED FORM A ND WITHIN THE PRESCRIBED TIME. THAT MEANS IN THIS CASE WHETHER THE APPELLANT HAD COMPLIED ALL THE CONDITIO NS LAID DISCUSSED JUST ABOVE WITH REGARDS TO THE PROVISO TO SEC. 194C (3) (I) ? I HAVE PERUSED THE DETAILS OF FORM 1 5-I AND THE DECLARATION FILED BY THE APPELLANT BEFORE ME. O UT OF 13 SUB-CONTRACTORS, 10 OF THEM HAVE NO PAN WHICH MEANS THEY ARE NOT FILING R/I AND THEIR JURISDICTIONAL IN COME TAX AUTHORITY IS NOT KNOWN TO THEM. HENCE, FILING THE F ORM 15- I BY THOSE PARTIES ARE VERY MUCH IN DOUBT. SIMILARL Y, IN THE DECLARATION FORM ONLY ONE PARTY (SUB-CONTRACTOR) HA S MENTIONED THE JURISDICTIONAL I. T. AUTHORITY AND RE ST OF THEM HAVE STATED AS NIL. I HAVE ALSO CAREFULLY PERU SED THE COPY OF THE AFFIDAVIT FILED BY SHRI SURESHBHAI M. BHANUSHALI, DATED 24.12.2010. THIS AFFIDAVIT ONLY S AYS THAT FORM 15-I WAS FILED BEFORE THE I. T. AUTHORITY FOR THE A. Y.2007-08. IT DOES NOT GIVE ANY FURTHER DETAILS SUCH AS WHICH I. T. AUTHORITY, DATE OF FILING THE FORM 15-I ETC. AS HELD BY THE AO, THIS ATTEMPT BY THE APPELLANT IS AF TER THOUGHT BECAUSE ONLY 3 OF THE SUB-CONTRACTORS HAVE THE PAN AND REST DO NOT HAVE IT. THE JURISDICTION OF IT AUTHORITY WAS ALSO NOT KNOWN TO THEM. IN THIS CIRCUMSTANCES, I HAVE NO HESITATION TO HOLD THAT TH E APPELLANT FAILED TO SATISFY THE PROVISIONS U/S. 194 C (3) AS WELL. TO SUM UP, THE PAYMENT MADE BY THE APPELLANT TO THE SUB-CONTRACTORS ATTRACTED SEC. 194C (2) AND THE APPELLANT FILED TO SATISFY THE CONDITIONS LAID IN S EC. 194C (3). THEREBY THE APPLICATION OF PROVISIONS U/S. 40( A) (IA) BY THE AO IS IN CONFORMITY WITH THE ESTABLISHED LAW. T HIS VIEW ITA NO.3263/AHD/2011 (AY: 2008-09) ITO, VALSAD W-3, VAPI VS M/S. SHREE ODHAVRAM TRANSP ORT ITA NO.63/AHD/2012 M/S. SHREE ODHAVRAM TRANSPORT VS ITO, VALSAD W-3, VAPI 6 IS ALSO AMPLY SUPPORTED BY THE DECISION OF THE HON BLE RAJASTHAN H. C. IN THE CASE SHREE CHAUDHURY TRANSPO RT CO. VS. ITO 225 CTR (RAJ)125 WHEREIN IT HELD THAT ; ASSESSEE HAVING EXECUTED A CEMENT TRANSPORTATION CONTRACT HIRED THE SERVICES OF TRUCK OWNERS, THERE EXISTED SUB-CONTRACTS BETWEEN THE APPELLANT AND TRUCK OWNERS AND THEREFORE SEC. 194C WAS APPLICABLE AND THE PAYMENT MADE INRESPECT OF SUCH CONTRACTS WITHOUT DEDUCTION OF TAX AT SOURCE U/S 194C WERE RIGHTLY DISALLOWED U/S. 40(A) (IA). SIMILAR VIEW WAS ECHOED BY THE DECISION OF THE HON BLE KARNATA H. C. IN THE CASE OF SMT. J. RAMA VS CIT 236 CTR (KAR) 105 WHEREIN IT WAS HELD THAT; IN ORDER TO PROVIDE VEHICLE TO A CUSTOMER AS PER AGREEMENT, ASSESSEE USED HIRE VEHICLES FROM OTHERS AND HIRING OF VEHICLES BY THE ASSESSEE IS IN THE NATURE OF TRANSPORT CONTRACT AND HENCE, THE DISALLOWANCE U/S. 40(A) (IA) WAS JUSTIFIED WHEN NO TAX WAS DEDUCTED AT SOURCE FROM PAYMENTS MADE TO THOSE PERSONS. IN VIEW OF THE FACTS AND CIRCUMSTANCES AND THE RELE VANT CASE LAWS DISCUSSED ABOVE, I AM INCLINED TO UPHELD THE ACTION OF THE AO AND HELD THAT THE AO HAS RIGHTLY A PPLIED PROVISIONS U/S. 40(A) (IA) OF THE ACT FOR DISALLOWI NG THE PAYMENT DUE TO NON-DEDUCTION OF TAX AT SOURCE. FURT HER, THE LD. AR HAS CONTESTED THAT CERTAIN TRUCK HAVE WO RKED FOR PAYMENT LESS THAN RS.50,000/- DURING THE YEAR F OR WHICH THE LD. AR CLAIMED RELIEF. HOWEVER, I PERUSED THE SUBMISSION MADE BY THE LD. AR BEFORE ME. WHAT I FOU ND THAT ALL THE 13 SUB-CONTRACTORS HAVE RECEIVED THE P AYMENT EXCEEDING RS.50,000/- DURING THE YEAR. THE APPELLAN TS CLAIM OF TRUCK-WISE RECEIPT HAS NO RELEVANT TO THE PROVISIONS OF THE ACT BECAUSE THE PERSONS SHOULD HA VE RECEIVED LESS OF RS.50,000/- DURING THE YEAR TO ESC APE THE PROVISIONS U/S. 194. IN THIS CASE ALL THE 13 SUB-CO NTRACTORS ITA NO.3263/AHD/2011 (AY: 2008-09) ITO, VALSAD W-3, VAPI VS M/S. SHREE ODHAVRAM TRANSP ORT ITA NO.63/AHD/2012 M/S. SHREE ODHAVRAM TRANSPORT VS ITO, VALSAD W-3, VAPI 7 HAVE RECEIVED IN EXCESS OF RS.50,000/- DURING THE Y EAR AND HENCE THIS CONTENTION OF THE APPELLANT ALSO REJ ECTED. THEREFORE, THIS GROUND OF APPEAL IS DISMISSED. 5. BEING AGGRIEVED BY THE ORDER OF THE LEANED CIT(A ) THE ASSESSEE FILED APPEAL BEFORE US AND CONTENDED THAT IN CASE OF 9 TRUCKS TOTAL PAYMENT MADE OF RS.4,16,258/- WAS NOT EXCEEDING RS.50,000/-. THE 13 TRUCK OWNERS WHO DID NOT HAVE M ORE THAN 2 TRUCKS AND NOT LIABLE TO DEDUCTED TDS TO WHOM AGGRE GATE PAYMENT OF RS.1,21,57,567/- INCLUSIVE OF DIESEL AND PETROL EX PENSES WERE MADE. WHEREVER, APPLICABILITY OF FORM NO.15-I IS CONCERNE D, THE SAME HAS BEEN COLLECTED FROM THE TRUCK OWNERS AND SUBMITTED BEFORE THE AO AND PERMANENT ACCOUNT NUMBER IN CASE OF PAN AVAILAB LE WERE GIVEN TO THE AO. 6. THE LEARNED DR RELIED UPON THE ORDER OF THE LEAR NED CIT(A) AND THE ORDER OF THE AO. 7. WE HAVE PERUSED THE FACTS OF THE CASE AND ARGUME NTS. IT APPEARS THAT THE ASSESSEE IS A COMMISSION AGENT PRO VIDING TRANSPORTATION SERVICES. THE TRUCKS WERE ARRANGED F ROM THE MARKET AND PROVIDED THE TRANSPORTATION SERVICES TO M/S. SA NGVI CEMENT LTD. THROUGH BALAJI VOYAGE PVT. LTD. AND VENKATESH TRADE LINK PVT. LTD. THE ASSESSEE HAD SUBMITTED FORM NO.15 I BEFORE TH E AO WHICH HAS BEEN UNDISPUTEDLY ADMITTED BY THE AO ON PAGE 6 OF THE ASSESSMENT ORDER WHICH IS SUFFICIENT COMPLIANCE OF LAW. THE ASSESSEE RELIED UPON THE DECISION OF ITAT AHMEDABAD D BENCH IN THE CASE OF ACIT CIRCLE-5, BARODA VS M/S. SHREE PRA MUKH TRANSPORT CO., BARODA IN ITA NO.1717/AHD/2010 AY 2006-07 D ATED 31-08- ITA NO.3263/AHD/2011 (AY: 2008-09) ITO, VALSAD W-3, VAPI VS M/S. SHREE ODHAVRAM TRANSP ORT ITA NO.63/AHD/2012 M/S. SHREE ODHAVRAM TRANSPORT VS ITO, VALSAD W-3, VAPI 8 2010 WHEREIN THE TRIBUNAL DISMISSED THE APPEAL OF T HE REVENUE. THE RELEVANT PORTION OF THE SAID ORDER IS REPRODUCED AS UNDER: 4. THE LEARNED CIT(A) CONSIDERING THE MATERIAL ON RECORD NOTED THAT THE AO HAS NOT DISPUTED THAT THE ASSESSE E CLAIMED THAT HE HAD OBTAINED DECLARATION IN FORM NO.15-I FR OM THE PAYEES. THE LEARNED CIT(A) NOTED THAT ULTIMATELY FO RM NO.15-I WAS FILED WITH DELAY IN THE OFFICE OF THE COMMISSIO NER, BUT THE ASSESSEE IN FACT HAD OBTAINED THE DECLARATION AND T HEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAD VIOLATED THE M ANDATE GIVEN BY THE PAYEES NOT TO DEDUCT TAX. THE ADDITION WAS ACCORDINGLY DELETED. 5. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE AR E OF THE VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE MATT ER. THE LEARNED DR SUBMITTED THAT RULE 29 D OF THE IT RULES IS PROC EDURAL IN NATURE. THE SUBMISSION OF THE LEARNED DR ITSELF SHO WS THAT SINCE THE COMPLIANCE OF THE RULE WAS PROCEDURAL ONL Y, THEREFORE, WHEN THE ASSESSEE OBTAINED REQUISITE DECLARATION AN D FILED THE SAME WITH DELAY WITH THE OFFICE OF THE COMMISSIONER AND ALSO FILED THE SAME BEFORE THE AO AT THE ASSESSMENT STAG E, WOULD PROVE THAT THE ADDITION IS CLEARLY UNJUSTIFIED IN T HE MATTER. ACCORDING TO SECTION 194 (C) (3) OF THE IT ACT, THE ASSESSEE COMPLIED WITH THE SECOND PROVISO BY OBTAINING DECLA RATION IN THE PRESCRIBED FORM. THEREFORE, THERE WAS NO LIABIL ITY FOR DEDUCTION OF TAX AT SOURCE. THE GENUINENESS OF THE CERTIFICATE IS NOT DOUBTED BY THE AUTHORITIES BELOW. THEREFORE, TH E ASSESSEE HAS SUBSTANTIALLY COMPLIED WITH THE PROVISIONS OF L AW. IN CASE OF PROCEDURAL IRREGULARITIES, THE ASSESSEE CANNOT BE P UT TO UNNECESSARY HARDSHIP IN THE MATTER AND THAT TOO WHE N CERTAIN EXEMPTION HAS BEEN GIVEN TO THE ASSESSEE IN SECTION PROVISO TO SECTION 194 (C) (3) OF THE IT ACT. SINCE, THERE IS SUFFICIENT COMPLIANCE OF THE PROVISIONS OF LAW, THEREFORE, THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION. WE, THEREFORE, DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE OR DER OF THE LEARNED CIT (A). WE CONFIRM HIS FINDINGS AND DISMISS THE AP PEAL OF THE REVENUE. ITA NO.3263/AHD/2011 (AY: 2008-09) ITO, VALSAD W-3, VAPI VS M/S. SHREE ODHAVRAM TRANSP ORT ITA NO.63/AHD/2012 M/S. SHREE ODHAVRAM TRANSPORT VS ITO, VALSAD W-3, VAPI 9 THE ASSESSEE HAS ALSO RELIED ON THE DECISION OF ITA T AHMEDABAD A BENCH IN THE CASE OF VALIBHAI KHANBHAI MANKAD, AHME DABAD VS DCIT (OSD), AHMEDABAD IN ITA NO.2228/AHD/2009 AY 2006-07 DATED 29-04-2011 {REPORTED IN [(2011) 139 TTJ 70]} WHEREIN AT PAGE NO. 5 AND 6 THE TRIBUNAL HELD AS UNDER: THE CONDITIONS LAID DOWN U/S 40(A) (IA) FOR MAKING ADDITION IS THAT TAX IS DEDUCTIBLE AT SOURCE AND SUCH TAX HAS N OT BEEN DEDUCTED. IF BOTH THE CONDITIONS ARE SATISFIED THEN SUCH PAYMENT CAN BE DISALLOWED U/S 40(A) (IA). IN OTHER WORDS WHERE TAX IS NOT DEDUCTIBLE ADDITION U/S 40(A) (IA) CANNO T BE MADE. FROM THIS IT FOLLOWS THAT SECOND PROVISO TO SECTION 194C(3)(I) ALONE WOULD BE OPERATIVE FOR DECIDING WHETHER TAX I S DEDUCTIBLE OR NOT DEDUCTIBLE. NON-FURNISHING OF FORM NO.15J TO THE COMMISSIONER IS AN ACT POSTERIOR IN TIME TO PAYMENT S MADE TO SUBCONTRACTOR. THIS CANNOT BY ITSELF, UNDO THE ELIG IBILITY OF EXEMPTION CREATED BY SECOND PROVISO BY VIRTUE OF WH ICH SUB- CONTRACTORS HAVE SUBMITTED FORM NO.15-I. THE DEDUCT IBILITY OF TAX IS, THEREFORE, CONFINED OR LIMITED TO APPLICABI LITY OF SECOND PROVISO ONLY BECAUSE IT IS AT THAT POINT OF TIME OF ASSESSEE HAS TO DECIDE WHETHER IT HAS TO DEDUCT THE TAX OR NOT. WHERE FORMS NO.15-I ARE NOT SUBMITTED, IT HAS TO DEDUCT THE TAX . CONVERSELY WHERE FORM NO.15-I IS SUBMITTED TO THE ASSESSEE BY THE SUBCONTRACTORS, THE TAX IS NOT DEDUCTIBLE AND NO AD DITION U/S 40(A) (IA) CAN BE MADE. HE FURTHER RELIED ON THE FOLLOWING CASE LAWS (PB - 6): (1) MYTHRI TRANSPORT V/S ACIT (2010) 001 ITR (TRIB UNAL) 290 (2) R. R. CARRYING CORPORATION V/S ACIT, (2009) 12 6 TTJ, (CTK) 240 (3) CIT V/S UNITED RICE LAND LTD. (2010) 322 ITR 59 4 ( P &H) (4) CIT V/S SIRMOUR TRUCK OPERATORS UNION (2011) 37 (I) ITCL 362 (H. P. HIGH COURT) ITA NO.3263/AHD/2011 (AY: 2008-09) ITO, VALSAD W-3, VAPI VS M/S. SHREE ODHAVRAM TRANSP ORT ITA NO.63/AHD/2012 M/S. SHREE ODHAVRAM TRANSPORT VS ITO, VALSAD W-3, VAPI 10 IT IS CLAIMED THAT TDS PROVISIONS U/S 40 (A) (IA) O F THE ACT ARE WRONGLY INVOKED BY THE AO AS NO TAX WAS DEDUCTIBLE AND ALSO FORM NO. 15-I HAD BEEN COLLECTED AND SUBMITTED BY THE ASSESSEE BE FORE THE AO. WE HAVE PERUSED THE CASE LAWS RELIED ON BY THE ASSE SSEE AND ALSO GONE THROUGH THE FACTS OF THE CASE. THE APPELLANT H AD MADE SUFFICIENT COMPLIANCE OF LAW BY OBTAINING THE FORM NO.15-I. TH US, THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.3263/AHD/2011 (REVENUES APPEAL) 8. NOW WE TAKE UP THE REVENUES APPEAL. THE MAIN GR OUNDS OF THE REVENUES APPEAL ARE AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE DISALLOWAN CE MADE BY THE AO ON ACCOUNT OF PETROL AND DIESEL EXPE NSES OF RS.64,29,740/-. 2. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE L D. CIT(A) BE SET ASIDE AND THAT THE ORDER OF THE AO BE RESTORED. 9. AS THE FACTS OF THE CASE ARE SIMILAR, THE SAME H AVE NOT BEEN REPEATED HERE. THE LEARNED CIT(A) HAD ALLOWED THE A PPEAL BY GIVING DETAILED REASONING ON PAGE 14 AND 15 OF THE APPELLA TE ORDER DATED 16-09-2011. THIS WAS THE ARRANGEMENT MADE BY THE AS SESSEE THAT DIESEL WAS USED BY THOSE TRUCKS FROM THE PRINCIPAL PETROL STATION AND SUBSEQUENTLY REIMBURSED BY THE APPELLANT ON BEHALF OF THE SUB CONTRACTOR. THE DIESEL EXPENSES REDUCED FROM THE TO TAL PAYMENT MADE TO THE TRUCK OWNERS. THE APPELLANT HAD DULY RE FLECTED THESE EXPENSES IN THE REGULAR BOOKS OF ACCOUNTS WHICH HAV E BEEN REDUCED ITA NO.3263/AHD/2011 (AY: 2008-09) ITO, VALSAD W-3, VAPI VS M/S. SHREE ODHAVRAM TRANSP ORT ITA NO.63/AHD/2012 M/S. SHREE ODHAVRAM TRANSPORT VS ITO, VALSAD W-3, VAPI 11 FROM THE TOTAL PAYMENT OF THE FREIGHT. THUS, THE RE VENUES APPEAL IS DISMISSED. 10. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED AND THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23-05-2012 SD/- SD/- (MUKUL KUMAR SHRAWAT) JUDICIAL MEMBER (T. R. MEENA) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 15-05-2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 16-05-2012 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR.P.S ./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: