Smt Minakshi Biswas, Nadia V. ITO, WD-4, NADIA, Nadia

ITA 646/KOL/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4219 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 03-11-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 18-05-2015
• Court: TRIBUNAL
• Department Lawyers: P B PRAMANIK
• Assessee Lawyers: M K DUTTA
• Keywords: Commercial expediency
• Section: 143(3); 194C; 201(1)

Judgement Text

1 ITA NO.646/KOL/2015 SMT. MINAKSHI BISWAS, AY 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA [BEFORE SHRI M. BALAGANESH, AM & SHRI S. S. VISWAN ETHRA RAVI, JM] I.T.A NO. 646/KOL/2015 ASSESSMENT YEAR: 2009-10 SMT. MINAKSHI BISWAS VS. INCOME-TAX OFFICER, WD- 4, NADIA (PAN: ADPPB4558G) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 03.11.2016 DATE OF PRONOUNCEMENT: 16.11.2016 FOR THE APPELLANT: SHRI M. K. DUTTA, FCA FOR THE RESPONDENT: SHRI P. B. PRAMANIK, JCIT ORDER PER SHRI M. BALAGANESH, AM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-12, KOLKATA VIDE APPEAL NO. 262/CIT(A)-12/KOL/WD-4,NADIA/2014 DATED 20.02.2 015. ASSESSMENT WAS FRAMED BY ITO, WARD-4, NADIA U/S. 143(3) OF THE INCOME TAX AC T, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2009-10 VIDE HIS ORDER DATED 29.12.20 11. 2. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) IS JUSTIFIED IN UPHOLDING THE DISALLOWANCE OF RS.12,57,984/- U/S . 40(A)(IA) OF THE ACT FOR ALLEGED NON- DEDUCTION OF INCOME TAX AT SOURCE IN TERMS OF SECTI ON 194C OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSE SSEE IS A KEROSENE OIL AGENT UNDER INDIAN OIL CORPORATION AT KARIMPUR, DIST. NADIA. SHE GOT THE DEALERSHIP FROM INDIAN OIL CORPORATION (IN SHORT IOC) UNDER PHYSICALLY HANDICA PPED QUOTA. SHE HAD ENGAGED DURING THE YEAR UNDER REFERENCE A TRANSPORT CONTRACTOR I.E . RABINDRA NATH BISWAS AT KARIMPUR FOR SUPPLYING TRUCK TO TRANSPORT KEROSENE OIL FROM THE DEPOT OF IOC AT MOURIGRAM, HOWRAH TO KARIMPUR. THE SAID TRANSPORT CONTRACTOR HAD GIVEN A LETTER TO THE ASSESSEE BY QUOTING HIS PERMANENT ACCOUNT NO. THAT HE WAS A REGULAR TAX PAY ER AND THAT HE PAYS TAX TO THE GOVERNMENT ON HIS OWN, SUBMITS REGULAR INCOME TAX R ETURN AND ACCORDINGLY, NO INCOME TAX BE DEDUCTED AT SOURCE U/S. 194C OF THE ACT. ON THE STRENGTH OF THIS DECLARATION THE ASSESSEE 2 ITA NO.646/KOL/2015 SMT. MINAKSHI BISWAS, AY 2009-10 MADE PAYMENTS TO THE SAID PARTY WITHOUT DEDUCTION O F TAX AT SOURCE. THE AO DISALLOWED THE SAME U/S. 40(A)(IA) OF THE ACT FOR VIOLATION OF SEC TION 194C OF THE ACT. BEFORE THE LD. CIT(A), THE ASSESSEE TRIED TO EXPLAIN THAT THE CONC ERNED TRANSPORTER HAD DULY OFFERED THE SUBJECT MENTIONED RECEIPTS IN HIS RETURN AND HAD PA ID TAXES THEREON AND HENCE, IN VIEW OF THE AMENDMENT BROUGHT IN BY THE FINANCE ACT, 2012 U/S. 40(A)(IA) OF THE ACT TOGETHER WITH SECTION 201(1) OF THE ACT, HE ARGUED THAT THE SAID AMENDMENT IS TO BE CONSIDERED AS RETROSPECTIVE IN OPERATION, FOR WHICH RELIANCE WAS PLACED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF ITA NO. 337/AGRA/2013, RAJEEV KUMAR AGARWAL VS. ADDL. CIT FOR AY 2006-07 DATED 29.05.2013. ACCORDINGLY, IT WAS PLEADED THAT NO DISALLOWANCE U/S. 40(A)(IA) OF THE ACT COULD BE MADE IN THE HANDS OF THE ASSESSEE. THE LD . CIT(A), HOWEVER, HELD THAT THE AMENDMENT BROUGHT IN BY THE FINANCE ACT, 2012 IS ON LY PROSPECTIVE IN NATURE AND ACCORDINGLY, DISMISSED THE PLEA OF THE ASSESSEE AND CONFIRMED THE ADDITION MADE BY THE LD. AO. 4. THE LD. AR TOOK US TO PAGE NO. 4 OF THE PAPER BO OK CONTAINING THE DECLARATION GIVEN BY THE SAID TRANSPORT CONTRACTOR RABINDRA NATH BISW AS TO THE ASSESSEE FOR NON-DEDUCTION TAX T SOURCE. APART FROM THIS, THE LD. AR TOOK US TO T HE FOLLOWING PAGES IN THE PAPER BOOK: 1. IT RETURN ACKNOWLEDGEMENT OF RABINDRA NATH BISW AS FOR AY 2009-10 AT PAGE 5 OF THE PAPER BOOK. 2. PAN OF THE PARTY AT PAGE 6 OF THE PAPER BOOK 3. AUDITED BALANCE SHEET AND P&L ACCOUNT FOR THE YE AR ENDED 31.03.2009 FROM PAGES 7 TO 12. THE LD. AR ALSO PLACED RELIANCE ON THE CIRCULAR ISS UED BY THE CBDT REPORTED IN 379 ITR (ST.) 83 WHEREIN IT HAS BEEN STATED THAT WHERE A TR ANSPORTER OWNS ONLY TWO TRUCKS, THEN THE PAYER NEED NOT DEDUCT TAX AT SOURCE WHILE MAKING PA YMENTS TO THE SAID CONTRACTOR. HE ULTIMATELY PRAYED FOR SETTING ASIDE THIS ISSUE TO T HE FILE OF THE LD. AO TO DECIDE THE SAME IN THE LIGHT OF THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD., ITA NOS. 160 & 161/KOL/2015 . IN RESPONSE TO THIS, THE LD. DR ARGUED THAT THE CIRCULAR RELIED ON BY THE LD. AR WA S NEVER ARGUED BEFORE THE LOWER AUTHORITIES AND THE ACCOUNTS OF TRANSPORTER AS PRES ENTED NOW WERE NEVER EXAMINED BY THE AO. ACCORDINGLY, HE PLACED RELIANCE ON THE ORDERS OF THE LOWER AUTHORITIES. 3 ITA NO.646/KOL/2015 SMT. MINAKSHI BISWAS, AY 2009-10 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE IMPUGNED ISSUE NEEDS TO BE ADDRESS ED IN THE LIGHT OF THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF ANSAL LAND MARK TOWNSHIP (P) LTD., SUPRA. WE ALSO FIND THAT THE LD. CIT(A) WAS ALSO WELL AWARE O F THE FACT THAT THE TRANSPORTER HAD OFFERED THE SUBJECT MENTIONED RECEIPTS TO TAX AND LD. CIT(A ) HAD EVEN DISCUSSED ABOUT THE PROSPECTIVE APPLICABILITY OF THE AMENDMENT BROUGHT IN BY THE FINANCE ACT, 2012. BUT WE FIND THAT THE HONBLE DELHI HIGH COURT HAD HELD THA T THE SAID AMENDMENT TO BE RETROSPECTIVE IN NATURE. ACCORDINGLY, WE SET ASIDE THIS ISSUE TO THE FILE OF THE AO TO EXAMINE THE ACCOUNTS AND RETURNS OF THE TRANSPORTER AND IF THE SAID TRAN SPORTER HAD CONSIDERED THE SUBJECT MENTIONED RECEIPTS FROM THE ASSESSEE HEREIN IN HIS RETURNS, THEN THE ASSESSEE SHOULD NOT BE INVITED WITH THE DISALLOWANCE U/S. 40(A)(IA) OF THE ACT. THE AO IS DIRECTED ACCORDINGLY. THIS GROUND OF APPEAL OF ASSESSEE IS ALLOWED FOR STATIST ICAL PURPOSES. 6. THE NEXT GROUND TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) IS JUSTIFIED IN CONFIRMING THE ADDITION MADE TOWARDS M EAL CHARGES PAID TO TRUCK DRIVERS AMOUNTING TO RS.78,000/- IN THE FACTS AND CIRCUMSTA NCES OF THE CASE. 7. BRIEF FACTS OF THIS ISSUE IS THAT THE AO DISALLO WED A SUM OF RS.78,000/- PAID TO THE DRIVERS OF THE TRUCKS @ ABOUT RS.500/- PER TRUCK F OR TWO PERSONS FOR THEIR UPWARD AND DOWNWARD JOURNEYS FROM MOURIGRAM TO KARIMPUR COVER ING A DISTANCE OF ABOUT 450 KMS. IT WAS PLEADED THAT AS PER THE ACCEPTED CUSTOM OF THE TRADE, WHENEVER THE DRIVERS CARRY THE MATERIALS FROM INDIAN OIL DEPOT, THEY ARE PAID MEAL CHARGES FOR THEMSELVES AND FOR THEIR ASSISTANTS. MOREOVER, THE DRIVERS WOULD BE ASKED T O PARK THEIR TRUCKS FOR UNLOADING AT PLACES WHICH ARE AT A DISTANCE FROM THEIR DESTINATION POIN T. ACCORDINGLY, IT WAS PLEADED THAT THE SAME WOULD BE SQUARELY ALLOWABLE AS A BUSINESS EXPE NDITURE. THE AO, HOWEVER, MADE DISALLOWANCE OF THE SAME WHICH WERE ALSO CONFIRMED BY THE LD. CIT(A). 8. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE LD. AR HAD PROVIDED A C HART IN PAGE 3 OF THE PAPER BOOK AS BELOW: SL. NO. FINANCIAL YEAR TURNOVER RS. LAKHS MEAL CHARGES RS./LAKHS 1. 2008-09 167.78 0.78 4 ITA NO.646/KOL/2015 SMT. MINAKSHI BISWAS, AY 2009-10 2. 3. 4. 5. 2007-08 2006-07 2005-06 2004-05 174.39 183.71 176.50 179.54 0.94 0.68 0.43 0.53 FROM THE AFORESAID TABLE OF COMPARATIVE FIGURES FO R FIVE YEARS WE FIND THAT THE ASSESSEE HAS BEEN INCURRING THE MEAL CHARGES TO DRI VERS AND THEIR ASSISTANTS EVERY YEAR FOR THE PURPOSE OF CARRYING OUT HER BUSINESS ON THE GROUND OF COMMERCIAL EXPEDIENCY. WE ALSO FIND THAT THE EXPENDITURE INCURRED THEREON TAKING INTO ACCOUNT THE FACT OF TRAVELLING OF HUGE DISTANCE OF ABOUT 450 KMS., IS V ERY REASONABLE. HENCE, WE HOLD THAT THE SAME HAS TO BE ALLOWED AS AN EXPENDITURE INCURR ED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. ACCORDINGLY, T HIS GROUND OF APPEAL OF ASSESSEE IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 16.11.2016 . SD/- SD/- (S.S. VISWANETHRA RAVI) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED : 16TH NOVEMBER, 2016 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT SMT. MINAKSHI BISWAS, VILL. BAJITPUR , P.O. KARIMPUR, DIST. NADIA 2 RESPONDENT ITO, WARD-4, NADIA. 3. THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .