ITO, New Delhi V. Sh. Harjeet Singh, New Delhi

ITA 6492/DEL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69565 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 12-11-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 31-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S GILL
• Keywords: Business income
• Section: 194C

Judgement Text

ITA NO. 6492/DEL/2012 ASSTT.YEAR: 2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `C NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI CHANDRAMOHAN GARG, JUDICIAL MEMBER I.T.A.NO.6492/DEL/2012 ASSESSMENT YEAR : 2009-10 INCOME TAX OFFICER, VS HARJEET SINGH, WARD-27(2), ROOM NO. 213, PROP. M/S SA TGURU TRAILER TRANSPORT, D-BLOCK, VIKAS BHAWAN, B-74, 2 ND FLOOR, MANSAROVER GARDEN, NEW DELHI-110002 NEW DELHI. (PAN: ACRPS8274M) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI R.S. GILL , C.I.T.DR RESPONDENT BY : SHRI K. SAMPATH O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAI NST THE ORDER OF THE COMMISSIONER OF INCOME TAX(A)-XXIV, NEW DELHI DATED 23.10.2012 IN APPEAL NO.367/11-12 FOR AY 2009-10. 2. THE SOLE GROUND RAISED BY THE ASSESSEE READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS.13,08,25,562/- MADE U/S 40(A)(IA) OF THE INCOME TAX ACT ON ACCOUNT OF LORRY BOOKING AS ASSESSEE FAILED TO DEDUCT TDS. 3. BRIEFLY STATED THE FACTS GIVING RISE TO THIS APP EAL ARE THAT THE CASE WAS SELECTED FOR SCRUTINY AND DURING THE COURSE OF PROC EEDINGS, THE ASSESSING ITA NO. 6492/DEL/2012 ASSTT.YEAR: 2009-10 2 OFFICER FOUND THAT THE ASSESSEE DISCLOSED BUSINESS RECEIPTS AFTER DEBITING EXPENSES UNDER VARIOUS HEADS AND THE PROFIT WAS DIS CLOSED FROM BUSINESS AMOUNTING TO RS.13,04,885/-. THE ASSESSEE EXPLAINE D AND SUBMITTED BEFORE THE ASSESSING OFFICER THAT HE WAS CARRYING OUT THE BUSINESS AS A FACILITATOR ARRANGING THE VEHICLES FOR THE CLIENTS AND NOT DOIN G ANY CONTRACT WORK ON THEIR BEHALF, HENCE TDS PROVISION WAS NOT APPLICABL E TO HIS CASE. HOWEVER, REJECTING THE ABOVE SUBMISSION AND EXPLANATION OF T HE ASSESSEE, THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAS MADE P AYMENT TO EACH LORRY OWNER/TRUCK OWNER AND GROSS PAYMENT MADE BY THE ASS ESSEE WAS IN EXCESS OF RS.50,000 DURING THE YEAR IN WHICH TDS WAS TO BE DE DUCTED U/S 194C OF THE INCOME TAX ACT, 1961. THE ASSESSING OFFICER FINALI ZED THE ASSESSMENT BY HOLDING THAT THE EXPENSES CLAIMED ON ACCOUNT OF LOR RY BOOKING WERE NOT ALLOWABLE U/S 40(A)(IA) OF THE ACT BECAUSE THE ASSE SSEE HAD FAILED TO DEDUCT THE TDS AT THE TIME OF MAKING PAYMENT. THE ASSESSI NG OFFICER MADE IMPUGNED ADDITION BY HOLDING AS ABOVE. THE AGGRIEV ED ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX(A) WHI CH WAS ALLOWED AND NOW THE REVENUE IS BEFORE THIS TRIBUNAL IN THIS SEC OND APPEAL WITH THE SOLE GROUND MENTIONED HEREINABOVE. 4. WE HAVE HEARD RIVAL ARGUMENTS OF BOTH THE PARTIE S AND CAREFULLY PERUSED THE RECORD PLACED BEFORE US. LD. DR SUBMIT TED THAT THE ASSESSING ITA NO. 6492/DEL/2012 ASSTT.YEAR: 2009-10 3 OFFICER WAS RIGHT IN MAKING ADDITION BECAUSE THE AS SESSEE WAS UNDER LEGAL OBLIGATION TO DEDUCT TDS AT THE TIME OF MAKING PAYM ENT U/S 194C OF THE ACT. THE DR FURTHER POINTED OUT THAT THE COMMISSIO NER OF INCOME TAX(A) SIMPLY REPRODUCED THE SUBMISSIONS OF THE ASSESSEE A ND THEN DIRECTLY JUMPED TO THE CONCLUSION THAT THE ASSESSEE IS IN THE BUSIN ESS OF HIRING OF TRUCK SIMPLICITOR AND NOT IN THE BUSINESS OF TRANSPORTING GOODS WHICH HE RECEIVED FROM THE OTHER PARTIES. THE DR CONTENDED THAT THE FINDINGS OF THE COMMISSIONER OF INCOME TAX(A) ARE BASELESS AND THE MATTER HAS NOT BEEN ADJUDICATED IN A PROPER MANNER WHILE GRANTING RELIE F TO THE ASESSEE. 5. REPLYING TO THE ABOVE, LD. COUNSEL OF THE ASSESS EE SUBMITTED A COPY OF THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT OF DE LHI DATED 9.1.2013 IN ITA NO. 604/2012 IN THE CASE OF COMMISS IONER OF INCOME TAX VS HARDARSHAN SINGH . IN THIS JUDGMENT PERTAINING TO REAL BROTHER OF T HE ASSESSEE WHO IS ALSO IN THE SAME KIND OF BUSINESS W HICH THE ASSESSEE IS DOING, THE HONBLE HIGH COURT HELD THAT THE CONTRAC T OF TRANSPORTATION WAS BETWEEN THE ASSESSEES CLIENTS AND THE TRANSPORTERS AND THE ASSESSEE HAD MAINLY ACTED AS A FACILITATOR OR AS AN INTERMEDIARY , THEREFORE, THE APPEAL OF THE REVENUE AGAINST THE ORDER OF THE TRIBUNAL HAS B EEN DISMISSED, DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT OBSERVATIONS AND FINDINGS OF HONBLE HIGH COURT READ AS UNDER:- ITA NO. 6492/DEL/2012 ASSTT.YEAR: 2009-10 4 7. IT IS ALSO THE CASE OF THE ASSESSEE THAT IT DID NOT UNDERTAKE ANY CARRIAGE OF GOODS BY ITSELF THROUGH I TS TRUCKS / LORRIES OTHER THAN IN RESPECT OF ITS OWN BOOKING BUSINESS WHICH HAS ALREADY SUFFERED TDS AT THE TIME OF RECEIPT OF PAYMENTS BY THE ASSESSEE. TH E LEARNED COUNSEL FOR THE RESPONDENT/ ASSESSEE REFERR ED TO THE DECISION OF A DIVISION BENCH OF THIS COURT IN T HE CASE OF CIT V. CARGO LINKERS: (2009) 179 TAXMAN 151 (DEL). WE FIND THAT THE SAID DECISION COVERS THE CA SE OF THE ASSESSEE IN ITS FAVOUR. IN CARGO LINKERS (SUPRA ), THE ASSESSEE WAS A PARTNERSHIP FIRM CARRYING ON THE BUSINESS OF CLEARING AND FORWARDING AGENTS AND BOOKING CARGO FOR THE TRANSPORTATION ABROAD BY VARI OUS AIRLINES OPERATING IN INDIA. THE ASSESSEE COLLECTED FREIGHT CHARGES FROM THE EXPORTERS WHO INTENDED TO SEND THE GOODS THROUGH A PARTICULAR AIRLINE AND PAID THE AMOUNT TO THE AIRLINE OR ITS GENERAL SALES AGENTS A ND FOR THE SERVICES RENDERED, THE ASSESSEE CHARGED COMMISS ION FROM THE AIRLINES. ACCORDING TO THE ASSESSING OFFIC ER, IN THAT CASE, THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE ON THE PAYMENTS MADE TO THE AIRLINES. AS CAN BE NOTICED, THE FACTUAL POSITION IS SOMEWHAT SIMILAR T O THE FACTS OF THE PRESENT CASE. HERE ALSO, THE ASSESSEE COLLECTS FREIGHT CHARGES FROM THE CLIENTS WHO INTEN DED TO TRANSPORT THEIR GOODS THROUGH SEPARATE TRANSPORTERS . THE ENTIRE AMOUNT COLLECTED FROM THE CLIENTS IS PAI D TO THE TRANSPORTERS AFTER DEDUCTING COMMISSION FROM TH E SAID AMOUNT. 8. IN CARGO LINKERS (SUPRA), IT WAS CONTENDED ON BE HALF OF THE ASSESSEE THAT THE ASSESSEE WAS NOT THE PERS ON RESPONSIBLE FOR MAKING PAYMENT IN TERMS OF SECTION 194C OF THE SAID ACT. IN THAT CASE, THE TRIBUNAL HA D ALSO NOTED AND FOUND AS A MATTER OF FACT THAT THE ASSESS EE WAS NOTHING BUT AN INTERMEDIARY BETWEEN THE EXPORTE RS AND THE AIRLINES AS IT BOOKED CARGO FOR AND ON BEHA LF OF THE EXPORTERS AND MAINLY FACILITATED THE CONTRACT F OR CARRYING GOODS. THE PRINCIPAL CONTRACT WAS BETWEEN THE EXPORTER AND THE AIRLINE. THIS COURT, IN CARGO LINK ERS (SUPRA), AGREED WITH THE VIEW OF THE TRIBUNAL WHICH HAD ITA NO. 6492/DEL/2012 ASSTT.YEAR: 2009-10 5 MAINLY DECIDED AN ISSUE OF FACT, NAMELY, THE NATUR E OF THE CONTRACT BETWEEN THE PARTIES CONCERNED. THE COU RT ALSO OBSERVED THAT IT HAD ALSO BEEN FOUND AS A MATT ER OF FACT THAT THE CONTRACT WAS ACTUALLY BETWEEN THE EXP ORTER AND THE AIRLINE AND THE ASSESSEE WAS ONLY AN INTERMEDIARY AND, THEREFORE, IT WAS NOT THE PERSON RESPONSIBLE FOR DEDUCTION OF TAX AT SOURCE IN TERM S OF SECTION 194C OF THE SAID ACT. 9. WE FEEL THAT THE DECISION IN CARGO LINKERS (SUPR A) COMPLETELY COVERS THE CASE IN FAVOUR OF THE ASSESSE E AND AGAINST THE RESPONDENT. THE TRIBUNAL HAS ALREADY FO UND AS A MATTER OF FACT THAT THE CONTRACT WAS BETWEEN T HE ASSESSEES CLIENTS AND THE TRANSPORTERS AND THAT TH E ASSESSEE HAD MAINLY ACTED AS A FACILITATOR OR AS AN INTERMEDIARY. 6. REPLYING TO THE SPECIFIC QUERY FROM THE BENCH, L D. DR ACCEPTED THAT THE RELIEF HAS BEEN GRANTED TO THE ASSESSEES REAL BROTHER WHO IS IN THE SAME KIND OF BUSINESS AND THE ORDER OF THE TRIBUNAL GRAN TING RELIEF TO THE ASSESSEE I.E. HARDARSHAN SINGH HAS BEEN UPHELD BY THE HONBL E HIGH COURT. ON CAREFUL PERUSAL OF THIS ORDER OF HONBLE HIGH COURT , WE COME TO A CONCLUSION THAT THE FACTS OF THE PRESENT CASE ARE PARA MATERIA BECAUSE THE SAME ISSUE IS ALSO INVOLVED AND RAISED BY THE REVENUE IN THE PRES ENT APPEAL. ACCORDINGLY, WE HOLD THAT THE PRESENT CASE OF THE ASSESSEE IS AL SO SQUARELY COVERED BY THE ABOVE JUDGMENT OF HONBLE HIGH COURT IN FAVOUR OF T HE ASSESSEE. THEREFORE, THE SOLE GROUND OF THE REVENUE BEING DEVOID OF MERI TS IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ITA NO. 6492/DEL/2012 ASSTT.YEAR: 2009-10 6 ORDER PRONOUNCED IN THE OPEN COURT ON 29.11.2013. SD/- SD/- ( S.V. MEHROTRA ) (CHANDRA MO HAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 29TH NOVEMBER 2013 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR