ITO, Wd-13(2), Kolkata, Kolkata V. M/s Janin Movers (P) Ltd, Kolkata

ITA 653/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2765 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 05-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C J SINGH
• Assessee Lawyers: M KATARUKA
• Keywords: Wrong claim; Corroborative evidences; TDS
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENC H KOLKATA BEFORE SHRI A.T.VARKEY, JM &DR. A.L.SAINI, AM ./ITA NO.653/KOL/2017 ( / ASSESSMENT YEAR:2012-13) ITO, WARD-13(2), KOLKATA VS. M/S JAIN MOVERS (P) LTD. 16, TARACHAND DUTTA STREET, KOLKATA-700073. ./ ./PAN/GIR NO.: AACCJ 3994 M (ASSESSEE) .. (REVENUE) ASSESSEE BY : SHRI C.J.SINGH, JCIT, SR. DR RESPONDENT BY : SHRI M. KATARUKA, ADVOCATE / DATE OF HEARING : 08/04/2019 /DATE OF PRONOUNCEMENT : 12/06/2019 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED APPEAL FILED BY THE REVENUE, PERTAI NING TO ASSESSMENT YEAR 2012- 13, IS DIRECTED AGAINST AN ORDER PASSED BY THE LE ARNED COMMISSIONER OF INCOME TAX (APPEALS)-5, KOLKATA (IN SHORT THE LD. CIT(A)], W HICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U /S 143(3) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) DATED 28.03.2015. 2. GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS F OLLOWS: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT(A)-5, KOLKATA HAS ERRED IN LAW AS WELL AS IN FA CTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE DISALLOWANCES OF I) RS. 1,94,65,391/- U/S 40A(IA) ON ACCOUNT OF NON-COM PLIANCE WITH THE PROVISION OF SECTION 194C(6) AND 194C(7) OF THE I.T . ACT, 1961. M/S JAIN MOVERS (P) LTD. ITA NO.653/KOL/2017 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 2 22 2 II) RS. 65,27,010/- FOR SUNDRY CREDITORS REMAINED UNEXP LAINED AND UNVERIFIED. 2. THAT THE ORDER OF THE LEARNED CIT(A)-5, KOLKATA IS PERVERSE AND IS BAD IN LAW AS WELL AS SOON FACTS OF THE CASE, HENCE THE SA ME NEEDS TO BE DELETED. 3. THAT THE DEPARTMENT CRAVES TO ADD, MODIFY OR ALT ER THE GROUNDS OF APPEAL DURING THE COURSE OF HEARING OF THE CASE. 3. WE SHALL TAKE ISSUE NO. 1 WHICH RELATES TO DISAL LOWANCE OF RS. 1,94,65,391/- U/S 40A(IA) ON ACCOUNT OF NON-COMPLIANCE WITH SECTION 1 94C(6) AND 194C(7). 4. BRIEF FACTS QUA THE ISSUE ARE THAT DURING THE PR EVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE C OMPANY HAS CLAIMED A DEBIT OF RS. 5,12,74,283/- AS LORRY HIRE CHARGES. DURING T HE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSEE COMPANY WAS ASKED TO PROVI DE THE BREAK-UP AND PROVE WITH SUPPORTING DOCUMENTS OF SUCH EXPENSES CLAIMED. THE A.O. NOTICED THAT IN SPITE OF SUBMITTING THE VERIFIABLE DETAIL, TIME AN D AGAIN THIS HAS BEEN DELIBERATELY AVOIDED FROM THE ASSESSEES END. THE ASSESSEE HAS N OT SUBMITTED DETAILS ON A PARTY WISE BASIS. THE ONUS FOR PARTY WISE IDENTIFICATION WITH NAME, PAN, VEHICLE NO. AND COMPLETE ADDRESS OF EACH SUCH PARTY OR LORRY OWNER LIES WITH THE ASSESSEE. THE A.O. NOTED THAT IN THE ABSENCE OF SUCH PARTY WISE IDENTIFICATION SUCH EXPENSES REMAINS UNSUBSTANTIATED AND SO UNVERIFIED AND UNPRO VEN. MOREOVER, THIS IS ALSO IN CONTRAVENTION OF THE PROVISIONS AS U/S 194C(6) , 1 94C(7), 40A(IA) OF THE ACT. THE A.O. NOTICED THAT THE ASSESSEE COMPANY HAS SOUGHT E XEMPTION TO THE STATUTORY FLINGS AS ENSHRINED IN SECTION 194C(6). HOWEVER, A. O. WAS OF THE OPINION THAT THE SAID EXEMPTION IS ALLOWABLE ONLY WHEN THE ASSESSEE HAS COMPLIED WITH THE PROVISIONS OF SECTION 194C(7) OF THE ACT. THE RELEV ANT CLAUSE IS REPRODUCED BELOW: ........ (7) THE PERSON RESPONSIBLE FOR PAYING OR C REDITING ANY SUM TO THE PERSON REFERRED TO IN SUB-SECTION (6) SHALL FURNISH, TO TH E PRESCRIBED INCOME-TAX AUTHORITY OR THE PERSON AUTHORIZED BY IT, SUCH PARTICULARS, I N SUCH FORM AND WITHIN SUCH TIME AS MAY BE PRESCRIBED. SINCE THE ASSESSEE COMPANY HAS NOT FILED ANY EVIDEN CE OF COMPLYING WITH THE PROVISIONS OF SECTION 194C(7). M/S JAIN MOVERS (P) LTD. ITA NO.653/KOL/2017 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 3 33 3 IN VIEW OF THE ABOVE, THE SUM OF RS. 1,94,65,391/-S HOWN AS LORRY HIRE CHARGES WAS THEREFORE DISALLOWED U/S.40(A)(IA) ON ACCOUNT OF NO N-COMPLIANCE WITH THE PROVISIONS OF SECTION 194C(6)& 194C (7) OF THE INCO ME TAX ACT, 1961. 5. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. AGGRIEVED THE REVENUE IS IN APP EAL BEFORE US. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE AO HAS MADE THE DISALLOWANCE ON TH E PREMISES THAT THE EXEMPTION FROM DEDUCTION OF TDS U/S 194C(6) OF THE ACT IS AVAILABLE ONLY WHEN A COMPLIANCE IS MADE TO THE PROVISION OF SECTION 194C (7) OF THE I. T. ACT, 1961. IT WAS NOTED BY THE AO THAT THE APPELLANT DID NOT REPO RT NIL DEDUCTION FROM TRANSPORTER IN FORM-26Q. THE AO HAS REJECTED THE AP PELLANT'S CONTENTION THAT TDS WAS NOT DEDUCTIBLE IN CASES WHERE PANS OF TRANSPORT ER PAYEES ARE FURNISHED AS HE THOUGHT THAT NON- FURNISHING OF PANS IN RESPECT OF PAYEE TRANSPORTERS IN FORM-26Q DISQUALIFIED HIM FROM THE BENEFIT OF SECTION 194C(6 ) OF THE INCOME TAX ACT, 1961. WE NOTE THAT THE CO-ORDINATE BENCH OF HYDERABAD INCOME TAX APPELLATE TRIBUNAL IN THE CASE OF ACIT VS MOHAMMED SUHAIL IN ITA NO. 1536/HYD/2014 DATED 13.02.2015 HAS HELD THAT ONCE THE APPELLANT OBTAINED PAN OF THE DEDUCTEES, HE WAS NOT REQUIRED TO DEDUCT TAX AS PER SECTION 19 4C(6} OF THE ACT EVEN WHEN THE APPELLANT FAILS TO FURNISH DETAILS IN FORM-26Q IN T ERMS OF SECTION 194C(7) OF THE I.T. ACT, 1961. WE NOTE THAT REQUIREMENT U/ S 194C (7) OF THE ACT HAPPENS LATER IN TIME AFTER THE LIABILITY U/S 194C(6) OF THE ACT AR ISES. ACCORDING TO THE DECISIONS RELIED UPON SECTION 194C(7) AND SECTION 194C(6) OF THE ACT ARE INDEPENDENT TO EACH OTHER. FAILURE TO COMPLY U/S 194C(7) OF THE A CT DOES NOT RESURRECT THE LIABILITY U/S 194C(6) OF THE ACT, WHICH DID NOT EXI ST ONCE THE TRANSPORTER DEDUCTEES FURNISHED PANS TO THE APPELLANT. THE LIABILITY TO D EDUCT TAX U/S 194C GOES AWAY ONCE PANS ARE FURNISHED TO THE APPELLANT. DEDUCTING TDS IN THE FACE OF FURNISHING OF PANS WOULD HAVE BEEN ILLEGAL. LATER DEFAULT OF N OT FILING DETAILS IN FORM 26Q DOES NOT RESURRECT THE LIABILITY TO DEDUCT TDS. TH EREFORE RESPECTFULLY FOLLOWING THE JUDGMENT OF CO-ORDINATE BENCH IN THE CASE OF MO HAMMAD SUHAIL (SUPRA), WE M/S JAIN MOVERS (P) LTD. ITA NO.653/KOL/2017 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 4 44 4 ARE OF THE VIEW THAT THERE IS NO INFIRMITY IN THE O RDER PASSED BY LD. CIT(A). THEREFORE WE CONFIRM THE ORDER OF THE LD. CIT(A) AN D DISMISS THE GROUND RAISED BY THE REVENUE. 7. GROUND NO. 2 RAISED BY THE REVENUE WHICH RELATES TO DISALLOWANCE OF RS. 65,27,010/- FOR SUNDRY CREDITORS REMAINED UNEXPLAIN ED AND UNVERIFIED. 8. BRIEF FACTS QUA THE ISSUE ARE THAT THE AO NOTICE D THAT THE ASSESSEE COMPANY, SUBMITTED A LIST OF PARTIES WHICH IT CLAIMED TO BE THE 'DETAILS OF SUNDRY CREDITORS FOR LORRY HIRE CHARGES'. THIS CONSISTED OF A LIST O F UNNUMBERED PARTIES, FOR THE ACCOUNTING YEAR 2011-12 WITH PARTY NAME, PAN AND AM OUNT. NO SUPPORTING EVIDENCE WAS FILED BY THE ASSESSEE VIS-A-VIS THE C LAIMS MADE IN THE SUBMISSION. THUS, THE ENTIRE SUNDRY CREDITOR LIST REMAINED UNEX AMINED AND UNVERIFIED HENCE THE A.O. MADE ADDITION OF RS. 65,27,010/-. 9. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE A.O. HAS ADDED ALL OF SUNDRY CRED ITORS. IT TANTAMOUNT TO TREATING THE WHOLE OF SUNDRY CREDITORS AS BOGUS. THERE IS NO SPECIFIC FINDING AS TO WHY ALL THE CREDITORS ARE TREATED AS BOGUS EXCEPT FOR THE A .O.S OBSERVATIONS THAT ADDRESSES WERE NOT GIVEN. THE APPELLANT'S CLAIM IS THAT IN TH IS TRADE PANS AND TRANSACTING PARTY NAMES ARE CUSTOMARILY TAKEN. IN OTHER WORDS, THE CLAIM IS THAT ADDRESSES ARE NOT KEPT IN RECORD AS NAMES AND PANS ARE CLAIMED TO FORM COMPLETE IDENTITY. IT IS CLAIMED THAT THE PARTIES TAKE ADVANCE PAYMENTS AND ON DELIVERY OR SOON AFTER THE BALANCE PAYMENTS ARE CLAIMED BY THE VARIOUS TRANSPO RTERS. WE NOTE THAT IT IS PERTINENT TO TAKE NOTE OF THE APPELLANT'S CLAIM THA T IN LATER TWO YEARS IN RESPECT OF WHICH ASSESSMENTS U/S 143(3) OF THE ACT WERE COMPLE TED, NO PART OF SUNDRY CREDITORS WAS DISALLOWED BY THE AO, WHO SEEMS TO HA VE BEEN SATISFIED WITH PANS AND NAMES OF THE TRANSPORTER PAYEES. THE ASSESSMENT SEEMS TO HAVE BEEN CARRIED M/S JAIN MOVERS (P) LTD. ITA NO.653/KOL/2017 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 5 55 5 OUT VERY CLOSE TO THE TIME BARRING DATE AND THE A.O SEEMS TO HAVE THUS RUSHED TO THE SAID CONCLUSION WITHOUT ENQUIRING INTO THE RELE VANT FACTS. IN OUR VIEW, PAN AND NAMES COULD HAVE BEEN FOLLOWED UP WITH PAN DATA BAS E AND AT LEAST IN SOME OF THE CASES INQUIRY COULD HAVE BEEN DONE IF THE AO SU SPECTED BOGUS CLAIMS. BUT THE AO HAS SIMPLY DECIDED TO MAKE DISALLOWANCE OF ALL T HE CREDITORS WHICH IS CLOSELY LINKED TO LORRY HIRE CHARGE PAYMENTS. LORRY HIRE CH ARGES HAVE NOT BEEN SCRUTINIZED SO AS TO SEE WHETHER ANY PART OF THAT WAS BOGUS WHE REAS THE WHOLE OF SUNDRY CREDITORS HAVE BEEN TREATED AS BOGUS. THE TWO TREAT MENTS ARE CONFLICTING IN VIEW OF SOME OF THE CREDITORS CONTINUING TO TRANSACT IN LAT ER YEARS AND THAT THE A.O ACCEPTED THE SUNDRY CREDITORS IN TOTO IN THE SAID T WO YEARS AFTER THE CURRENT ASSESSMENT YEAR. THE AO'S ACTION APPEARS ARBITRARY AND, THEREFORE, CANNOT BE SUSTAINED. THEREFORE WE DO NOT FIND ANY INFIRMITY I N THE ORDER OF LD. CIT(A), HENCE WE ACCEPT AND APPROVE THE ORDER PASSED BY LD. CIT(A ) AN DISMISS THE GROUNDS RAISED BY THE REVENUE. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 12.06.2019 SD/- ( A.T.VARKEY ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 12/06/2019 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. ITO, WARD-13(2), KOLKATA 2. M/S JAIN MOVERS (P) LTD. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES