Chandana Brothers (Guntur & Kurnool Branch), V. Addl CIT, Rajahmundry

ITA 68/VIZ/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62828 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-04-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 09-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SHANKAR NARAYAN
• Section: 194C

Judgement Text

ITA NO.68-70, 80, 87 OF 2009 VIZAG- CHANDANA BROT HERS PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO. 68 / VIZAG/20 09 ASSESSMENT YEAR: 2006 - 07 CHANDANA BROTHERS, B. O. GUNTUR, KURNOOL. VS. ADDL CIT, RAJAHMUNDRY RANGE, RAJAHMUNDRY. (APPELLANT) PAN NO: AABFC4440R (RESPONDENT) ITA NO.6 9 /VIZAG/2009 ASSESSMENT YEAR: 2006 - 07 CHANDANA BROTHERS, B.O VIJAYAWADA, VIZIANAGARAM. VS. ADDL CIT, RAJAHMUNDRY RANGE, RAJAHMUNDRY. (APPELLANT) PAN NO: AABFC4638D (RESPONDENT) ITA NO. 70 /VIZAG/2009 ASSESSMENT YEAR: 2006 - 07 CHANDAN A BROTHERS, B.O PATNEY CENTRE, SECUNDERABAD. VS. ADDL CIT, RAJAHMUNDRY RANGE, RAJAHMUNDRY. (APPELLANT) PAN NO: AABFC4642H (RESPONDENT) ITA NO. 8 0 /VIZAG/2009 ASSESSMENT YEAR: 2006 - 07 CHANDA NA BROTHERS, B.O ELURU, ELURU. VS. ADDL CIT, RAJAHMUNDRY RANGE, RAJAHMUNDRY. (APPELLANT) PAN NO: AADFC6741P (RESPONDENT) ITA NO. 87 /VIZAG/2009 ASSESSMENT YEAR: 2006 - 07 CHANDA NA BROTHERS, B.O CHIKKADAPALLI, HYDERABAD. VS. ADDL CIT, RAJAHMUNDRY RANGE, RAJAHMUNDRY. (APPELLANT) PAN NO: AADFC3501H (RESPONDENT) ITA NO.68-70, 80, 87 OF 2009 VIZAG- CHANDANA BROT HERS PAGE 2 OF 5 APPELLANT BY: SHRI GVN HARI, CA RESPONDENT BY: SHRI RAVI SHANKAR NARAYAN, SR DR DATE OF HEARING: 11.04.2012 DATE OF PRONOUNCEMENT: 13 .04.201 2 ORDER PER BENCH: ALL THESE APPEALS, FILED BY THE RESPECTIVE ASSESSE ES, ARE DIRECTED AGAINST THE ORDERS PASSED BY LEARNED CIT(A), RAJAHM UNDRY IN THEIR RESPECTIVE HANDS AND ALL THE APPEALS RELATE TO THE ASSESSMENT YEAR 2006 07. SINCE THE ISSUE URGED IN THIS APPEAL IS IDENTI CAL IN NATURE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO MMON ORDER. 2. THE APPEALS NUMBERED AS ITA NO.68 TO 70 ARE BARRED BY LIMITATION BY THREE DAYS. THE ASSESSEES HAVE FILED PETITIONS REQ UESTING THE BENCH TO CONDONE THE DELAY. HAVING REGARD TO THE SUBMISSION S MADE IN THE SAID PETITION, THE DELAY IS CONDONED AND THE APPEALS ARE ADMITTED FOR HEARING. 3. IN ALL THESE APPEALS, THE ASSESSEES ARE ASSA ILING THE DECISION OF LEARNED CIT(A) IN CONFIRMING THE ADDITION MADE UNDE R SECTION 40(A)(IA) OF THE ACT IN RESPECT OF LORRY FREIGHT PAYMENTS FOR NO N-DEDUCTION OF TAX AT SOURCE UNDER SECTION 194C OF THE ACT. 4. IN THE GROUNDS OF APPEAL, THE ASSSSEES HAVE CLAIMED THAT THERE IS NO LIABILITY TO DEDUCT TAX AT SOURCE UNDER SECTION 194 C OF THE ACT AS THERE IS NO CONTRACT BETWEEN THE ASSESSEES AND THE LORRY OWNERS . HOWEVER, AT THE TIME OF HEARING, THE LEARNED A.R SUBMITTED THAT THE LORRY FREIGHT IN ALL THE CASES HAS BEEN PAID FULLY BEFORE THE END OF THE REL EVANT FINANCIAL YEAR AND HENCE, IN VIEW OF THE DECISION OF VISAKHAPATNAM SPE CIAL BENCH OF ITAT IN ITA NO.68-70, 80, 87 OF 2009 VIZAG- CHANDANA BROT HERS PAGE 3 OF 5 THE CASE OF MERILYN SHIPPING & TRANSPORTS, WHICH WA S PRONOUNCED ON 09- 04-2012, THE DISALLOWANCE UNDER SECTION 40(A)(IA) I S NOT WARRANTED. ACCORDINGLY HE SUBMITTED THAT THE DECISION OF SPECI AL BENCH REFERRED (SUPRA) MAY BE APPLIED TO THE FACTS OF THE INSTANT CASES AND RELIEF MAY BE GRANTED. 5. ON THE CONTRARY, THE LEARNED D.R SUBMITTED T HAT THE PROVISIONS OF SEC. 40(A)(IA) OF THE ACT SHALL APPLY TO ALL PAYMENTS CO VERED BY SEC. 194C OF THE ACT WHETHER THEY HAVE ALREADY BEEN PAID OR REMAIN A S PAYABLE AS AT THE END OF THE RELEVANT FINANCIAL YEAR. HE DREW SUPPOR T FROM THE FOLLOWING CASE LAW:- (A) DEYS MEDICALS (UP) (P) LTD (216 ITR 83 (ALL )) (B) SREE CHAUDHRY TRANSPORT (225 CTR 125 (RAJ)) (C) CIT VS. ORIENT GOA (P) LTD (325 ITR 554 (BOM )) 6. WE HAVE HEARD THE RIVAL CONTENTIONS. THE IS SUE VIZ., WHETHER THE PROVISIONS OF SEC.40(A)(IA) WOULD APPLY TO ALL PAYM ENTS MADE DURING THE COURSE OF THE YEAR OR IT WOULD APPLY ONLY TO THE EX PENDITURE WHICH REMAIN PAYABLE AS AT THE END OF RELEVANT YEAR WAS CONSIDER ED BY THE VISAKHAPATNAM SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORTS, REFERRED (SUPRA) AND THE SPECIAL BENCH, BY MAJORITY VIEW, HAS HELD THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT WOULD AP PLY ONLY TO THE EXPENDITURE WHICH IS PAYABLE AS ON 31 ST MARCH OF EVERY YEAR AND CANNOT BE INVOKED TO DISALLOW THE AMOUNTS WHICH HAVE ALREADY BEEN PAID DURING THE PREVIOUS YEAR WITHOUT DEDUCTING TAX AT SOURCE. WIT H REGARD TO THE DECISIONS RELIED UPON BY THE LEARNED D.R, IT WAS SPECIFICALLY OBSERVED AT PARAGRAPH 11 OF THE JUDICIAL MEMBERS ORDER THAT THE SPECIFIC ISSUE REGARDING PAID, CREDITED OR PAYABLE HAS NOT BEEN CONSIDERED IN THOSE DECISIONS AND EVEN IT WAS NOT ARGUED. ACCORDINGLY IT WAS HELD BY THE JUDICIAL MEMBER THAT THESE JUDGMENTS WILL IN NO WAY AFFECT THE ISSUE BEF ORE THEM. ACCORDINGLY, BY FOLLOWING THE DECISION RENDERED BY THE SPECIAL B ENCH REFERRED (SUPRA), WE HOLD THAT THE PROVISIONS OF SEC.40(A)(IA) WOULD APPLY ONLY TO THE ITA NO.68-70, 80, 87 OF 2009 VIZAG- CHANDANA BROT HERS PAGE 4 OF 5 EXPENDITURE WHICH REMAIN PAYABLE AS AT THE END OF T HE RELEVANT FINANCIAL YEAR. 7. THE LEARNED D.R SUBMITTED THAT THERE WAS NO OCCASION FOR THE ASSESSING OFFICER TO EXAMINE WHETHER THE IMPUGNED E XPENDITURE HAS ALREADY BEEN PAID OR REMAIN OUTSTANDING AS AT THE E ND OF THE RELEVANT FINANCIAL YEAR AND ACCORDINGLY SUBMITTED THAT THE M ATTER MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR CARRYING O UT NECESSARY VERIFICATION. WE FIND MERIT IN THE CONTENTION OF THE LEARNED D.R. ACCORDINGLY, WE SET ASIDE THIS ISSUE TO THE FILE OF THE ASSESSING OFFIC ER WITH A DIRECTION TO EXAMINE WHETHER THE RELEVANT EXPENDITURE REMAIN PAY ABLE AS AT THE YEAR END OR NOT AND APPLY THE PROVISIONS OF SEC. 40(A)(I A) ONLY IN RESPECT OF THE AMOUNT WHICH REMAIN PAYABLE AS AT THE YEAR END. 8. IN THE RESULT, ALL THE APPEALS OF THE ASSESS EE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 13.04.2012. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER VISAKHAPATNAM, DATE: 13 TH APR12 COPY TO 1 . CHANDANA BROTHERS, B.OS GUNTUR & KURNOOL, HO TADITHOTA, RAJAHMUNDRY 2 . CHANDANA BROTHERS, B.OS VIJAYAWADA, VIZIANAGARAM, HO CHANDANA COMPLEX, TADITHOTA, DR NO.45-12-17/1, RAJAHMUNDRY. 3 . CHANDANA BROTHERS, B.OS PATNEY CENTRE, SECUNDERABAD , HO TADITHOTA, RAJAHMUNDRY 4 . CHANDANA BROTHERS, B.OS ELURU, HO TADITHOTA RAJAHMUNDRY 5. CHANDANA BROTHERS, B.OS CHIKKADAPALLI, HYDERABAD HO TADITHOTA, RAJAHMUNDRY. ITA NO.68-70, 80, 87 OF 2009 VIZAG- CHANDANA BROT HERS PAGE 5 OF 5 6. THE ADDL CIT, RAJAHMUNDRY RANGE, RAJAHMUNDRY. 7. 8. THE CIT RAJAHMUNDRY THE CIT(A), RAJAHMUNDRY. 9. THE DR, ITAT, VISAKHAPATNAM. 10 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM