M/s Uttam Construction Company, RAIPUR (CG) V. Assistant Commissioner of Income tax Circle-1(1), RAIPUR (CG)

ITA 69/BIL/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2287 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 25-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIV VARSHNEY
• Assessee Lawyers: P C M ALOO
• Section: 194C; 263

Judgement Text

1 ITA NO. 69/ BLPR /2012 IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR. BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 69/BLPR/2012 ASSESSMENT YEAR : 2007 - 08. M/S UTTAM CONSTRUCTION COMPANY, ASSTT. COMMISSIONER OF INCOME - TAX, RAIPUR (C.G.) VS. CIRCLE - 1(1), RAIPUR. PAN AABFU3904A. APPELLANT. RESPONDENT. APPELLANT BY : SHRI P.C.MALOO. RESPONDENT BY : SHRI RAJIV VARSHNEY. DATE OF HEARING : 15 - 10 - 2015. DATE OF PRONOUNCEMENT : 30 TH NOV., 2015. O R D E R PER SHRI SHAMIN YAHYA, A.M . THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX, RAIPUR DATED 22 ND MARCH, 2012 AND PERTAINS TO ASSESSMENT YEAR 2007 - 08. THE ISSUE RAISED IS THAT THE LEARNED CIT ERRED IN PASSING ORDER U/S 263 OF THE I.T. ACT. 2. IN THIS CASE THE LEARNED CIT NOTED THAT THE ASSESSEE HAD DEBITED PROFIT AND LOSS ACCOUNT WITH RS.45,61,457/ - TOWARDS MACHINERY HIRE CHARGES. LEARNED CIT FURTHER NOTED THAT ON PAYMENT OF RS.9,45,626/ - PAID TO A MIN STONE TOWARDS HIRE CHARGES OF JCB MACHINE, TAX WAS DEDUCED @ 2.24% UNDER PROVISIONS OF SECTION 194C OF THE I.T. ACT INSTEAD OF SECTION 19 4I OF I.T. ACT WHICH WAS CORRECTLY TO BE APPLIED. FOR REMAINING AMOUNT OF RS.36,15,831/ - , NO DETAILS WERE SUBMITTED. IN THE CIRCUMSTANCES, THE EXPENSES SHOULD NOT HAVE BEEN ALLOWED BY THE AO WITHIN PROVISIONS OF SECTION 40(A)(I)(A). 2 ITA NO. 69/ BLPR /2012 3. NOTICE WAS ISSUED TO THE ASSESSEE. ASSESSEE HAS GIVEN HIS EXPLANATION INTER ALIA THAT SOME PAYMENTS WERE MADE TO VARIOUS PARTIES WHERE INDIVIDUALLY HIRE CHARGES WAS MADE OF LESS THAN RS.1,20,000/ - . FOR SOME OF THE PAYMENT IT WAS PLEADED THAT THE ASSESSEE HAS DEDUCTED TDS A T THE RATE OF 2.24%. IT WAS FURTHER SUBMITTED THAT SECTION 40(A)(( IA ) DOES NOT APPLY WHERE THERE IS A SHORT DEDUCTION OF TDS. IT WAS CLAIMED THAT THE SAME APPLIES ONLY WHERE THERE IS NO DEDUCTION. FOR THIS PROPOSITION THE ASSESSEE RELIED UPON TWO DECISIONS OF ITAT. CONSIDERING THE ABOVE, LEARNED CIT HELD AS UNDER : I HAVE GONE THROUGH THE RECORDS AS WELL AS THE SUBMISSIONS MADE BY THE AR. CONTRARY TO THE CLAIM MADE BY THE AR, THE RECORDS DO NOT REVEAL THAT ANY DETAILS OF PAYMENTS MADE ON HIRE CHARGES TO THE EXTENT OF RS.45,61,457/ - WERE SUBMITTED BEFORE THE AO THE PERIOD WISE BR EAK - UP OF PAYMENT OF HIRE CHARGES, THE DETAILS OF PAYMENT MADE BELOW THE PRESCRIBED LIMITS WERE NOT FILED BEFORE THE AO. THE CLAIM MADE BY THE AR THAT ON PAYMENTS MADE AFTER 13.07. 2006 PROVISIONS OF SEC. 194 C WILL APPLY, IS ALSO NOT CORRECT, IN VIEW OF DECISION OF HONBLE HIGH MADRAS HIGH COURT IN THE CASE OF CIT VS. D. RATHINAM (2011) 335 ITR 101) WHERE IT HAS BEEN HELD THAT WHERE COMPOSITE HIRE CHARGES WERE PAID TOGETHER WITH OPERATING COST PROVISIONS OF SEC. 194 I OF THE IT ACT WILL APPLY. THEREFORE, THIS ORDER DATED 19.11.2009 HAS BEEN PASSED BY THE AO WITHOUT PROPER APPRECIATION OF FACTS AND LAW. IN PARA 5 OF HIS REPLY DATED 20 TH MARCH, 2012, SHRI MALOO HAS HIMSELF AGREED THAT CIT CAN ASSUME REVISIONAL JURISDICTION WHERE THE AO HAS PASSED AN ORDER BY INCORRECT ASSUMPTION OF FACTS OR INCORRECT APPLICATION OF LAW. THE DISCUSSION MADE ABOVE CLEARLY SHOW THAT THE ORDER OF THE AO IS BOTH ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE BECAUSE THE SAME IS PASSED WITHOUT PROPER APPRECIATION OF FACGS AND LAW AS WELL ON FACTS AS ALLOWANCE OF HIRE CHARGES ON MACHINERIES IS CONCERNED. THEREFORE, THE SAME IS SET - ASIDE WITH DIRECTION TO THE AO TO PASS A FRESH ORDER AFTER GIV ING PROPER OPPORTUNITY TO THE ASSESSEE. 3 ITA NO. 69/ BLPR /2012 4. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 5. HAVING HEARD BOTH THE COUNSEL AND PERUSING THE RECORDS, WE FIND THAT AS PER QUERY LETTER ISSUED BY THE AO TO THE ASSESSEE SUBMITTED IN PAPER BOO K PAGE NO. 10 VIDE PARA 15 THE AO HAS REQUISITIONED DETAILS OF EXPENSES MENTIONED U/S 40(A)(IA) ALONG WITH DETAILS OF DEPOSIT OF AMOUNT OF THE TDS. VIDE LETTER DATED 10 - 8 - 2009 VIDE PARA 15 THE ASSESSEE HAS MENTIONED THAT THE DETAILS WERE ENCLOSED THEREWIT H. THE DETAILS WERE ENCLOSED RUNNING INTO FOUR PAGES SUBMITTED IN PAPER BOOK PAGE NOS. 16 TO 19. 6. IN THE BACKGROUND OF AFORESAID FACTUAL ASPECT IT CANNOT BE SAID THAT THE AO HAD NOT MADE NECESSARY ENQUIRIES AND THE DETAILS WERE NOT FURNISHED. HENCE THI S PLANK OF LEARNED CITS ARGUMENT THAT NECESSARY ENQUIRY IS NOT MADE IS NOT SUSTAINABLE. 7. ANOTHER PLANK OF LEARNED CITS ASSUMING JURISDICTION IS THAT THE RATE OF TDS APPLIED IS SHORT. WE FIND THAT THIS ISSUE IS DULY COVERED BY THE ITAT DECISIONS CITED BY THE ASSESSEES COUNSEL BEING ITAT B - BENCH CALCUTTA DECISION IN THE CASE OF D CIT VS. M/S S.K. TEKRIWAL ITA NO. 1135/ KOL /2010 AND ITAT , MUMBAI C - BENCH DECISION IN THE CASE OF DCIT VS. M/S CHANDABHOI AND JASSOBHOI IN ITA NO. 20/MUMBAI/2010. IN THESE DECISIONS IT WAS HELD THAT SECTION 40(A)(IA) IS ATTRACTED IN CASE OF NON DEDUCTION OF TAX AND NOT WHERE THERE IS APPLICATION OF DIFFERENT RATES AND HENCE SHORT DEDUCTION OF TAX. THESE DECISIONS WERE CITED BEFORE THE LEARNED CIT WHO HAS CHOSEN TO IGNORE THE SAME. IN OUR CONSIDERED OPINION, THIS APPROACH OF THE LEARNED CIT IS NOT PROPER. JUDICIAL DISCIPLINE MANDATES THAT WE ADHERE TO THE DOCTRINE OF ST ARE DE CISIS . SINCE THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE, THE JURISDICTION ASSUMED BY THE LEARNE D CIT IS NOT PROPER AND LEGAL. ACCORDINGLY WE QUASH THE ORDER OF LEARNED CIT U/S 263 OF THE I.T.ACT. 4 ITA NO. 69/ BLPR /2012 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF NOV., 2015. SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 30 TH NOV.., 2015. COPY FORWARDED TO : 1. M/S UTTAM CONSTRUCTION COMPANY, HIG - 23, SSURABHI, SECTOR - 1, SHANKAR NAGAR, RAIPUR (C.G. 2. A.C.I.T. CIRCLE - 1(1), RAIPUR. 3. C.I.T., RAIPUR. 4. -- 5. D.R., ITAT, RAIPUR. 6. GUARD FILE TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, NAGPUR WAKODE