Sri.Jobrun G.Varghese, Kollam V. ACIT, Kollam

ITA 7/COCH/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81323 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 09-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M ANIL KUMAR
• Assessee Lawyers: A S NARAYANAMURTHY
• Section: 194C

Judgement Text

1 ITA NO.07-09/COCH/2013 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI CHANDRA PO OJARI (AM) I.T.A NO. 07/COCH/2013 (ASSESSMENT YEAR 2009-10) SHRI JOBRUN G VARGHESE VS ACIT, CENTRAL CIRCLE 1 M/S LOURDES MATHA CASHEW INDUSTRIES KOLLAM PUTHOOR PO, KOTTARAKA KOLLAM PAN : AAZPV5192P (APPELLANT) (RESPONDENT) I.T.A NO. 08/COCH/2013 (ASSESSMENT YEAR 2009-10) SHRI BABU OOMMEN VS ACIT, CENTRAL CIRCLE 1 M/S ALPHONSA CASHEW INDUSTRIES KOLLAM PUTHOOR PO, KOTTARAKA KOLLAM PAN : AADPO7373B (APPELLANT) (RESPONDENT) I.T.A NO. 09/COCH/2013 (ASSESSMENT YEAR 2009-10) SHRI JOB G OOMMEN VS ACIT, CENTRAL CIRCLE 1 M/S PENIEL CASHEW CO KOLLAM PUTHOOR PO, KOTTARAKA KOLLAM PAN : AADPO9275G (APPELLANT) (RESPONDENT) 2 ITA NO.07-09/COCH/2013 APPELLANTS BY : SHRI A.S. NARAYANAMURTHY RESPONDENT BY : SHRI M ANIL KUMAR, CIT DATE OF HEARING : 06-08-2014 DATE OF PRONOUNCEMENT : 14-08-2014 O R D E R PER N.R.S. GANESAN (JM) THESE THREE APPEALS FILED BY THREE DIFFERENT ASSES SEES ARE DIRECTED AGAINST THE THREE INDEPENDENT ORDERS OF THE CIT(A)- III, KOCHI. SINCE COMMON ISSUE IS INVOLVED IN ALL THE APPEALS, WE HEA RD THE SAME TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER. 2. SHRI. A.S. NARAYANAMURTHY, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS WITH REGARD TO DISALLOWANCE MADE BY THE ASSESSING OFFICER FOR NOT DEDUCTING TAX AT THE TIME OF PAYMENT. ACCORDING TO THE LD.REPRESENTATIV E, THE ASSESSEE HIRED LORRIES AND TRAILERS FOR CARRIAGE OF GOODS FROM TUT ICORIN PORT TO KOLLAM. ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESSEE IS ENGAGED ITSELF IN THE BUSINESS OF EXPORT OF CASHEW KERNELS. THE LD.REPRE SENTATIVE SUBMITTED THAT THERE IS NO AGREEMENT EITHER ORAL OR WRITTEN BETWEE N THE ASSESSEE AND THE TRANSPORTER. ACCORDING TO THE LD.REPRESENTATIVE, T HE ASSESSEE SIMPLY HIRED THE LORRY AND PAID HIRE CHARGES, THEREFORE, THE PRO VISIONS OF SECTION 194C ARE NOT APPLICABLE. ON A QUERY FROM THE BENCH WHET HER THE WORK OF 3 ITA NO.07-09/COCH/2013 TRANSPORTATION OF THE GOODS WAS ENTRUSTED TO THE TR ANSPORTER, THE LD.REPRESENTATIVE CLARIFIED THAT THE WORK WAS NOT E NTRUSTED TO THE TRANSPORTER. THE ASSESSEE HIRED THE LORRY AND TRAN SPORTED THE GOODS BY THEMSELVES. ON A QUERY FROM THE BENCH IF THE ASSES SEE HIRED THE LORRY AND PAID HIRE CHARGES, THEN THE TAX OUGHT TO HAVE BEEN DEDUCTED U/S 194-I OF THE ACT, THE LD.REPRESENTATIVE SUBMITTED THAT THE D ISALLOWANCE WAS MADE BY THE ASSESSING OFFICER ONLY U/S 194C, THEREFORE, THE QUESTION OF DEDUCTION U/S 194-I DOES NOT ARISE FOR CONSIDERATION. THE LD .REPRESENTATIVE FURTHER SUBMITTED THAT HE HAS NO OBJECTION IN REMITTING THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER WHETHER IT IS CO NTRACT FOR WORK OR IT IS HIRING OF TRAILER / LORRY FOR TRANSPORT OF GOODS. THE LD.REPRESENTATIVE RELIED UPON THE FOLLOWING JUDGMENTS: (1) CIT VS UNITED RICE LAND LTD 322 ITR 594 (P&H) (2) CIT VS POOMPUHAR SHIPPING CORPORATION LTD 282 I TR 3 (MAD) (3) DCIT VS SHRI REEZ KARAKKATTIL RAGHAVAN FRIENDS TRANSPORT CO 140 ITD 598 (COCH) 3. ON THE CONTRARY, SHRI M ANIL KUMAR, THE LD.DR SU BMITTED THAT FROM THE ORDER OF THE LOWER AUTHORITIES IT APPEARS THAT THE ASSESSEE ENTRUSTED THE WORK OF TRANSPORTING THE GOODS TO THE CONTRACTO R / TRANSPORTER. THEREFORE, THE ASSESSING OFFICER FOUND THAT THE ASS ESSEE HAS TO DEDUCT TAX U/S 194C OF THE ACT. THE ASSESSEE HAS NOT FILED AN Y MATERIAL BEFORE THE 4 ITA NO.07-09/COCH/2013 LOWER AUTHORITIES TO INDICATE THAT IT IS NOT CONTRA CT FOR WORK BUT ONLY HIRING OF THE LORRY. THE DETAILS OF PAYMENT OF HIRE CHARGES AND THE INVOICES ISSUED BY THE TRANSPORTER WERE NOT FILED BEFORE THE LOWER AUTHORITIES. THE LD.REPRESENTATIVE FURTHER SUBMITTED THAT EVEN IF IT IS HIRE CHARGES FOR HIRING OF THE LORRIES / TRAILERS, THE ASSESSEE IS SUBJECTED T O DEDUCT TAX U/S 194-I OF THE ACT. SINCE THE ASSESSEE HAS NOT DEDUCTED THE TAX O N PAYMENT TO THE TRANSPORTER, ACCORDING TO THE LD.REPRESENTATIVE, TH E LOWER AUTHORITY HAS RIGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE PROV ISIONS OF SECTION 194C WERE EXAMINED BY THIS TRIBUNAL ELABORATELY IN REEZ KARAKKATTIL RAGHAVAN FRIENDS TRANSPORT COMPANY (SUPRA). THIS TRIBUNAL F OUND THAT WHEN THE WORK OF TRANSPORTING THE GOODS WAS ENTRUSTED TO THE TRANSPORTER, THEN IT WILL AMOUNT TO CONTRACT FOR WORK, THEREFORE, THE ASSESSE E HAS TO DEDUCT TAX U/S 194C OF THE ACT. IN CASE THE ASSESSEE HIRED THE LO RRY / TRAILER AND UNDERTOOK THE TRANSPORT OF GOODS BY HIMSELF BY PAYI NG THE HIRE CHARGES ONLY TO THE LORRY OWNERS, THEN IT IS ONLY HIRING OF THE LORRY, THEREFORE, THE ASSESSEE NEED NOT DEDUCT TAX U/S 194C OF THE ACT. HOWEVER, IN THE CASE OF REEZ KARAKKATTIL RAGHAVAN FRIENDS TRANSPORT COMP ANY (SUPRA) THE ASSESSMENT ORDER WAS FOR THE ASSESSMENT YEAR 2006-0 7 WHERE THE PROVISIONS OF SECTION 194-I WAS NOT APPLICABLE WHER EAS THE ASSESSMENT 5 ITA NO.07-09/COCH/2013 YEAR UNDER CONSIDERATION IS 2009-10. THEREFORE, TH E PROVISIONS OF SECTION 194-I IS VERY MUCH APPLICABLE FOR THE YEAR UNDER CO NSIDERATION. SINCE SECTION 194-I IS APPLICABLE FOR THE YEAR UNDER CONS IDERATION, EVEN IF IT IS HIRE CHARGES, THE ASSESSEE HAS TO NECESSARILY DEDUCT TAX . 5. HOWEVER, THE ASSESSING OFFICER HAS TO FIND OUT W HETHER IT IS A CONTRACT FOR WORK OR HIRING OF THE LORRY / TRAILER FOR EXECU TING THE WORK AND THEREAFTER THE ASSESSING OFFICER SHALL DECIDE THE ISSUE IN THE LIGHT OF THE DECISION OF THIS TRIBUNAL IN THE CASE OF REEZ KARAKKATTIL RAGHA VAN FRIENDS TRANSPORT COMPANY (SUPRA). ACCORDINGLY, THE ORDERS OF LOWER AUTHORITIES ARE SET ASIDE AND THE ISSUE OF DEDUCTION OF TAX IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE- EXAMINE THE ISSUE AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW A FTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. IN THE RESULT, ALL THE THREE APPEALS OF THE ASSE SSEES ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH AUGUST, 2014. SD/- SD/- (CHANDRA POOJARI) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 14 TH AUGUST, 2014 PK/- 6 ITA NO.07-09/COCH/2013 COPY TO: 1. SHRO JOBRUN G VARGHESE, LOURDES MATHA CASHEW IND USTRIES, PUTHOOR P.O, KOTTARAKKARA, KOLLAM / SHRI BABU OOMMEN, ALPHO NSA CASHEW INDUSTRIES, PUTHOOR P.O, KOLLAM / SHRI JOB G OOMMEN , PENIEL CASHEW CO, PUTHOOR PO, KOTTARAKKARA, KOLLAM 2. THE ACIT, CENT.CIR.1, KOLLAM 3. THE COMMISSIONER OF INCOME-TAX (CENTRAL), KOCHI 4. THE COMMISSIONER OF INCOME-TAX(A)-III, KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH