Sri Rinku Mallick, South 24 Parganas V. ITO, Ward-53(1), Kolkata, Kolkata

ITA 70/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54691 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2011
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 23-06-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 13-01-2010
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR CIT
• Assessee Lawyers: SOUMITRA CHOW DHURY
• Section: 194C

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B, KOLKATA () BEFORE . .. . , , , , !, SHRI N.VIJAYAKUMARAN, JUDICIAL MEMBER. ' ' ' ' /AND . .. .#$ #$#$ #$. .. . , %& ! SHRI C.D.RAO, ACCOUNTANT MEMBER '' '' '' '' / ITA NO .70 /KOL/2010 () *+/ ASSESSMENT YEAR : 2006-07 (-. / APPELLANT ) SHRI RINKU MALLICK, KOLKATA (PAN: AJKPM 4687 N) - - - VERSUS - . (01-./ RESPONDENT ) I.T.O., WARD-53(1), KOLKATA -. 2 3 %/ FOR THE APPELLANT: SHRI SOUMITRA CHOWDHURY 01-. 2 3 %/ FOR THE RESPONDENT: SHRI NIRAJ KUMAR, CIT 4 2 $& /DATE OF HEARING : 24.11.2011. 5* 2 $& /DATE OF PRONOUNCEMENT : 05.12.2011. %6 / ORDER ( (( ( . .. .#$ #$#$ #$. .. . ) )) ), , , , %& ! PER SHRI C.D.RAO, AM THIS APPEAL IS FILED BY ASSESSEE AGAINST THE ORDER DATED 17.09.2009 OF THE CIT(A)-XXXIII, KOLKATA PERTAINING TO A.YR. 2006-07. 2. THE ONLY ISSUE RAISED BY ASSESSEE IS RELAT ING TO THE DISALLOWANCE OF RS.2,38,12,919/- BY APPLYING THE PROVISIONS OF SECT ION U/S 40(A)(IA) OF THE IT ACT. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT WHI LE DOING THE SCRUTINY ASSESSMENT ASSESSING OFFICER HAS DISALLOWED AN AMOUNT OF RS.2, 38,12,919/- BY OBSERVING THAT ON EXAMINING THE KARGAR PAYMENT DETAILS FROM THE B OOKS OF ACCOUNTS AND SUPPORTING DOCUMENTS PRODUCED, IT APPEARS THAT THERE WERE ALSO PAYMENTS TO KARGARS I.E. LABOUR CHARGES NOT EXCEEDING RS.50,000/- DURING THE PREVIO US YEAR. THIS PAYMENTS AGGREGATED TO RS.9,58,635/- FOR THE PREVIOUS YEAR. SO, EXCEPT THIS AMOUNT, THE ENTIRE LABOUR CHARGES EXPENDITURE CLAIMED BY THE ASSESSEE IS BEING DISALLOWED AS PER PROVISIONS OF SEC.40(A)(IA) READ WITH PROVISO TO SE C.194C(2) OF THE I.T.ACT. THEREFORE, 2 AN ADDITION OF RS.2,38,12,919/- (LABOUR CHARGES CLA IMED AS EXPENDITURE BY THE ASSESSEE OF RS.2,47,71,554/- - THE AMOUNT OF LABOUR CHARGES WHICH DID NOT EXCEED RS.50,000/- TO KARIGARS AND ASSESSEE AS PER SEC. 40 (A)(IA) HAD NO LIABILITY TO DEDUCT TAX AT SOURCE ON RS.9,58,635) IS BEING MADE BY DISALLOW ANCE OF LABOUR CHARGES AND ADDED BACK TO THE TOTAL INCOME DISCLOSED IN THE RETURN. 3.1. ON APPEAL THE LD. CIT(A) HAS CONFIRMED TH E SAME. 3.2. AGGRIEVED BY THIS ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. AT THE TIME OF HEARING THE LD. COUNSEL AP PEARING ON BEHALF OF ASSESSEE SUBMITTED THAT BY REFERRING TO THE VARIOUS TRIBUNAL JUDGEMENTS OF KOLKATA BENCHES THAT PROVISION OF SECTION 194C OF THE IT ACT IS NOT APPLICABLE IN THE CASE OF INDIVIDUALS. FOR A.YR. 2006-07 CONSEQUENTLY THE ADD ITION MADE U/S40(A)(IA) OF THE IT ACT IS NOT APPLICABLE IN THE PRESENT FACTS AND CIRC UMSTANCES OF THE CASE. 5. ON THE OTHER HAND, THE LD. DR APPEARIN G ON BEHALF OF THE REVENUE HAS RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON PERUSAL OF MATERIALS AVAILABLE ON RECORD THE UNDISPUTED FACT IS THAT IN THIS CASE THE ASSESSEE IS AN INDIVIDUAL AND IT IS ALSO A FACT THAT THIS TRIBUNAL HAS CONSISTENTLY TAKING A VIEW THAT THE PROVISION OF SECTION 194C(1) IS APPLICABLE TO THE INDIVIDUAL ASSESSEE W. E.F 01.06.2007. SINCE THE ASSESSMENT YEAR INVOLVED IN THIS APPEAL IS 2006-07 WE ARE OF THE VIEW THAT THE REVENUE IS NOT JUSTIFIED IN DISALLOWING EXPENDITURE U/S 40A(IA) OF THE ACT. 6.1. FOR READY REFERENCE WE REPRODUCE THE OBSE RVATIONS OF THE TRIBUNAL IN THE CASE OF AJAY RAWLA VS DCIT.CIRCLE-28, KOLKATA VIDE ITA N O.353/KOL/2010 DATED 22.06.2011 WHICH IS AS UNDER :- 3. AFTER HEARING THE RIVAL SUBMISSIONS AND ON PERUSAL OF MATERIALS AVAILABLE ON RECORD THE UNDISPUTED FACT IS THAT IN THIS CASE THE ASSESSEE IS AN INDIVIDUAL AND THIS TRIBUNAL HAS CONSISTENTLY TAKIN G A VIEW THAT THE PROVISION OF SECTION 194C(1) IS APPLICABLE TO THE INDIVIDUAL ASS ESSEE W.E.F 01.06.2007. SINCE THE ASSESSMENT YEAR INVOLVED IN THIS APPEAL IS 2006 -07 WE ARE OF THE VIEW THAT THE REVENUE IS NOT JUSTIFIED IN DISALLOWING EXPENDI TURE U/S 40A(IA) OF THE ACT BY STATING THAT THE ASSESSEE HAS NOT DEDUCTED TDS AS R EQUIRED U/S 194C OF THE ACT. THEREFORE, THE ACTION OF THE REVENUE AUTHORITIES IS NOT SUSTAINABLE AS PER LAW. WE SET ASIDE THE ORDER OF THE REVENUE AUTHORITIES A ND DIRECT THE AO NOT TO MAKE ANY DISALLOWANCE U/S 40(A)(IA) OF THE IT ACT. 6.2. THIS TRIBUNAL IN ITA NO.688/KOL/2010 IN THE CASE OF MOHAMMED DAWOOD VS ITO.WD.28(2), KOLKATA HAS FOLLOWED THE ABOVE DECISI ON OF THE TRIBUNAL AND ALLOWED THE APPEAL OF ASSESSEE. 3 6.3. RESPECTFULLY FOLLOWING THE SAME WE ALLOW T HE APPEAL OF ASSESSEE AND DIRECT THE AO NOT TO MAKE ANY DISALLOWANCE U/S 40(A)(IA) OF T HE IT ACT. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. 7 8 (97 ': ; <=> %6 ? @ A <= > %6 ? @ A <= > %6 ? @ A <= > %6 ? @ A <= > ORDER PRONOUNCED IN THE COURT ON 05.12.2011. SD/- SD/- ., ( ! .#$., %& ! N.VIJAYAKUMARAN, JUDICIAL MEMBER C.D.RAO, ACCOUNTA NT MEMBER DATED : 05.12.2011. RG(PS) %6 2 0(( B%*8- COPY OF THE ORDER FORWARDED TO: 1. SHRI RINKU MALLICK, VILLAGE:RAMKRISHNAPUR, POST-SUK DEVPUR, DIST.24-PARGANAS(SOUTH). 2 THE I.T.O., WARD-53 (1), KOLKATA 3. THE CIT, 4. THE CIT(A)-XXXIII, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA 1 0(/ TRUE COPY, %6/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES