ASST. COMMISSIONER OF INCOME TAX (TDS) - 2(1), MUMBAI V. PA INDIA FOOD SOLUTIONS PVT. LTD., MUMBAI

ITA 7304/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1941 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 21-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UDOL RAJ SINGH
• Assessee Lawyers: JAYESH L DADIA
• Keywords: Non-deduction of tax; TDS
• Section: 194C; 201(1); 201; 2

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C , MUMBAI , ! ,'# '$ BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI N.K.PRADHAN, ACCOUNTANT MEMBER . 7303 - 7309 / /201 8 (. . 2009-10 TO 2015-16 ) ITA NO.7303 TO7309/MUM/2018(A.Y. 2009-10 TO 2015-16 ) THE ACIT (TDS) -2(1), ROOM NO.615, TH FLOOR, AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 ...... , / APPELLANT VS. M/S. PAN INDIA FOOD SOLUTIONS PVT.LTD, 16 TH FLOOR, TOWER 2A ONE INDIA BULLS CENTRE, SENAPATI BAPAT MARG, ELPHINSTONE ROAD, MUMBAI 400 013. PAN:AADCP8747M ..... !-/ RESPONDENT ,./ APPELLANT BY : SHRI UDOL RAJ SINGH !-./ RESPONDENT BY : SHRI JAYESH L DADIA /- / DATE OF HEARING : 29/10/2020 012 /- / DATE OF PRONOUNCEMENT : 23/11/2020 '/ ORDER PER BENCH : THESE SEVEN APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-60, MUMBAI ( IN SHORT THE CIT(A)) FOR THE ASSESSMENT YEARS 2009-10 TO 2015-1 6 PASSED UNDER SECTION 2 ITA NO.7303 TO7309/MUM/2018(A.Y.2009-10 TO .201 5-16) 201(1A) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). ALL THE IMPUGNED ORDERS ARE OF EVEN DATE I.E. 30/10/2018. SINCE THE FACTS GERMANE TO ALL THE APPEALS AND GROUNDS OF APPEAL RAISED BY REVENUE IN ALL THE IMPUGNED ASSESSMENTS YEARS ARE IDENTICAL, THESE APPEALS ARE TAKEN UP TOGETHER AND ARE DECIDED VIDE THIS COMPOSITE ORDER. FOR THE SAKE O F CONVENIENCE THE FACTS ARE NARRATED FROM ITA NO.7303/MUM/2019. ITA NO.7303/MUM/2019 A.Y.2009-10: 2. SHRI JAYESH L DADIA, APPEARING ON BEHALF OF TH E ASSESSEE SUBMITTED THAT THE ASSESSEE IS RUNNING A RETAIL CHAIN OF RESTAURA NTS. THE ASSESSEE HAS BEEN MAKING PURCHASES FOR ITS RESTAURANT BUSINESS FROM V ARIOUS SUPPLIERS UNDER RATE CONTRACT AGREEMENT. THE ASSESSEE HAS BEEN MAKING PA YMENTS OF MATERIAL ON THE BASIS OF INVOICE RAISED BY SUPPLIERS. FOR THE IMPUGNED ASSESSMENT YEARS THE DY. COMMISSIONER OF INCOME TAX (TDS) [ IN SHORT THE DCIT(TDS)] ISSUED SHOW CAUSE NOTICE DATED 22/03/2016 UNDER SECTION 2 01(1)/201(1A) OF THE ACT TO TREAT THE ASSESSEE AS ASSESSEE IN DEFAULTIN CA SE THE ASSESSEE FAILES TO GIVE BREAK-UP OF TRANSPORT COST AND THE MATERIAL PURCHA SED. THE ASSESSEE IN REPLY TO SHOW CAUSE NOTICE EXPLAINED THAT THE ASSESSEE HA S ARRANGEMENT/UNDERSTANDING WITH SUPPLIERS OF MATERIA L TO DELIVER GOODS AT WORK PLACE OF ASSESSEE. THE COST OF MATERIAL INCLU DES COST OF TRANSPORTATION, THEREFORE, NO SEPARATE TRANSPORTATION COST IS PAID B Y THE ASSESSEE . THE DCIT (TDS) VIDE ORDER DATED 30/03/2016 PASSED UNDER SECT ION 201(1)/201(1A) OF THE ACT TREATED THE ENTIRE COST ON MATERIAL AS COST OF TRANSPORTATION AND COMPUTED TDS ON SAME AND HELD THE ASSESSEE AS A SSESSEE IN DEFAULT UNDER SECTION 201(1) OF THE ACT. THE DCIT(TDS) FURTHER C HARGED INTEREST UNDER SECTION 201(1A) OF THE ACT ON THE SAID AMOUNT. THE LD.AUTHORIZED 3 ITA NO.7303 TO7309/MUM/2018(A.Y.2009-10 TO .201 5-16) REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT IT W AS EXPLAINED TO DCIT THAT PAYMENTS WERE MADE TO SUPPLIERS AS PER INVOICE. TH E BREAK-UP OF MATERIAL SUPPLIED AND THE COST OF TRANSPORTATION IS NOT AVAI LABLE. THE COST OF MATERIALS IS INCLUSIVE OF TRANSPORTATION COST. HENCE, NO TDS W AS DEDUCTED IN RESPECT OF TRANSPORTATION COST. THE ASSESSEE CHALLENGED THE ORDER OF DCIT(TDS) BEFORE CIT(A). THE CIT(A) AFTER EXAMINING FACTS AND THE S UBMISSIONS OF ASSESSEE HELD THAT NO TDS WAS DEDUCTIBLE AS NO SEPARATE TRANSPOR TATION COST WAS CHARGED. 3. PER CONTRA, SHRI UDOL RAJ SINGH, REPRESENTING T HE DEPARTMENT VEHEMENTLY DEFENDED THE ORDER OF DCIT(TDS) IN HOLDI NG THE ASSESSEE AS ASSESSEE IN DEFAULT FOR NON-DEDUCTION OF TAX AT S OURCE ON THE PAYMENT OF TRANSPORTATION CHARGES TO THE SUPPLIERS OF THE MATE RIALS. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE DCIT(TDS) HAD GIV EN OPPORTUNITY TO THE ASSESSEE TO FURNISH BREAK-UP OF MATERIAL SUPPLIED A ND THE COST OF TRANSPORTATION. HOWEVER, THE ASSESSEE FAILED TO CO MPLY WITH THE DIRECTIONS OF DCIT(TDS). THE LD.DEPARTMENTAL REPRESENTATIVE FURT HER POINTED THAT THE DCIT(TDS) AFTER EXAMINING RATE CONTRACT AGREEMENT OBSERVED THAT THERE WAS SPECIFIC MENTION THAT THE NATURE OF CONTRACT BETWEE N THE ASSESSEE AND THE SUPPLIERS OF THE MATERIAL IS IN THE NATURE OF WORK S CONTRACT WHICH INCLUDES TRANSPORTATION CHARGES. THE TRANSPORTATION CHARGES ARE LIABLE FOR TDS UNDER SECTION 194C OF THE ACT, HENCE, THE ASSESSEE WAS D UTY BOUND TO DEDUCT TDS ON THE PAYMENT OF TRANSPORTATION CHARGES. THE LD.DEPA RTMENTAL REPRESENTATIVE VEHEMENTLY DEFENDED THE ORDER PASSED UNDER SECTION 201(1) AND 201(1A) OF THE ACT AND PRAYED FOR REVERSING THE FINDINGS OF TH E CIT(A) ON THIS ISSUE. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY RIVAL SIDE S AND HAVE EXAMINED THE ORDERS OF AUTHORITIES BELOW. THE REVENUE HAS A SSAILED THE ORDER OF CIT(A) 4 ITA NO.7303 TO7309/MUM/2018(A.Y.2009-10 TO .201 5-16) IN DELETING THE TDS LIABILITY ON COST OF TRANSPORTA TION RAISED UNDER SECTION 201(1) AND INTEREST THEREON UNDER SECTION 201(1A) O F THE ACT. THE ASSESSEE HAS BEEN HELD TO BE DEEMED ASSESSEE IN DEFAULT FOR NON-DEDUCTION OF TDS ON COST OF TRANSPORTATION. THE ASSESSEE IS RUNNING RE TAIL CHAIN OF RESTAURANTS. THE ASSESSEE IS RECEIVING MATERIAL FROM SUPPLIERS UNDE R RATE CONTRACT. THE INVOICE FOR SUPPLY OF MATERIAL DOES NOT GIVE SEPARATE BR EAK-UP OF COST OF TRANSPORTATION. THE CONTENTION OF THE ASSESSEE IS THAT THE COST OF MATERIALS SUPPLIED INCLUDES COST OF TRANSPORTATION. THE LD.A UTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS MADE STATEMENT AT BAR THAT NO SEP ARATE TRANSPORTATION COST FOR SUPPLY OF MATERIAL WAS MADE AND HENCE, NO TDS W AS DEDUCTED FOR THE SAME. 5. IT IS AN UNDISPUTED FACT THAT THE INVOICES ISSUE D BY SUPPLIERS OF MATERIAL DOES NOT SEPARATELY MENTION COST ON TRANSPORTATI ON OF MATERIAL. SINCE THE ASSESSEE IS NOT MAKING ANY PAYMENTS FOR THE TRANSPO RTATION OF MATERIAL SEPARATELY, THERE IS NO QUESTION OF DEDUCTING TAX A T SOURCE ON SUCH PAYMENTS. IN ANY CASE THE ENTIRE COST ON MATERIAL CANNOT BE CONSIDERED AS COST OF TRANSPORTATION. THE DCIT(TDS) HAS ERRED IN TREAT ING THE ENTIRE COST OF MATERIAL SUPPLIED AS COST OF TRANSPORTATION FOR THE PURPOSE OF SECTION 201(1) AND 201(1A) OF THE ACT. WE SEE NO ERROR IN THE FI NDINGS OF CIT(A) IN DELETING THE TDS LIABILITY FASTENED BY THE DCIT(TDS) BY HO LDING THE ASSESSEE AS ASSESSEE IN DEFAULT FOR ALLEGED VIOLATION OF SECT ION 194C FOR NON-DEDUCTION OF TAX AT SOURCE ON COST OF TRANSPORTATION. THE FIND INGS OF CIT(A) ON THE ISSUE ARE UPHELD AND THE APPEAL OF REVENUE IS DISMISSED SANS-MERIT. 6. IN THE RESULT, THE IMPUGNED ORDER IS UPHELD AND THE APPEAL OF REVENUE IS DISMISSED. 5 ITA NO.7303 TO7309/MUM/2018(A.Y.2009-10 TO .201 5-16) ITA NOS.7304 TO 7309/MUM/2019 A.YS 2010-11 TO 201 5-16: 7. THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSE E SUBMITTED THAT THE FACTS IN ALL THE APPEALS ARE IDENTICAL AND THE GROU NDS RAISED BY THE REVENUE ARE ALSO IDENTICAL, THEREFORE, THE SUBMISSIONS MADE IN ITA NO.7303/MUM/2019 WOULD HOLD GOOD FOR OTHER APPEALS AS WELL. 8. THE LD.DEPARTMENTAL REPRESENTATIVE ADMITTED TH AT THE FACTS AND GROUNDS OF APPEAL IN ALL THESE APPEALS ARE IDENTIC AL. 9. THE FACTS IN ALL THE APPEALS ARE PARI-MATERIA, THIS HAS BEEN ENDORSED BY RIVAL SIDES. HENCE, THE FINDINGS GIVEN BY US WHILE ADJUDICATING ITA NO.7303/MUM/2019(SUPRA) WOULD MUTATIS MUTANDIS APPLY TO THE AFOREMENTIONED APPEALS BY THE REVENUE, AS WELL. F OR THE REASONS STATED ABOVE THE APPEALS OF REVENUE IN ITA NOS. 7304 TO 7309/MUM/2019 FOR ASSESSMENT YEARS 2010-11 TO 2015-16 ARE DISMISSED SANS MERIT. 9. IN THE RESULT, ALL SEVEN APPEALS BY THE REVENU E ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON MONDAY THE 23RD DAY OF NOVEMBER, 2020. SD/- SD/- (N.K.PRADHAN) (VIKAS AWASTHY) '# / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, 4/ DATED 23/11/2020 VM , SR. PS (O/S) 6 ITA NO.7303 TO7309/MUM/2018(A.Y.2009-10 TO .201 5-16) COPY OF THE ORDER FORWARDED TO : 1. , / THE APPELLANT , 2. !- / THE RESPONDENT. 3. 5- ( )/ THE CIT(A)- 4. 5- CIT 5. 67!- , . . . , / DR, ITAT, MUMBAI 6. 789:; / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI