ACIT, UDAIPUR V. Shri Laxmi Narayan Tak Prop, UDAIPUR

ITA 78/JODH/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1587 (ITAT-JODHPUR)
• Duration Of Justice: 2 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-01-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 08-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Section: 40A(3); 143(3); 194C; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 78/JU/2010 ASSESSMENT YEAR : 2006-07 THE ACIT, VS. SHRI LAXMI NARAYAN TAK, CIRCLE-2, UDAIPUR PROP CHETAK TRAVELLING, UDAIPUR PAN NO.AANPT4140R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.R. KOKANI RESPONDENT BY : SHRI AMIT KOTHARI DATE OF HEARING : 15.01.2013 DATE OF PRONOUNCEMENT : 07.02.2013 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2006 -07 IS DIRECTED AGAINST THE ORDER OF CIT(A) DATED 13.11.2009. 2. FOLLOWING TWO GROUNDS HAVE BEEN RAISED IN THIS A PPEAL:- ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT(A) HAS ERRED IN 2 1. DELETING THE DISALLOWANCE OF RS. 43,24,081/- MAD E U/S 40(A)(IA) AND NON DEDUCTION OF TDS. 2. DELETING THE DISALLOWANCE OF RS. 2,76,682/- MADE U/S 40A(3) OF THE INCOME TAX ACT, 1961. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY AN D PERUSED THE ENTIRE RECORD AVAILABLE BEFORE US. WE HAVE ALSO GONE THRO UGH THE PAPER BOOK FILED BY THE PARTIES. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS ENGAGED IN THE BUSINESS OF HIRING OF BUSES. THE ASSESSING OFF ICER REQUIRED THE ASSESSEE TO FURNISH DETAILS OF HIRE CHARGES PAID TO VARIOUS PERSONS. THE ASSESSEE COMPLIED WITH AND FILED ENTIRE RECORDS. TH E ASSESSEE HAD PAID RS. 43,24,081/- TOWARDS TOTAL HIRE CHARGES. FROM THE D ETAILS SO FILED, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD FAI LED TO DEDUCT TAX AT SOURCE, THEREFORE, THE ASSESSING OFFICER SHOW CAUSE D THE ASSESSEE AS TO WHY A SUM OF RS. 43,24,081/- SHOULD NOT BE DISALLOWED U NDER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE ASSESSEE OBJECTE D TO THIS PROPOSED ACTION OF THE ASSESSING OFFICER AND STATED THAT TDS PROVIS IONS ARE NOT AT ALL APPLICABLE IN THE CASE OF THE ASSESSEE. THE ASSESS ING OFFICER WAS NOT AGREEABLE. HE FOUND THAT THE MAIN BUSINESS OF THE ASSESSEE WAS BUSES ON HIRE BASIS. HE ALSO FOUND THAT THE ASSESSEE WAS G IVING BUSES ON HIRE TO VARIOUS PARTIES INCLUDING M/S HINDUSTAN ZINC LTD., NUCLEAR POWER CORPORATION INDIA, R.S.M.M. LTD. AND AIRPORT AUTHOR ITY OF INDIA. 3 ACCORDING TO ASSESSING OFFICER, THESE PARTIES WOULD MAKE PAYMENTS ONLY AFTER DEDUCTING THE TAX. IN THE SAME ANALOGY, THE A SSESSING OFFICER WANTED THE ASSESSEE TO DEDUCT TAX ON PAYMENTS MADE TO BUS OWNERS FROM WHOM BUSES WERE HIRED. THE ASSESSEE EXPLAINED THAT THERE IS A BASIC DIFFERENCE BETWEEN THE CONTRACTS EXECUTED BY THE ASSESSEE BECA USE THE BUSES TAKEN ON RENT WHEREAS FROM THE PARTIES MENTIONED ABOVE, THE ASSESSEE HAS BEEN RECEIVING HIRE CHARGES ON THE BASIS OF PER KILOMETR E. THE ASSESSEE ALSO SUBSTANTIATED HIS CLAIM WITH THE HELP OF COPY OF CO NTRACT. ACCORDING TO ASSESSEE, HIRE CHARGES INCLUDED ALL THE EXPENSES RE LATING TO EXECUTION OF CONTRACT I.E. DIESEL EXPENSES AND SALARY EXPENSES A ND ALL OTHER SIMILAR TYPE OF EXPENSES. THE ASSESSEE FURTHER EXPLAINED THAT T HE BUSES TAKEN ON RENT HAVE TO PAY A FIX MONTHLY RENT, NO MATTER IF THE BU SES ARE USED OR NOT. IT WAS FURTHER EXPLAINED THAT THE ASSESSEE DID NOT EXECUTE ANY TRANSPORT CONTRACT WITH THE BUS OWNERS. IN SUPPORT, AFFIDAVITS OF THE BUS OWNERS ENCLOSED VIDE LETTER DATED 5.12.2008 WERE PRODUCED. THE RECIPIEN TS CLEARLY STATED THAT THEY HAVE RECEIVED ONLY RENT FROM THE ASSESSEE. TH EREFORE, IT WAS EXPLAINED THAT RENT OF LETTING OUT OF BUSES IS NOT SUBJECT TO TDS U/S 194-I OF THE ACT. SINCE THE LETTING OUT OF MACHINERY, PLANT AND EQUIP MENTS IS NOT COVERED U/S 194-I OF THE ACT FOR TDS PROVISIONS, THE ASSESSEE H AS NOT DEDUCTED ANY TDS OUT OF PAYMENTS MADE TOWARDS RENT OF BUSES. IT WAS FURTHER EXPLAINED THAT IN SIMILAR FACTS IN ASSESSMENT YEAR 2005-06, EVEN W HEN THE ASSESSMENT WAS MADE U/S 143(3) OF THE ACT, THE ASSESSING OFFICER H AS ACCEPTED SIMILAR ARGUMENTS AS CORRECT. BUT STILL THE ASSESSING OFFI CER WAS NOT SATISFIED AND AFTER REJECTING THE ABOVE SUBMISSIONS HAS CONCLUDED THAT THERE IS NO DIFFERENCE WHETHER THE ASSESSEE PROVIDE BUSES TO OT HER PERSONS OR TAKE BUSES 4 FORM THIRD PERSONS ON CONTACT AND, THEREFORE, WAS H ELD LIABLE TO DEDUCT TDS. HE INSTEAD FOUND THAT THE PAYMENTS MADE BY THE ASSE SSEE ARE COVERED U/S 194C OF THE ACT AND ACCORDINGLY MADE THE IMPUGNED D ISALLOWANCE. 5. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A) WHO AFTER CONSIDERING THE SIMILAR ARGUMENTS HAS REV ERSED THE FINDINGS OF THE ASSESSING OFFICER. HE HAS OBSERVED THAT THE ASSESS ING OFFICER HAS WRONGLY TREATED THE ASSESSEE AS CONTRACTOR IN RESPECT OF BU SES TAKEN ON HIRE BY THE ASSESSEE, HENCE, HE DELETED THE ENTIRE DISALLOWANCE . THE REVENUE IS AGGRIEVED AND HAS RAISED GROUND NO.1 IN THIS REGARD . 6. AFTER HEARING BOTH THE SIDES IN THE LIGHT OF THE OBTAINING FACTS OF THE CASE, WE HAVE FOUND THAT THE LEARNED CIT(A) HAS TAK EN A CORRECT DECISION. THE ASSESSING OFFICER HAS NOT BROUGHT ANYTHING ON R ECORD SUGGESTING ANY CONTRACT BETWEEN THE ASSESSEE AND THE OWNERS OF THE BUSES. ALL THE OWNERS OF THE BUSES FROM WHOM THE ASSESSEE HAS HIRED THEM ON MONTHLY RENT HAVE CONFIRMED THE VERSION OF THE ASSESSEE THROUGH CONFI RMATIONS / AFFIDAVITS. THEY HAVE CONFIRMED THAT THEIR BUSES HAVE BEEN GIVE N ON MONTHLY RENT TO THE ASSESSEE. THE ASSESSING OFFICER HAS NOT EXAMIN ED ANY OF THEM AND NONE OF THEM HAVE EVER STATED THAT THE ASSESSEE IS A CON TRACTOR AND THEY HAVE GIVEN THEIR BUSES TO HIM. THE FACT THAT IN THE IMM EDIATELY PRECEDING ASSESSMENT YEAR, ON IDENTICAL FACTS, THE ASSESSING OFFICER HAS ACCEPTED THE CLAIM OF THE ASSESSEE THAT THE BUSES WERE TAKEN BY HIM ON MONTHLY RENT, ARE NOT TAKEN UNDER A CONTRACT. THE ASSESSING OFFICER IN ASSESSMENT YEAR 2005- 06 WHILE MAKING ASSESSMENT U/S 143(3) HAS ACCEPTED THAT SECTION 194C IS 5 NOT APPLICABLE IN THE CASE OF THE ASSESSEE IN RESPE CT OF HIRE CHARGES PAID TO THE OWNERS OF THE BUSES. THE FACTS IN THIS YEAR HA VE NOT CHANGED AND IT IS AN ADMITTED FACT, THEREFORE, THE FINDINGS OF THE LE ARNED CIT(A) CANNOT BE FALTERED AND, THEREFORE, NO INTERFERENCE BY US IS W ARRANTED. ACCORDINGLY, THIS GROUND OF THE REVENUES APPEAL CANNOT BE ALLOW ED AND HENCE STANDS DISMISSED. 7. THE SECOND GROUND RELATES TO DISALLOWANCE OF RS. 2,76,682/- U/S 40A(3) OF THE ACT. IT WAS FOUND BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD MADE CASH PAYMENTS OF RS. 5,68,918/- TO M/S MOD ERN FILLING STATION; RS. 7,14,574/- TO M/S CHITTOR FILLING STATION AND O F RS. 73,357/- TO M/S KASIWAL BROTHERS, BIJAI NAGAR TOTALLING TO RS. 13,5 6,849/-. THIS ACT OF THE ASSESSEE WAS TREATED AS A CONTRAVENTION TO PROVISIO NS OF SECTION 40A(3) OF THE ACT AND, THEREFORE, AFTER DISALLOWING 20% OF TH E SAME, THE ASSESSING OFFICER HAS ADDED A SUM OF RS. 5,68,918/- IN THE TO TAL INCOME OF THE ASSESSEE. 8. THE LEARNED CIT(A) HAS CONSIDERED EACH CASE SEPA RATELY IN DETAIL AND HAS FOUND THAT ALL PAYMENTS IN CASH ARE LESS THAN R S. 20,000/- AT A TIME AND, THEREFORE, NO DEMAND ATTRACTS PROVISIONS OF SECTION 40A(3) OF THE ACT AND ACCORDINGLY HE HAS DELETED THE IMPUGNED ADDITION. NOW, BOTH THE PARTIES HAVE TAKEN SIMILAR STAND BEFORE US ALSO. 9. AFTER CONSIDERING ALL THE FACTS AND FIGURES AVAI LABLE ON RECORD, WE ARE CONVINCED THAT NONE OF THE SINGLE PAYMENT IS MADE I N CONTRAVENTION OF 6 SECTION 40A(3) OF THE ACT BECAUSE ALL SUCH PAYMENTS ARE LESS THAN RS. 20,000/-. ACCORDINGLY, THE SECOND GROUND IS ALSO D ISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 07.02.2013 ) SD/- SD/- (N.K.SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMER DATED : 7 TH FEBRUARY, 2013 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR