DCIT, CC-XXVII, Kolkata, Kolkata V. M/s Pandey Freight Carriers Pvt. Ltd., Howrah

ITA 795/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1530 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-06-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 30-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALLONG YADEN CITSR
• Assessee Lawyers: SUBASH AGARWAL ADVOCAT
• Section: 143(3); 194C

Judgement Text

1 ITA NO. 795/KOL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA BEFORE: SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JU DICIAL MEMBER I.T.A NO. 795/KO L/2014 A.Y: 2007- 08 D.C.I.T., C.C. XXVII, KOLKATA VS. M/S. PANDEY FREIG HT CARRIERS PVT. LTD. PAN: AADCP3283G [APPELLANT] [RESPONDENT] FOR THE APPELLANT/DEPARTMENT : SHRI SALLONG YADEN, ADDL. CIT(SR.DR) FOR THE RESPONDENT/ASSESSEE : SHRI SUBASH AGARWAL , ADVOCATE, LD.AR DATE OF HEARING : 26-07-2017 DATE OF PRONOUNCEMENT : 13-09-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DT. 27-02-2014 OF THE CIT-A, CENTRAL-II, KOLKATA FOR THE A.Y 2007- 08. 2. IN THIS APPEAL, THOUGH THE ASSESSEE HAS RAISED F OUR GROUNDS OF APPEAL, AMONGST WHICH THE ONLY EFFECTIVE ISSUE IS T O BE DECIDED AS TO WHETHER THE CIT-A JUSTIFIED IN DELETING THE IMPUGNE D ADDITION MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 40( A)(IA) OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY AND ENGAGED IN THE TRANSPORT BUSINESS. THE ASSESSEE FI LED ITS RETURN OF INCOME FOR THE A.Y UNDER CONSIDERATION DECLARING TO TAL INCOME OF RS.8,89,936/-. THE AO DETERMINED THE TOTAL INCOME A T RS.9,52,340/- BY AN ORDER DT. 31-12-2009 PASSED U/S. 143(3) OF TH E ACT. THEREAFTER, THE AO RE-OPENED THE ASSESSMENT AND DURING SUCH PRO CEEDINGS THE AO FOUND THAT THE ASSESSEE DEBITED AN AMOUNT OF RS. 4,82,89,790.85 TO ITS P & L ACCOUNT ON ACCOUNT OF LORRY FREIGHT. O N AN OBJECTION RAISED 2 ITA NO. 795/KOL/2014 BY THE AO FOR NOT DEDUCTING THE TDS, THE ASSESSEE C LAIMED TO HAVE BEEN SUBMITTED FORM 15-I DURING THE ORIGINAL ASSESS MENT PROCEEDINGS BEFORE HIM. BUT ON SUCH FAILURE THE AS SESSEE AGAIN SUBMITTING THE SAME IN THE RE-OPENING PROCEEDINGS U /S. 147, THE AO DISALLOWED THE CLAIM OF FREIGHT CHARGES OF RS.4,82, 89,791/- BY HIS ORDER DT. 01-03-2013 PASSED U/S.147/143(3) OF THE A CT DETERMINING THE ASSESSED INCOME OF RS.4,92,42,131/-. 4. IN CHALLENGE BEFORE THE CIT-A, THE ASSESSEE CONT ENDED THAT THE ASSESSEE HIRED LORRY THROUGH AGENTS AND ASSESSEE NO TED THE NAME OF SUCH AGENTS IN THE DETAILS OF FREIGHT PAYABLE. THE OWNER LORRIES ARE INDIVIDUALS AND FORM 15 I WHICH WERE OBTAINED FROM THEM ALSO SUBMITTED BEFORE THE CIT-A. THE CIT-A FORWARDED THE SAME ALONG WITH FORM 15-I TO THE AO FOR HIS COMMENTS. THE CIT- A FOUND THAT THE AO DID NOT MAKE ANY ADVERSE REMARKS IN HIS REMAND R EPORT. AFTER CONSIDERING THE SAME AND BY PLACING HIS RELIANCE ON THE ORDERS OF ITAT KOLKATA IN THE CASE OF M/S. S.S IMPEX, M/S.CAP ITAL TRANSPORT CORPORATION OF INDIA AND THE HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF M/S. STUMM INDIA CIT-A DELETED THE SAID ADD ITION BY OBSERVING AS UNDER:- SIMILAR VIEW AS TAKEN BY THE IAT, KOLKATA IN THE CASE OF M/S. S.S IMPEX AND M/S. CAPITAL TRANSPORT CORPORATION OF INDIA(SUPRA). IN THE CASE CIT, KOLKATA-XVI VS. M/S. STUMM INDIA, ITA NO. NO. 127 OF 2009 DATED 16.08.20 10 THE AO HAD MADE DISALLOWANCE OF RS. 41,33,710/- BEING THE PAYMENT MADE TO TRANSP ORTERS. THE ADDITION SO MADE BY THE AO WAS DELETED BY THE CIT(A) AND THE ITAT. THE REVE NUE FILED AN APPEAL BEFORE THE HONBLE CALCUTTA HIGH COURT. THE HIGH COURT DISMISS ED THE APPEAL FILED BY THE DEPARTMENT BY HOLDING THAT THE LEARNED TRIBUNAL HAS RECORDED T HE FACT THAT THE DEPARTMENT HAS NOT BEEN ABLE TO BRING ANY MATERIAL ON RECORD TO SHOW T HAT THE ASSESSEE HAS MADE THE PAYMENT TO THE TRANSPORTERS IN PURSUANCE OF CONTRAC T FOR CARRIAGE OF GOODS OF THE ASSESSEE AND THE QUESTION OF DEDUCTION AT SOURCE UNDER SECTI ON 194C DOES NOT ARISE. IN THE ABSENCE OF EVIDENCE OF PAYMENT MADE BY THE ASSESSEE TO THE TRANSPORTERS, THE ASSESSEE CANNOT BE SADDLED WITH THE LIABILITY OF DEDUCTING TAX AT SOUR CE. IN THE CASE OF APPELLANT COMPANY, IT DID NOT DEDUC T THE TAX ON PAYMENT OF LORRY FREIGHT FOR THE REASON THAT THE LORRY OWNERS FILED 15I FOR NON DEDUCTION OF TAX. IN THE REMAND REPORT THE AO HAS NOT DRAWN ANY ADVERSE INFE RENCE ABOUT THE FORM 15I SUBMITTED BY THE APPELLANT. THE APPELLANT HAS ALSO FAILED TO BRING ANY MATERIAL ON RECORD TO PROVE THAT THE AGENTS WHOSE NAMES WERE APPEARING IN THE D ETAILS OF FREIGHT PAYABLE WERE THE ACTUAL LORRY OWNERS AND NOT THE PERSONS WHO FILED T HE FORM 15I. THERE IS NO DISPUTE THAT THE FORM 15I IN FORM 15J WERE NOT FILED, IN TIME TO THE CONCERNED CIT BY THE APPELLANT BUT FOR THIS TECHNICAL FAULT THE PROVISIONS OF SECTION 40(A)(IA) ARE NOT APPLICABLE. THE FACT IS THAT THE APPELLANT DID NOT DEDUCT THE TAX ON THE ST RENGTH OF FORM 15I FILED BY THE LORRY OWNERS. FURTHER, IN THE IMMEDIATELY PRECEDING YEAR I.E A.Y 2006-07 THERE WAS EXACTLY SIMILAR FACTS AS IN THE YEAR UNDER APPEAL. IN THE P RECEDING YEAR, UNDER THE SIMILAR FACTS, THE AO ACCEPTED THE CONTENTION OF THE ASSESSEE COMP ANY AND NO ADVERSE REFERENCE WAS DRAWN FOR MAKING DISALLOWANCE U/S. 40(A)(IA) OF THE ACT. AGAIN, THERE IS ALSO NO EVIDENCE ON RECORD THAT THERE WAS ANY CONTRACT BETWEEN THE A PPELLANT COMPANY AND THE LORRY OWNERS OR THE AGENTS. IN VIEW OF ABOVE FACTS AND RE SPECTFULLY FOLLOWING THE RATIO LAID DOWN 3 ITA NO. 795/KOL/2014 IN THE JUDICIAL DECISIONS AS DISCUSSED ABOVE, IT IS HELD THAT THE AO WAS NOT JUSTIFIED IN MAKING THE DISALLOWANCE OF FREIGHT CHARGES BY INVOK ING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. HE IS DIRECTED TO DELETE THE DISALLOWA NCE MADE BY HIM. THE GROUND NO.2 IS ALLOWED. 5. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BEFORE US THE LD.DR SUBMITTED THAT THE ASSESSEE DID NOT PRODUCE FORM 15I BEFORE THE AO EITHER IN ORIGINAL ASSESSMEN T PROCEEDING OR IN REOPENING PROCEEDING U/S.147 OF THE ACT. THE CIT-A WITHOUT CONSIDERING THE FACTS OF THE CASE HELD THAT SUBMISS ION OF FORM 15 I IS A TECHNICAL DEFAULT, ON WHICH THE ADDITION MADE U /S. 40(A)(IA) OF THE ACT IS NOT MAINTAINABLE. THE LD. AR SUBMITTED THAT ALL THE TRUCK OWNERS ARE INDIVIDUALS AND THE ASSESSEE SUBMITTED T HE FORM 15I BEFORE AO IN THE ORIGINAL PROCEEDINGS U/SEC. 143(3) AS WELL AS BEFORE THE CIT-A. THE CIT-A FOUND THAT THE AO DID NOT MAKE ANY ADVERSE REMARKS IN HIS REMAND REPORT REGARDING THE SAME. CO NSIDERING THE SUBMISSIONS OF ASSESSEE ALONG WITH FORM 15I AS SUBM ITTED BEFORE HIM DELETED THE SAID ADDITION BY PLACING HIS RELIANCE P LACING HIS RELIANCE ON THE ORDERS/DECISIONS OF ITAT KOLKATA IN THE CASE OF M/S. S.S IMPEX, M/S.CAPITAL TRANSPORT CORPORATION OF INDIA A ND THE HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF M/S. STUMM IN DIA. WE FIND THAT IN THE REMAND REPORT THE AO DID NOT MAKE ANY ADVERS E REMARKS IN THE IMMEDIATELY PRECEDING YEAR I.E A.Y 2006-07. TH E AO ALLOWED THE CLAIM OF THE ASSESSEE ON SIMILAR FACTS. WE FIND THA T THE CASE LAWS AS RELIED ON BY THE CIT-A ARE RELEVANT TO THE FACTS AN D CIRCUMSTANCES OF THE CASE IN DELETING THE IMPUGNED ADDITION. THEREFO RE, THE ORDER OF THE CIT-A ON THIS ISSUE IS JUSTIFIED. ACCORDINGLY, WE UPHOLD THE SAME. THEREFORE, THE GROUND(S) RAISED BY THE REVENUE ARE DISMISSED. 6. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 13-09 -2017 SD/- SD/- P.M. JAGTAP S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13-09-2017 4 ITA NO. 795/KOL/2014 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/REVENUE: THE DCIT, C.C-XXVII, KOLKATA AAYKAR BHAWAN POORVA, 5 TH FL., ROOM NO. 510, 110 SHANTIPALLY, KOL. 2 RESPONDENT/ASSESSEE:M/S.PANDEY FREIGHT CARRIERS PVT . LTD 13 P.T.R SLIDING, SHIBPUR, SHALIMAR, HOWRAH 711102. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES , KOLKATA / TRUE COPY, BY ORDER, SR.PS/H.O.O ITAT KOLKATA