Kanai Lal Sharma, Asansol V. ACIT, Circle - 2, Asansol, Asansol

ITA 816/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48050 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 11-04-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 26-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A KUMAR
• Assessee Lawyers: S K TULSIYANR N RAM
• Keywords: Business income
• Section: 143(3); 194C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND , . ! . '# ) [BEFORE HONBLE SRI MAHAVIR SINGH, JM & HONBLE SHR I C. D. RAO, AM] $ $ $ $ / I.T.A NO. 816/KOL/2010 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEAR: 2007-08 KANAI LAL SHARMA VS ASSISTANT COMMISSIONER OF I NCOME-TAX, (PAN-ALWPS 5857 L) CIRCLE-2, ASANSOL ( *+ /APPELLANT ) (,-*+/ RESPONDENT ) FOR THE APPELLANT: S/SHRI S. K. TULSIYAN/R.N. RAM FOR THE RESPONDENT: SHRI A. KUMAR '. / ORDER PER MAHAVIR SINGH, JM ( , , , , ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDER OF CIT(A)-, ASANSOL IN APPEAL NO.119/CIT(A)/ASL/CIR-2/ASL/2009-10 DATED 23.03.201 0. THE ASSESSMENT WAS FRAMED BY ACIT, CIRCLE-2. ASANSOL U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2007- 08 VIDE HIS ORDER DATED 31.12.2009. 2. THE FIRST LEGAL ISSUE RAISED BY ASSESSEE BY WAY OF ADDITIONAL GROUND IS THAT THE ASSESSEE BEING AN INDIVIDUAL IS NOT LIABLE TO DEDUC T TAX U/S. 194C(1) OF THE ACT AND ACCORDINGLY DISALLOWANCE U/S. 40(A)(IA) OF THE ACT IS UNCALLED FOR. FOR THIS, ASSESSEE HAS RAISED FOLLOWING ADDITIONAL GROUND: I. THAT THE LD. A.O. AND CIT(A) WRONGLY APPLIED TH E PROVISION OF SECTION 40(A)(IA) OF THE I. T. ACT, 1961 TO THE APPELLANT A LTHOUGH HE BEING AN INDIVIDUAL WAS NOT COVERED BY THE PROVISION OF SECTION 194C PR IOR TO 01.06.2007 RELEVANT TO A.Y. 2008-09. 3. AT THE OUTSET, THE ASSESSEE CONTENDED THAT DISAL LOWANCE UNDER SECTION 40(A)(IA) OF THE ACT WHICH HAS BEEN MADE ON THE PREMISE THAT THE ASSESSEE WAS LIABLE TO DEDUCTION OF TAX AT SOURCE IN RESPECT OF THE TRANSPORT CHARGES P AID TO THE TRANSPORT OPERATORS AGAINST THE TRANSPORT OF PETROLEUM PRODUCT FROM THE SITE OF BHARAT PETROLEUM TO THE PETROL PUMP. THE PROVISION OF SECTION 194C(1) OF THE ACT, AS IT STOOD PRIOR TO ITS AMENDMENT W.E.F. 01.06.2007, DO NOT APPLY IN THE CASE OF AN INDIVIDU AL AND THEREFORE, THERE BEING NO LIABILITY FOR DEDUCTION OF TAX AT SOURCE BY THE ASS ESSEE DURING THE RELEVANT ASSESSMENT 2 ITA 816/K/201 0 KANAI LAL SHARMA. A.Y. 07-08 YEAR, BOTH THE A.O. AND CIT(A) HAS WRONGLY ASSUMED FAILURE ON THE PART OF THE ASSESSEE TO DEDUCT TAX AT SOURCE ON THE PAYMENT TO THE CONTR ACTOR. AN ADDITIONAL GROUND HAS BEEN RAISED WHICH BEING LEGAL IN NATURE REQUIRING NO INVESTIGATION OF FRESH FACT SHOULD BE ADMITTED IN THE LIGHT OF THE HONBLE SUPREME CO URT JUDGMENT IN THE CASE OF NATIONAL THERMAL CO. LTD. VS. CIT REPORTED IN 229 ITR 383 ( SC). 4. ON THE OTHER HAND, THE LD. SR. DR HAS NOT OBJECT ED TO THE ADMISSION OF ADDITIONAL GROUND RAISED BY ASSESSEE, AS SAME IS EMANATING FR OM RECORDS. 5. AFTER HEARING RIVAL SUBMISSIONS AND GOING THROUG H FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT ASSESSEE BEING AN INDIVIDUAL FIL ED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 ON 20.03.2008. THE ASSESSING OFFICER COMPLETED ASSESSMENT U/S. 143(3) OF THE ACT, THEREBY MAKING DISALLOWANCE OF TRANSPOR TATION CHARGES OF RS.17,66,309/- BY INVOKING PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AS THE ASSESSEE FAILED TO DEDUCT TAX IN TERMS OF SECTION 194C(1) OF THE ACT. ADMITTEDLY, TH E ASSESSEE IS AN INDIVIDUAL AND FALLS U/S. 194C(1) OF THE ACT AND THE SAME IS NOT DISPUTE D BY THE REVENUE. THE ASSESSEE HAS PAID TRANSPORTATION CHARGES AND FILED DETAILS OF TR ANSPORTATION CHARGES ALONG WITH FULL NAMES AND ADDRESSES OF THE PARTIES. ASSESSING OFFI CER WAS OF THE VIEW THAT TAX WAS DEDUCTIBLE AT SOURCE UNDER THE PROVISION OF SECTION 194C(1) OF THE ACT FROM THE TRANSPORT PAYMENT. BUT NOW, WE FIND THAT THIS ISSU E HAS BEEN SETTLED BY THIS BENCH OF TRIBUNAL, KOLKATA IN THE CASE ACIT VS SMT. KEYA SET H IN ITA NO.842 & 843/K/2010 FOR ASSESSMENT YEARS 2006-07 & 2007-08 VIDE ORDER D ATED 11.03.2011, WHEREIN EXACTLY THE SAME ISSUE HAS BEEN DECIDED AS UNDER: 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. IT IS AN ADMITTED POSITION THAT THE ASSESSEE AN INDIVIDUAL CARRYING ON THE BUSINESS OF AYURVEDIC (COSMETIC DIVISION) AND THE CONSULTANCY O N BEAUTICIAN AND ALSO RELATED THERAPIES . AS CLAIMED BY THE ASSESSEE, WHETHER THE PROVISIONS OF SECTION 194(1) AS EXISTED IN ASSESSMENT YEARS 2006-07 & 2007-08 WILL APPLY TO THE ASSESSEE OR NOT? ADMITTEDLY, ASSESSEE HAS NOT DEDUCTED ANY TDS ON ADVERTISEMENT PAYMENT AND ACCORDING TO HER, PROVISIONS OF SECTION 194C(1) AS EXISTED IN THE REL EVANT ASSESSMENT YEARS WILL NOT OBLITERATE ANY DUTY ON ASSESSEE TO DEDUCT TDS. NOW, WE HAVE TO EXAMINE THIS. THE RELEVANT PROVISIONS OF SECTION 194C(1) & (2) AS EXI ST IN ASSESSMENT YEAR 2006-07 & 2007- 08 READS AS UNDER :- (1) ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO A NY RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE CONTRACTOR) FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WO RK) IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND-- 3 ITA 816/K/201 0 KANAI LAL SHARMA. A.Y. 07-08 (A) THE CENTRAL GOVERNMENT OR ANY STATE GOVERNMENT ; OR (B) ANY LOCAL AUTHORITY ; OR (C) ANY CORPORATION ESTABLISHED BY OR UNDER A CENTR AL, STATE OR PROVINCIAL ACT ; OR (D) ANY COMPANY, OR (E) ANY CO-OPERATIVE SOCIETY ; OR (F) ANY AUTHORITY, CONSTITUTED IN INDIA BY OR UNDER ANY LAW, ENGAGED EITHER FOR THE PURPOSE OF DEALING WITH AND SATISFYING THE NEED FOR HOUSING ACCOMMODATION OR FOR THE PURPO SE OF PLANNING, DEVELOPMENT OR IMPROVEMENT OF CITIES, TOW NS AND VILLAGES, OR FOR BOTH ; OR (G) ANY SOCIETY REGISTERED UNDER THE SOCIETIES REGI STRATION ACT, 1860 (21 OF 1860), OR UNDER ANY LAW CORRESPONDING T O THAT ACT IN FORCE IN ANY PART OF INDIA ; OR (H) ANY TRUST ; OR (I) ANY UNIVERSITY ESTABLISHED OR INCORPORATED BY O R UNDER A CENTRAL, STATE OR PROVINCIAL ACT AND AN INSTITUTION DECLARED TO BE A UNIVERSITY UNDER SECTION 3 OF THE UNIVERSITY G RANTS COMMISSION ACT, 1956 (3 OF 1956), OR (J) ANY FIRM, SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACC OUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO-- (I) ONE PER CENT. IN CASE OF ADVERTISING, (II) IN ANY OTHER CASE TWO PER CENT. OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THERE IN. (2) ANY PERSON (BEING A CONTRACTOR AND NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY) RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE SUB-C ONTRACTOR) IN PURSUANCE OF A CONTRACT WITH THE SUB-CONTRACTOR FOR CARRYING OUT , OR FOR THE SUPPLY OF LABOUR FOR CARRYING OUT, THE WHOLE OR ANY PART OF T HE WORK UNDERTAKEN BY THE CONTRACTOR OR FOR SUPPLYING WHETHER WHOLLY OR P ARTLY ANY LABOUR WHICH THE CONTRACTOR HAS UNDERTAKEN TO SUPPLY SHALL, AT T HE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE SUB-CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO ONE PER CENT OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THEREIN. 4 ITA 816/K/201 0 KANAI LAL SHARMA. A.Y. 07-08 XXXX XXXX XXXX 6. FROM THE ABOVE PROVISIONS OF SECTION 194C(1), IT IS CLEAR THAT THE PAYMENTS MADE BY INDIVIDUAL OR HINDU UNDIVIDED FAMILY DOES NOT COME WITHIN THE AMBIT OF TDS I.E. THE EXPENDITURE INCURRED FOR ADVERTISEMENT AS INDIVIDUA L AND HUF ARE SPECIFICALLY EXCLUDED IN THE ABOVE PROVISIONS. THE PROVISION OF SUB-SECTI ON (2) APPLIES ONLY TO PAYMENTS MADE TO SUB-CONTRACTORS AND NOT TO CONTRACTORS. ACCORDIN GLY, ASSESSING OFFICER CAN NOT MADE DISALLOWANCE BY INVOKING PROVISIONS OF SECTION 40A( IA), AS PRESENT ASSESSEE BEING AN INDIVIDUAL IS NOT LIABLE TO DEDUCT TAX IN VIEW OF P ROVISIONS OF SECTION 194C(1) AS EXISTED IN THE RELEVANT ASSESSMENT YEARS. NO DOUBT, ASSESSEES TURNOVER EXCEEDS THE MONETARY LIMIT AS SPECIFIED UNDER CLAUSE (A) OR CLAUSE (B) OF SECT ION 44AB AND THE ASSESSEES ACCOUNTS ARE SUBJECT TO AUDIT AND THE ASSESSEE HAS AUDITED H ER ACCOUNTS AND FILED TAX AUDIT REPORT ALONG WITH RETURN OF INCOME. WE FIND THAT THE ASSES SING OFFICER HAS MADE DISALLOWANCE IN VIEW OF THE AMENDED PROVISIONS OF SECTION 194C(1) B Y THE FINANCE ACT, 2007 WITH EFFECT FROM 01.06.2007 WHEREIN IT IS PROPOSED TO AMEND SU B-SECTION (1) IN SECTION 194C SO AS TO INCLUDE PAYMENTS MADE BY ANY INDIVIDUAL OR HINDU UNDIVIDED FAMILY WHOSE TOTAL SALES / GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR P ROFESSION CARRIED ON BY HIM EXCEED MONETARY LIMIT SPECIFIED UNDER CLAUSE (A) OR CLAUSE (B) OR SECTION 44AB DURING THE FINANCIAL YEAR OR IMMEDIATELY PRECEDING FINANCIAL Y EAR IN WHICH SUCH SUM IS CREDITED OR PAID TO THE ACCOUNT OF THE CONTRACTOR. THIS AMENDME NT TAKES EFFECT FROM 1 ST DAY OF JUNE, 2007 AND IS APPLICABLE FOR AND FROM ASSESSMENT YEAR 2008-09. IN SECTION 194C(1) WITH EFFECT FROM 01.06.2007, BY THE FINANCE ACT, 2007, C LAUSE AS INSERTED, READS AS UNDER :- (K) ANY INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WH OSE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PRO FESSION CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAU SE (A) OR CLAUSE (B) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANCIAL YEAR IN WHICH SUCH SUM IS CREDITED OR PAI D TO THE ACCOUNT OF THE CONTRACTOR, SHALL, AT THE TIME OF CREDIT OF SUCH SU M TO THE ACCOUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CAS H OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO - (I) ONE PER CENT IN CASE OF ADVERTISING, (II) IN ANY OTHER CASE TWO PER CENT, OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THERE IN : PROVIDED THAT NO INDIVIDUAL OR A HINDU UNDIVIDED FA MILY SHALL BE LIABLE TO DEDUCT INCOME-TAX ON THE SUM CREDITED OR PAID TO THE ACCOUNT OF THE CONTRACTOR WHERE SUCH SUM IS CREDITED OR PAID E XCLUSIVELY FOR PERSONAL PURPOSES OF SUCH INDIVIDUAL OR ANY MEMBER OF HINDU UNDIVIDED FAMILY. 7. WE FIND FROM THE ARGUMENTS OF LD.SR. DR THAT REV ENUE WANT TO INVOKE PROVISIONS OF SUB-SECTION (2) OF SECTION 194C FOR FURTHERANCE OF THIS CASE BUT WE ARE OF THE CONSIDERED VIEW THAT SECTION 194C(2) WILL APPLY TO THE PAYMENT S MADE TO SUB-CONTRACTORS BY THE CONTRACTOR AND NOT BY THE ASSESSEE. IN THE PRESENT CASE, IT IS AN ADMITTED POSITION THAT THE ASSESSEE HAS MADE PAYMENTS ON ADVERTISEMENT TO THE CONTRACTORS AND NOT TO SUB- CONTRACTORS. FURTHER AS REFERRED BY LD. COUNSEL FOR THE ASSESSEE, THIS PROVISION WAS EXPLAINED BY CBDT CIRCULAR NO.3 OF 2008 DATED 12.03 .2008 WHICH IS REPORTED IN 5 ITA 816/K/201 0 KANAI LAL SHARMA. A.Y. 07-08 (2008)299 ITR 8 (STATUTE) AND THE RELEVANT CIRCULAR AS REPORTED AT PAGE 71, READS AS UNDER :- 54. EXPANSION OF SCOPE OF THE PROVISIONS OF SECTIO N 194C. 54.1 THE EXISTING PROVISIONS OF SUB-SECTION (1) OF SECTION 194C PROVIDED FOR DEDUCTION OF INCOME-TAX AT SOURCE FROM ANY SUM CREDITED OR PA ID TO THE RESIDENT CONTRACTOR FOR CARRYING OUT ANY WORK (INCLUDING SUP PLY OF LABOUR FOR CARRYING OUT ANY WORK) IN PURSUANCE OF A CONTRACT B ETWEEN THE CONTRACTOR AND THE GOVERNMENT, LOCAL AUTHORITIES, STATUTORY CO RPORATIONS, COMPANIES, CO-OPERATIVE SOCIETIES, STATUTORY AUTHORITIES ENGAG ED IN PROVIDING HOUSING ACCOMMODATION, ETC., REGISTERED SOCIETIES, TRUSTS, UNIVERSITIES AND FIRMS. THE RATE OF TDS IS 1% IN RESPECT OF ADVERTISING CON TRACTS AND 2% IN OTHER CASES. 54.2 THE EXISTING PROVISIONS OF SUB-SECTION (1) OF SECTION 194C DID NOT PROVIDE FOR DEDUCTION OF TAX AT SOURCE ON PAYMENTS MADE BY AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY TO A CONTRACTOR. 54.3 CONSIDERING THE RISING NUMBER OF CONTRACTS BEI NG AWARDED BY INDIVIDUALS AND HUFS CARRYING ON BUSINESS OR PROFES SION AND THE INCREASING VOLUME OF SUCH PAYMENTS TO CONTRACTORS, IT WAS FELT THAT THERE IS NEED TO REQUIRE SUCH PERSONS TO DEDUCT TAX AT SOURC E FROM PAYMENTS MADE BY THEM TO CONTRACTORS. 54.4 THERE WOULD BE GENUINE DIFFICULTIES IF INDIVID UALS OR HUFS WITH SMALL BUSINESS TURNOVERS OR GROSS RECEIPTS OF PROFESSION ARE REQUIRED TO DEDUCT TAX AT SOURCE. AN EXCEPTION IN SUCH CASES WOULD BE JUSTIFIED. SIMILARLY THE CONTRACTS AWARDED BY AN INDIVIDUAL OR A MEMBER OF H UF OF HUF EXCLUSIVELY FOR PERSONAL PURPOSES MERIT EXCLUSION. 54.5 ACCORDINGLY, THE FINANCE ACT, 2007, HAS SUBSTI TUTED THE SAID SUB- SECTION (1) TO INCLUDE IN ITS AMBIT SUCH INDIVIDUAL OR A HINDU UNDIVIDED WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSION CARRIED ON EXCEED THE MONETARY LIMITS SP ECIFIED UNDER CLAUSE (A) OR CLAUSE (B) OF SECTION 44AB DURING THE FINANC IAL YEAR IMMEDIATELY PRECEDING FINANCIAL YEAR IN WHICH SUM IS CREDITED O R PAID TO THE ACCOUNT OF THE CONTRACTOR. THIS AMENDMENT SHALL NOT APPLY IN R ESPECT OF PAYMENTS MADE TO A CONTRACTOR BY ANY INDIVIDUAL OR A MEMBER OF A HINDU UNDIVIDED FAMILY EXCLUSIVELY FOR THEIR PERSONAL PURPOSES. 54.6 APPLICABILITY - THIS AMENDMENT WILL TAKE EFFEC T FROM THE 1ST DAY OF JUNE, 2007. 8. IN VIEW OF THE ABOVE CLEAR PROVISIONS OF SECTION 194(1) AS EXISTING IN ASSESSMENT YEARS 2006-07 & 2007-08, I.E. RELEVANT ASSESSMENT YEARS I N THE PRESENT APPEALS, IT IS CLEAR THAT THE ASSESSEE IS UNDER NO OBLIGATION TO DEDUCT TDS O N THE EXPENDITURE OF ADVERTISEMENT, AS THE ASSESSEE BEING AN INDIVIDUAL, AND THE CLAIM OF THE ASSESSEE IS AS PER PROVISIONS OF LAW. ONCE THE ASSESSEE IS NOT LIABLE TO DEDUCT TDS UNDER THE PROVISION OF SECTION 194C(1), THE PROVISIONS OF SECTION 40A(IA) FOR MAKING DISALLOWAN CE OF EXPENDITURE FOR NON-DEDUCTION OF TDS WILL NOT APPLY. WE FURTHER FIND THAT, IT IS NOT THE CASE OF THE REVENUE THAT THE EXPENSES ARE BOGUS OR UNREASONABLE OR EXCESSIVE BUT THE DISA LLOWANCE IS MADE MERELY FOR NON- 6 ITA 816/K/201 0 KANAI LAL SHARMA. A.Y. 07-08 DEDUCTION OF TDS. ACCORDINGLY, WE ARE OF THE CONSI DERED VIEW THAT CIT(A) HAS RIGHTLY DELETED THE DISALLOWANCE AND WE CONFIRM THE SAME. 6. AS THE LEGAL ISSUE RAISED BY THE ASSESSEE IS EXA CTLY ON SIMILAR FACTS IN THE PRESENT CASE, TAKING A CONSISTENT VIEW, WE ARE OF THE VIEW THAT THE AMENDED PROVISIONS OF SECTION 194C(1) OF THE ACT WILL NOT APPLY TO THE PRESENT AS SESSMENT YEAR OF THE ASSESSEE. ACCORDINGLY, THIS ISSUE OF THE ASSESSEES APPEAL IS ALLOWED. 7. THE FIRST THREE ORIGINAL GROUNDS RAISED ARE AS R EGARDS TO DISALLOWANCE OF TRANSPORTATION CHARGES BY INVOKING THE PROVISIONS O F SECTION 40(A)(IA) OF THE ACT ON THE GROUND THAT THE ASSESSEE FAILED TO DEDUCT TAX U/S. 194C(1) OF THE ACT. FOR THIS, THE ASSESSEE HAS RAISED THE FOLLOWING THREE GROUNDS: 1.THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A), ASANSOL ERRED IN CONFIRMING THE DISALLOWANCE OF DEDUCTION OF RS.1 7,66,309/- ON ACCOUNT OF TRANSPORT CHARGES MADE BY THE A.O. U/S 40(A)(IA) ON THE GROUND THAT THE TAX DEDUCTIBLE U/S 194C WAS NOT DEDUCTED WHERE AS THE A PPELLANT IS THE OWNER OF THE PETROL PUMP AND THE PAYMENT WERE MADE DIRECTLY TO T HE OWNER/DRIVER OF THE VEHICLE AND WHERE AS THERE WAS NEITHER VERBAL NOR W RITTEN CONTRACT WITH THEM AND THE CASE DOES NOT FALL WITHIN THE AMBIT OF SEC 194C. 2. THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE T HE LD. CIT (A), ASANSOL ERRED IN NOT APPRECIATING THE FACT THAT THE BOOKS OF ACCO UNT WERE NOT PRODUCED ON THE GROUND THAT THE SAME WERE LOST IN TRANSIT AND COPY OF FIR WITH LOCAL POLICE WERE FILED BEFORE THE A.O. AND ALSO TO THE CIT(A). 3. THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE T HE LD. CIT (A), ASANSOL ERRED IN NOT APPRECIATING THE FACT THAT THE DECISION OF H ONOURABLE ITAT IN THE CASE OF RAKSHIT TRANSPORT IN ITA NO.261/KOL/2009 A COPY OF WHICH WAS SUBMITTED BEFORE HIM IN COURSE OF APPEAL PROCEEDING IS SQUARE LY APPLICABLE IN THE CASE OF THE APPELLANT 8. AT THE OUTSET, IT IS TO BE STATED THAT SINCE WE HAVE DECIDED THE ISSUE ON JURISDICTION IN FAVOUR OF THE ASSESSEE, WE NEED NOT TO DEAL ON M ERITS. ACCORDINGLY SAME BEING ACADEMIC, WE DO NOT ADJUDICATE. 9. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST CONFIRMATION OF ADDITION OF RS.1 LAC BY CIT(A) OUT OF THE TOTAL ADDITION OF RS. 3,41,582/- ON ACCOUNT OF G.P. FOR THIS, THE ASSESSEE HAS RAISED THE FOLLOWING GROUND NOS.4 AND 5: 4. THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE THE LD. CIT (A), ASANSOL ERRED IN CONFIRMING THE ADDITION OF RS.1,00,000/- OUT OF RS.341582/- MADE BY THE A.O. ON THE GROUND OF ESTIMATE OF G.P. @7% AS AGAINST 6. 30 % DISCLOSED BY THE APPELLANT. 7 ITA 816/K/201 0 KANAI LAL SHARMA. A.Y. 07-08 5. THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE T HE LD. CIT (A), ASANSOL ERRED IN NOT APPRECIATING THE FACT THAT THE G.P. @ 6.30% IS HIGHER THAN G.P. DISCLOSED BY ANY PETROL PUMP DEALER IN THE AREA AND G.P. @ 6. 30% IS QUITE REASONABLE AND WHERE AS THE BOOKS OF ACCOUNTS COULD NOT BE PRODUCE D AS THE SAME WERE LOST IN TRANSIT AND COPY OF FIR MADE BEFORE LOCAL POLICE ST ATION WERE SUBMITTED BEFORE THE AO. AND ALSO BEFORE THE CIT(A). 10. THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING HAS NOT PRESSED THIS ISSUE. HENCE, GROUND NOS. 4 AND 5 ARE DISMISSED AS NOT PRE SSED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED AS INDICATED ABOVE. 12. ORDER PRONOUNCED IN THE OPEN COURT ON 11.4.2011 . SD/- SD/- . ! ! ! ! . '# , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( !# !# !# !#) )) ) DATED 11TH DAY OF APRIL, 2011 /0 %12 3 JD.(SR.P.S.) '. 4 ,5 6'5'7- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT SHRI KANAI LAL SHARMA, NARSINGH BANDH, BURNPUR, ASANSOL-713325 2 ,-*+ / RESPONDENT ACIT, CIRCLE-2, ASANSOL 3 . .% ( )/ THE CIT(A), ASANSOL 4. 5. .% / CIT ASANSOL 5 => ,% / DR, KOLKATA BENCHES, KOLKATA -5 ,/ TRUE COPY, '.%?/ BY ORDER, 2 /ASSTT. REGISTRAR .