Dy. Commissioner of Income Tax-6, Kanpur V. M/s Kanchan Printing Press Pvt. Ltd., Kanpur

ITA 841/LKW/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2049 (ITAT-LUCKNOW)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-08-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 21-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P K KAPOOR
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.841/LKW/2014 ASSESSMENT YEAR:2010-11 DCIT-6 KANPUR V. M/S KANCHAN PRINTING PRESS PVT. LTD. KANPUR TAN/PAN:AAACK6670P (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. AMIT NIGAM, D.R. RESPONDENT BY: SHRI. P. K. KAPOOR, C.A. DATE OF HEARING: 28 08 2015 DATE OF PRONOUNCEMENT: 31 08 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) ON A SOLITARY GROUND THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.58,93,059/- ON ACCOUNT OF DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') WITHOUT APPRECIATING THE FACT THAT THESE PAYMENTS CAN NEVER BE IN THE NATURE OF CONTRACTUAL PAYMENTS AND THE ASSESSEE HAS NEVER CLAIMED THAT THE PERSONS TO WHOM THE PAYMENTS WERE MADE ARE THEIR REGULAR EMPLOYEES. 2. THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE HAS MADE PAYMENTS TO VARIOUS PERSONS AS CONSULTANCY CHARGES. THE ASSESSING OFFICER WAS OF THE VIEW THAT TDS WAS REQUIRED TO BE DEDUCTED ON CONSULTANCY PAYMENTS UNDER SECTION 194J OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'), BUT THE :- 2 -: ASSESSEE HAS DEDUCTED THE SAME UNDER SECTION 194C OF THE ACT. HE ACCORDINGLY INVOKED THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND DISALLOWED THE PAYMENT FOR THE REASON THAT TDS WERE NOT DEDUCTED AS PER PROVISIONS OF THE ACT. 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND THE LD. CIT(A) HAS HELD THAT DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT CANNOT BE MADE FOR LESS DEDUCTION OF TDS. THE DISPUTE IS WITH REGARD TO THE DEDUCTION OF TDS EITHER UNDER SECTION 194C OR 194J OF THE ACT, WHICH DOES NOT MEAN THAT THE ASSESSEE HAS NOT DEDUCTED ANY TDS. WHILE ADJUDICATING THE ISSUE, THE LD. CIT(A) HAS PLACED RELIANCE UPON THE JUDGMENT OF THE HON'BLE KOLKATA HIGH COURT IN THE CASE OF CIT VS. S. K. TEKRIWAL IN I.T.A. NO. 183 OF 2012, GA NO.2069 OF 2012. RELIANCE WAS ALSO PLACED UPON THE ORDER OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF CIT VS. CHANDABHOY & JASSABHOY, 49 SOT 448. BEING CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE, THE LD. CIT(A) HAS DELETED THE ADDITION HAVING HELD THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT CANNOT BE INVOKED FOR LESS DEDUCTION OF TDS. 4. AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND THE LD. D.R. HAS PLACED RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER WHEREAS THE LD. COUNSEL FOR THE ASSESSEE, BESIDES PLACING RELIANCE UPON THE ORDER OF THE LD. CIT(A), HAS INVITED OUR ATTENTION TO THE JUDGMENT OF THE HON'BLE KOLKATA HIGH COURT IN THE CASE OF CIT VS. S. K. TEKRIWAL (SUPRA) AND THE ORDER OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF CIT VS. CHANDABHOY & JASSABHOY (SUPRA). THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO PLACED RELIANCE UPON THE OTHER ORDER OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF SUNBELL ALLOYS COMPANY OF INDIA LTD., MUMBAI VS. ACIT IN I.T.A. NO. 8966/MUM/2010 & 6178/MUM/2011. :- 3 -: 5. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES AND VARIOUS JUDICIAL PRONOUNCEMENTS IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT SECTION 40(A)(IA) OF THE ACT CAN ONLY BE INVOKED FOR NON-DEDUCTION OF TDS AND NOT FOR LESS DEDUCTION OF TDS, THEREFORE, THE DISALLOWANCE OF PAYMENT UNDER SECTION 40(A)(IA) OF THE ACT IS NOT PROPER. AT THE MOST, SHORT DEDUCTION OF TDS CAN ONLY BE RECOVERED, IF IT IS FINALLY HELD THAT THE ASSESSEE WAS REQUIRED TO DEDUCT TDS UNDER SECTION 194J OF THE ACT, BUT THIS CONTROVERSY IS NOT BEFORE US. WE ARE, THEREFORE, OF THE VIEW THAT THE LD. CIT(A) HAS PROPERLY ADJUDICATED THE ISSUE AND NO INFERENCE IS CALLED FOR THEREIN. WE ACCORDINGLY CONFIRM THE ORDER OF THE LD. CIT(A). 6. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31 ST AUGUST, 2015 JJ:3108 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR