Empire Packages Private Limited, Chandigarh V. ACIT, Chandigarh

ITA 882/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6508 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 03-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Section: 194C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NOS. 881 & 882/CHD/2016 ASSESSMENT YEARS: 2006-07 & 2008-09 M/S EMPIRE PACKAGES PRIVATE LIMITED, VS. THE ACIT, CIRCLE 1(1), C-609, 6 TH FLOOR, OFFICE BLOCK, CHANDIGARH PLOT NO. 178-178A, ELANTE MALL, INDL AREA, PHASE-1, CHANDIGARH PAN NO. AAACE5023G (APPELLANT) (RESPONDENT) APPELLANT BY : SH. MOHIT DHIMAN RESPONDENT BY : SH. MANJIT SINGH DATE OF HEARING : 28.12.2017 DATE OF PRONOUNCEMENT : 28.12.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEALS HAVE BEEN PREFERRED BY THE ASSE SSEE AGAINST THE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX ( APPEALS), [HEREINAFTER REFERRED TO AS CIT(A)]-1, CHANDIGARH DATED 19.5.201 6 & 13.5.2016 RELATING TO ASSESSMENT YEARS 2006-07 AND 2008-09 RESPECTIVEL Y. 2. THE SOLE ISSUE RAISED BY THE ASSESSEE IS REGARDING THE DISAL LOWANCE MADE BY THE LOWER AUTHORITIES U/S 40(A)(IA) OF THE INCOME-TAX ACT, 1961 (IN 2 SHORT 'THE ACT') FOR NON-COMPLIANCE OF PROVISIONS OF SECTION 194C WITH RESPECT TO NON-DEDUCTION OF TDS ON THE FREIGHT CHA RGES PAID. 3. THE MAIN CONTENTION OF THE LD. COUNSEL FOR THE A SSESSEE IS THAT THE INVOICE / PURCHASE PRICE OF THE GOODS WAS INCLUSIVE OF THE FREIGHT CHARGES, THEREFORE, IT CANNOT BE INFERRED THAT THE ASSESSEE HAD SEPARATELY PAID ANY FREIGHT CHARGES. THE CASE OF THE ASSESSEE WAS THAT THE GOODS WAS INCLUSIVE OF THE FREIGHT CHARGES AND, HENCE, THERE WAS NO LIA BILITY ON THE ASSESSEE FOR DEDUCTION OF TAX IN RESPECT OF FREIGHT CHARGES. 4. THE LD. COUNSEL IN THIS RESPECT HAS ALSO RELIED UPON THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT (EXEMPTIONS) VS. ASSTT. MANAGER (ACCOUNTS), FOOD CO RPORATION OF INDIA 326 ITR 106 (P&H) AND FURTHER IN THE CASE OF CIT V S. BHAGWATI STEEL (2011) 198 TAXMAN 275 (P&H). 5. THE LD. DR, ON THE OTHER HAND, HAS SUBMITTED THA T IT IS NOT ESTABLISHED ON THE FILE THAT THE PRICE OF THE GOODS WAS INCLUSIVE OF THE FREIGHT CHARGES. HE HAS SUBMITTED THAT IN SOME CASE S FREIGHT CHARGES HAVE BEEN PAID DIRECTLY BY THE ASSESSEE TO THE CONCERNED TRANSPORTER AND IN SOME OTHER CASES THE FREIGHT CHARGES HAVE BEEN SEPARATEL Y BILLED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. NO SA MPLE COPIES OF THE INVOICES / FREIGHT CHARGES BILLS HAVE BEEN PLACED B EFORE US. HOWEVER, BOTH THE LD. REPRESENTATIVES HAVE RELIED UPON CERTAIN OB SERVATIONS MADE BY THE LOWER AUTHORITIES I.E. ASSESSING OFFICER AND THE CI T(A) EITHER IN THE FIRST ROUND OF APPEAL OR IN THE SECOND ROUND OF APPEAL. 7. AFTER CONSIDERING THE SUBMISSION OF LD. REPRESEN TATIVES OF THE PARTIES AND GOING THROUGH THE RECORD, WE FIND THAT THERE ARE DISPUTES 3 RELATING TO THE PAYMENTS MADE ON ACCOUNT OF FREIGHT CHARGES. AFTER CONSIDERING THE LAW LAID DOWN BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT (EXEMPTIONS) VS. ASSTT. M ANAGER (ACCOUNTS), FOOD CORPORATION OF INDIA (SUPRA), WE RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER AND DIRECT THE ASSESSING OFFICER TO RE-EXAMINE THE CASE OF THE ASSESSEE WITH RESPECT TO BILLS / INVOICES PR ODUCED ETC. AND WHEREIN THE PRICE OF THE GOODS IS INCLUSIVE OF FREIGHT CHAR GES, NO DISALLOWANCE U/S 40(A)(IA) WILL BE ATTRACTED. HOWEVER, WHEREIN THE FREIGHT CHARGES HAVE BEEN CHARGED EXTRA OR HAVE BEEN DIRECTLY PAID TO TH E CONCERNED TRANSPORTER, THE PROVISIONS OF SECTION 194C READ WITH SECTION 40 (A)(IA) OF THE ACT WILL BE ATTRACTED EXCEPT THE AMOUNTS WHICH ARE BELOW TH E PRESCRIBED LIMIT AS PER THE PROVISIONS OF LAW. AT THIS STAGE, THE LD. COUNSEL FOR THE ASSESSEE HAS MADE A STATEMENT AT BAR THAT THERE IS ANOTHER ISSUE IN RELATION OF T HE DISALLOWANCE FOR NON- COMPLIANCE OF PROVISIONS OF SECTION 194A OF THE ACT AND HE DOES NOT PRESS THE SAME. THE SAID ISSUE IS DISMISSED AS NOT PRESSE D. NO OTHER ISSUE IS PRESSED OR AGITATED BEFORE US. ITA NO. 882/CHD/2016 - ASSESSMENT YEAR 2008-09 8. BOTH THE LD. REPRESENTATIVES OF THE PARTIES HAVE STATED AT BAR THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL IS IDENTICAL T O THAT HAS BEEN RAISED IN THE APPEAL FOR ASSESSMENT YEAR 2006-07. 9. IN VIEW OF OUR DISCUSSION MADE ABOVE, THIS MATTE R IS RESTORED TO THE FILE OF THE ASSESSING OFFICER ON SIMILAR TERMS AS D ISCUSSED ABOVE. 4 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DR. B.R.R. KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28.12.2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR