ACIT, UDAIPUR V. M/s. Navneet Motors, UDAIPUR

ITA 92/JODH/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7968 (ITAT-JODHPUR)
• Duration Of Justice: 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-11-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 27-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Section: 43B; 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBE AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 92/JU/2012 ASSESSMENT YEAR : 2008-09 THE ACIT, VS. M/S NAVNEET MOTORS, CIRCLE-1, UDAIPUR UDAIPUR PAN NO. AACFN4017G. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.R. KOKANI RESPONDENT BY : NONE DATE OF HEARING : 27.11.2012 DATE OF PRONOUNCEMENT : 13.12.2012 ORDER PER N.K.SAINI, A.M. THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST T HE ORDER DATED 26.12.2011 OF CIT(A), UDAIPUR FOR THE ASSESSMENT YE AR 2008-09. 2. DURING THE COURSE OF HEARING NOBODY WAS PRESENT ON BEHALF OF THE ASSESSEE, WE THEREFORE, PROCEEDED EX. PARTE QUA THE ASSESSEE AND THE CASE IS DECIDED ON MERIT AFTER HEARING THE LD DR. 2 3. THE FIRST GROUND IN THIS APPEAL RELATES TO THE DELETION OF DISALLOWANCE OF RS. 10,15,575/- MADE BY THE ASSESSI NG OFFICER U/S 40(A)(IA) OF THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' IN SHORT]. 4. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THA T THE ASSESSEE FILED E- RETURN OF INCOME ON 28.9.2008 DECLARING AN INCOME O F RS. 40,14,000/- WHICH WAS PROCESSED U/S 143(1) OF THE ACT. LATER O N, THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE MADE A PAYMENT OF RS. 11,50,100/- TO M/S NEW SHIV SHAKTI BODY AND ADMITTED IN ITS LETTER THA T TDS WAS APPLICABLE ONLY IN RESPECT OF PAYMENT OF LABOUR CHARGES OF RS. 1,34,525/-. AS REGARDS TO THE BALANCE AMOUNT OF RS. 10,15,575/-, IT WAS ST ATED THAT IT WAS NOT A PAYMENT OF CONTRACTOR AND IN FACT WAS IN THE NATURE OF THE PURCHASE OF GOODS AND DID NOT COME UNDER THE PURVIEW OF TDS. T HE ASSESSING OFFICER, HOWEVER, DID NOT FIND MERIT IN THE CONTENTION OF TH E ASSESSEE BY OBSERVING THAT THE ASSESSEE HAD NOT BEEN ABLE TO FURNISH ANY EVIDENCE SHOWING THAT THE BILLS FOR NEW BUS / TRUCK BODY AND FOR LABOUR C HARGES WERE RAISED SEPARATELY BY THE PAYEE AND ONLY LABOUR CHARGES AMO UNTING TO RS. 1,34,525/- WERE SUBJECT TO TDS PROVISIONS. ACCORD ING TO ASSESSING OFFICER, THE ENTIRE PAYMENT OF RS. 11,50,150/- FOR BUS / TRUCK BODY WAS A COMPOSITE PAYMENTS FOR BODY OF BUS/ TRUCK WHICH HAD BEEN MANUFACTURED AS PER REQUIREMENT AND SPECIFICATIONS OF THE ASSESS EE AND, THEREFORE, THE BALANCE PAYMENT OF RS. 10,15,575/- ALSO ATTRACT TDS PROVISIONS U/S 194C OF THE ACT. SINCE THE ASSESSEE HAD FAILED TO DEDUCT T HE TAX AT SOURCE ON 3 PAYMENT OF RS. 10,15,575/-, THE AS SESSING OFFICER DISALLOWED THE SAME U/S 40(A)(IA) OF THE ACT. 5. THE ASSESSEE CARRIED THE MATTER TO THE LD CIT(A) AND SUBMITTED THAT THE PAYMENT TO M/S NEW SHIV SHAKTI BODY AMOUTING TO RS. 10,15,575/- HAD BEEN MADE FOR FABRICATION OF NEW BUS CABIN / TRUCK BODY AND LARGE PORTION OF THE AMOUNT PAID WAS ONLY FOR MATERIAL THAT TOO W AS PURCHASED BY THE SUPPLIER HIMSELF. IT WAS CONTENDED THAT THOUGH THE NEW BODY FABRICATION WAS MADE AS PER SPECIFICATIONS GIVEN BY THE ASSESSE E, BUT THE PROPERTY IN GOODS PASSED TO THE ASSESSEE ONLY AFTER DELIVERY. A REFERENCE WAS MADE TO THE CBDT CIRCULAR NO.13/2006 DATED 13.12.2006 WHERE IN IT WAS CLARIFIED THAT THE PROVISIONS OF SECTION 194C WOULD APPLY IN RESPECT OF A CONTRACT FOR SUPPLY OF ANY ARTICLE OR THING AS PER PRESCRIBED SP ECIFICATION ONLY IF IT WAS A CONTRACT OF WORK AND NOT A CONTRACT FOR SALE. 6. THE LD CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE AMOUNT OF RS. 10,15,575/- HAD BEE N PAID FOR PURCHASE OF NEW BUS CABIN / TRUCK BODY I.E. FOR THE PURCHASE OF GOODS. THE LD CIT(A) POINTED OUT THAT THE PAYMENT OF RS. 10,15,575/- HAD BEEN MADE FOR THE PURPOSE OF FABRICATION OF NEW BUS CABIN / TRUCK BOD Y FOR WHICH THE MATERIAL WAS PURCHASED BY THE SUPPLIER AND GOODS PASSED ON I N HAND TO THE ASSESSEE AFTER DELIVERY OF GOODS, SO IT WAS IN THE NATURE OF PURCHASE OF GOODS AND PROVISIONS OF SECTION 194C WERE NOT APPLICABLE. ACC ORDINGLY, THE ADDITION OF RS. 10,15,575/- WAS DELETED. NOW THE DEPARTMENT IS IN APPEAL. 4 7. THE LD DR STRONGLY SUPPORTED THE ORDER OF THE AS SESSING OFFICER. 8. AFTER CONSIDERING THE SUBMISSIONS OF THE LD DR A ND THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT IN THE PRESENT CA SE, IT IS NOTICED THAT THE LD CIT(A) CATEGORICALLY STATED THAT THE ASSESSEE MA DE THE PAYMENT OF RS. 10,75,575/- TO M/S NEW SHIV SHAKTI BODY ON ACCOUNT OF PURCHASE OF FABRICATION MATERIAL OF NEW BUS CABIN / TRUCK BODY FOR WHICH THE MATERIAL WAS PURCHASED BY THE SUPPLIER AND THE GOODS PASSED ON IN THE HAND OF THE ASSESSEE AFTER DELIVERY OF GOODS, WHEN THE ASSESSEE PURCHASED THE GOODS AND MADE PAYMENTS ON ACCOUNT OF PURCHASES, THE PROV ISIONS OF SECTION 194C WERE NOT APPLICABLE. WE, THEREFORE, ARE OF THE VIEW THAT THE LD CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. 9. THE NEXT ISSUE VIDE GROUND NO.2 RELATES TO DELE TION OF ADDITION OF RS. 75,224/- MADE BY THE ASSESSING OFFICER U/S 36(I )(VA) R.W.S 2(24)(X) OF THE ACT. 10. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE TH AT THE ASSESSING OFFICER DISALLOWED EMPLOYEES CONTRIBUTION TOWARDS PAYMENT O F PF AND ESI AMOUNTING TO RS. 70,458/- AND RS. 4,766/- RESPECTIV ELY, SINCE THERE WAS DELAY IN DEPOSITING THE SAME. THE ASSESSEE CARRIED THE MATTER TO THE LD CIT(A) AND SUBMITTED THAT THE AMOUNT IN QUESTION WA S PAID BEFORE THE DUE DATE OF FILING OF RETURN. THE DETAILS OF THE DEPOS ITS WERE AS UNDER:- PF MONTH EMPLOYEE CONTRIBUTION DUE DATE DATE OF DEPOSIT SEPT 2007 25,272.00 15.10.07 19.10.07 5 FEB., 2008 23,502.00 15.03.08 18.03.08 MARCH 2008 21,684.00 15.04.08 15.05.08 ESI MARCH 2008 4,766.00 21.04.08 15.05.08 11. IT WAS STATED THAT THE DELAY WAS ONLY OF FEW DA YS AND ALL THE PAYMENTS EXCEPT FOR THE MONTH OF MARCH, 2008 WERE D EPOSITED IN THE YEAR ITSELF AND THE PAYMENT OF MARCH 2008 WAS ALSO MADE BEFORE THE DUE DATE OF FILING OF THE INCOME TAX RETURN, HENCE ALLOWABLE U/ S 43B OF THE ACT. RELIANCE WAS PLACED ON THE DECISION OF THE ITAT, CO CHIN BENCH IN THE CASE OF PARRY AGRO INDUSTRIES VS. ACIT (2009) 314 ITR ( AT) 181. 12. THE LD CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE PF AND ESI PAYMENTS HAD BEEN PAID BEFORE THE DUE DATE OF FILING OF RETURN AS PER THE DETAILS GIVEN BY ASS ESSING OFFICER AND BY THE ASSESSEE IN HIS SUBMISSIONS. THE LD CIT(A) DELETED THE ADDITION AS THE PAYMENT HAD BEEN MADE BEFORE THE DUE DATE OF FILING OF RETURN AS PER PROVISIONS OF SECTION 43B OF THE ACT. RELIANCE WAS PLACED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. VINAY CEMENT LTD. [2009] 313 ITR (ST.) 1. NOW THE DEPARTMENT IS IN A PPEAL. 13. WE HAVE CONSIDERED THE SUBMISSIONS OF LD DR AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THERE WAS A DELAY OF FEW DAYS IN DEPOSITING THE PF AND ESI FOR THE MONTH 6 OF SEPTEMBER 2007, FEBRUARY 2008 AND MARCH, 2008. HOWEVER, THE PAYMENT WAS MADE BEFORE FILING OF THE RETURN AND AS PER THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. VINAY CEMENT LTD (SUPRA), I.E. THE STATUTORY ITEMS LIKE PF AND ESI P AID BEFORE THE DUE DATE OF FILING OF THE RETURN HAVE TO BE ALLOWED AS A DEDUC TION. ACCORDINGLY, THE ADDITION MADE BY THE ASSESSING OFFICER WAS DELETED BY THE LD CIT(A) BY FOLLOWING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. VINAY CEMENT LTD. (SUPRA). WE, THEREFORE, DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 14. IN THE RESULT, THE APPEAL IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 13.12.2012 ) SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 13 TH DECEMBER, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR