Rokia Khatun, Nadia V. ITO, Jangipur Murshidabad, Murshidabad

ITA 942/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1600 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 13-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELL ATE TRIBUNAL KOLKATA BENCH, KOLKATA (BENCH D) BEFORE SHRI ABY. T. VARKEY, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER I.T.A. NO.942/KOL/201 4 ASSESSMENT YEAR 2009-10 ORDER PER M. BALAGANESH , AM THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST TH E ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) XXXVI, KOLKA TA (IN SHORT THE CIT(A)) VIDE APPEAL NO.312/CIT(A)-XXXVI/KOL/ITO-J ANGIPUR, MSD/11-12 DATED 29.01.2014. ASSESSMENT YEAR FRAMED U/S 143(3) OF THE INCOME TAX ACT 1961 (HEREINAFTER AS THE SAID ACT) DATED 23.08.2011 FO R THE A.Y 2009-10 BY THE INCOME TAX OFFICER, JANGIPUR, MURSHIDABAD (IN SHORT THE LD. A.O). ROKIA KHATUN [PAN : AMAPK0898A] -VS- I.T.O., JANGIPUR, MURSHIDABAD (APPELLANT) (RESPONDENT) FOR THE APPELLANT SHRI K. M. ROY & P. S. GUPTA, ADV OCATE FOR THE RESPONDENT SHRI A. K. SINHA, ADDL. CIT DATE OF HEARING 08.06.2017 DATE OF PRONOUNCEMENT 07.07.2017 2 I.T.A. NO.942/KOL/2014 ASSESSMENT YEAR 2009-10 ROKIA KHATUN 2. THE GROUND NO.1, 5 & 6 RAISED BY THE ASSESSEE AR E GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 3. THE GROUND NO.4 RAISED BY THE ASSESSEE HAS BEEN STATED TO BE NOT PRESSED BY THE LD. AR DURING THE COURSE OF HEARING. THE SAME IS RE CKONED AS A STATEMENT FROM THE BAR AND ACCORDINGLY THE GROUND NO.4 RAISED BY T HE ASSESSEE IS DISMISSED AS NOT PRESSED. 4. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN UPHOLDING DISALLOWANCE MADE BY THE LD. A.O. U/S 40(A)(IA) OF THE ACT IN THE SUM OF RS.9,36,000/- AND 3,16,607/-, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE BRIEF FACTS OF THE ASSESSEE ARE THAT THE ASS ESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF BIDI LEAVES & TOBACCO. THE LD. A.O. OBSE RVED FROM THE CARRIAGE INWARD BILLS RECEIVED DURING THE COURSE OF HEARING AMOUNTING TO RS.20,47,677/-, THAT THE ASSESSEE HAS PAID RS.17,31,070/- FOR CARRI AGE TO BRING BIDI LEAVES PURCHASED FROM OUTSIDE. HE OBSERVED FROM THE BILLS PAID TO THE TRUCKS THAT ASSESSEE HAS PAID 12 TIMES EXCEEDING RS.20,000/- AS SINGLE P AYMENT AS CARRIAGE AND PAID 6 TIMES EXCEEDING RS.50,000/- TO SAME TRUCK AS CARRIA GE, BOTH TOTALLING RS.9,36,000/. THE LD. A.O. INVOKED THE PROVISIONS OF SECTION 194( 3) OF THE ACT READ WITH SECTION 40(A)(IA) AND DISALLOWED THE SAME IN THE AS SESSMENT. 6. SIMILARLY, THE LD. A.O OBSERVED THAT THE ASSESSE E HAS MADE PAYMENT OF RS.3,16,607/- TO KAJAL ROADWAYS, CHIKHODRA, GUJARAT WITHOUT DEDUCTION OF TAX AT SOURCE. THE LD. A.O DISALLOWED THE SAME U/S 40(A)(I A) OF THE ACT. 3 I.T.A. NO.942/KOL/2014 ASSESSMENT YEAR 2009-10 ROKIA KHATUN 7. THE LD. CIT(A) UPHELD THE DISALLOWANCE MADE BY T HE LD. A.O BY OBSERVING AS UNDER: 3.7 ADMITTEDLY, THE PAYMENT IN THE CASE TO THE TRU CK OWNERS FOR TRANSPORTATION WAS MORE THAN RS.20,000/- IN EACH TR IP, FOR WHICH TAX DEDUCTION AT SOURCE U/S 194C OUGHT TO HAVE BEEN DON E. AS HAS BEEN HELD IN THE CITED DECISION, AND ON PLAIN READING OF THE SEC TION AND CIRCULARS, PAYMENT EVEN THOUGH NOT MADE APPARENTLY AS PER ANY WRITTEN AGREEMENT ARE CONTRACTUAL IN NATURE AS PER SECTION 194C(1) OF THE I.T. ACT, FOR CARRYING OUT A WORK (I.E. CARRIAGE OF GOODS BY ANY MODE OF TRANS PORT). 3.8 AS THE APPELLANT HAD MADE THE FREIGHT PAYMENT TO THE TRANSPORTERS, WHERE THE PAYMENT FOR EACH TRIP EXCEEDED RS.20,000/ - IN EACH CASE, WITHOUT TAX DEDUCTION AT SOURCE, THE A.O. HAD RIGHTLY DISAL LOWED THE CLAIM U/S 40(A)(IA) OF THE I.T. ACT. IN VIEW OF THE ABOVE, TH E ADDITION MADE BY THE A.O ON THIS GROUND IS CONFIRMED. 8. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, LD. C.I.T.(APPEALS) WAS NOT AT ALL JUSTIFIED IN CONFIRM ING THE ADDITION OF RS.9,36,000.00 & 3,16,607.00 TOTALLING 12,52,607.00 & HE OUGHT TO HAVE CONSIDERED THE WRITTEN SUBMISSION AND THE EXPLANATI ON OFFERED BY THE APPELLANT AT THE APPELLATE STAGE. 3. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE REASONS ADDUCED BY THE LD. C.I.T.(A) IN REJECTING THE EXPLANATION W ITHOUT CONSIDERING THE REASONS FOR NON-DEDUCTION OF TDS FROM THE PAYMENTS TO THE CARRIAGE CONTRACTORS AND IN CONFIRMING THE ADDITION OF RS.12 ,52,607.00 ARE NOT AT ALL PROPER AND JUSTIFIED AND AS SUCH THE ADDITION IS LI ABLE TO BE DELETED IN FULL. 9. AT THE TIME OF HEARING, THE LD. A/R STATED THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THIS TRIBUNAL IN THE CASE OF ARSH I RON & STEEL LTD. VS- A.C.I.T IN I.T.A NO.206-207/KOL/2014 DATED 12.05.2017. IN RESP ONSE TO THIS, THE LD. DR VEHEMENTLY RELIED ON THE ORDER OF THE LOWER AUTHORI TIES. 4 I.T.A. NO.942/KOL/2014 ASSESSMENT YEAR 2009-10 ROKIA KHATUN 10. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND TH AT THE ISSUE UNDER DISPUTE IS SQUARELY COVERED BY THE DECISION OF THIS TRIBUNAL I N ARSH IRON & STEEL LTD. VS. ACIT SUPRA, WHEREIN IT WAS HELD THAT:- 37. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FOREGOING DISCUSSION, WE FIND THAT THE ASSESSEE HIRED THE LORRIES FROM OUTSIDE FOR THE TRANSPORTATION OF GOOD S AND THERE WAS NOT CONTRACT BETWEEN THE ASSESSEE AND THE LORRY OWNERS. THE REVENUE COULD NOT ESTABLISH THAT THESE LORRY OWNERS WERE FASTENED WIT H ANY OF THE LIABILITIES FOR THE SAID CARRIER OF THE GOODS. IN THE SIMILAR FACTS AND CIRCUMSTANCES, THE HONBLE JURISDICTIONAL HIGH COURT HAS DECIDED THIS ISSUE IN FAVOUR OF ASSESSEE IN THE CASE OF CIT VS. M/S STUMM INDIA IN ITA NO.127 OF 2009 AND RELEVANT EXTRACT IS REPRODUCED BELOW: IT IS URGED BEFORE US THAT THE LEARNED TRIBUNAL OUG HT NOT TO HAVE ACCEPTED THE JUDGMENT AND ORDER OF THE CIT(APPEAL) WHO HAS Q UASHED THE DISALLOWANCE OF DEDUCTION OF RS.41,33,710/- AND ON ACCOUNT OF TAX DEDUCTION AT SOURCE. THE LEARNED TRIBUNAL HAS RECOR DED THE FACT THAT THE DEPARTMENT HAS NOT BEEN ABLE TO BRING ANY MATERIAL ON RECORD TO SHOW THAT THE ASSESSEE HAS MADE THE PAYMENT TO THE TRANSPORTE RS IN PURSUANCE OF CONTRACT FOR CARRIAGE OF GOODS OF THE ASSESSEE AND THE QUESTION OF DEDUCTION AT SOURCE UNDER SECTION 194C DOES NOT AND CANNOT AR ISE. IN THE ABSENCE OF EVIDENCE OF PAYMENT MADE BY THE A SSESSEE TO THE TRANSPORTERS, THE ASSESSEE CANNOT BE SADDLED WITH T HE LIABILITY OF DEDUCTING TAX AT SOURCE. BEFORE US NO OTHER POINT HAS BEEN UR GED NOR IT IS SAID THAT THE AFORESAID FACT FINDING IS TRUTHFUL WITHOUT ANY BASI S WHATSOEVER. HENCE, WE DISMISS THE APPEAL HAVING FOUND NO POINT OF LAW HAV ING BEEN INVOLVED. IN VIEW OF ABOVE, WE FIND THAT THERE WAS NO CONTRAC T BETWEEN THE ASSESSEE AND LORRY OWNERS. THE ROLE OF THE LORRY OWNERS WAS VERY LIMITED TO THE EXTENT OF CARRIAGE OF GOODS WITHOUT ANY OTHER LIABILITY. T HEREFORE, THEIR PAYMENT CANNOT BE CONSIDERED AS IN PURSUANCE OF CONTRACT AS ENVISAGED UNDER SECTION 194C OF THE ACT. CONSIDERING THE FACTS AND CIRCUMSTANCES AND CITED CASE LAW, WE REVERSE THE ORDERS OF AUTHORITIES BELO W. THE GROUND RAISED BY ASSESSEE IS ALLOWED. ACCORDINGLY, AO IS DIRECTED. 5 I.T.A. NO.942/KOL/2014 ASSESSMENT YEAR 2009-10 ROKIA KHATUN 11. RESPECTFULLY FOLLOWING THE AFORESAID DECISION, WE ALLOW THE GROUNDS RAISED BY THE ASSESSEE. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 07.07.2017. SD/- SD/- [ABY. T. VARKEY] [M. BALAGANESH] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 07.07.2017 {RS SPS} COPY OF THE ORDER FORWARDED TO: 1. APPELLANT/ASSESSEE ROKIA KHATUN, PROP. OF SOLEMAN TRADING CO., VILL & P.O DHULIYAN, DIST.-MURSHIDABAD. 2. REVENUE/RESPONDENT-I.T.O., JANGIPUR, MURSHIDABAD 3. CIT(A)- KOLKATA 4. CIT , KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE, DDO, KOLKATA BENCHES, KOLKATA.