MOUNT SHIVALIK INDUSTRIES LTD., Alwar V. ASSISTANT COMMISSIONER OF INCOME TAX, Alwar

ITA 964/JPR/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3495 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 08-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: TDS; Set aside
• Section: 40(a)(ia); 194C; 201

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 964/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 M/S MOUNT SHIVALIK INDUSTRIES LTD., 140 TH MILE STONE, DELHI-JAIPUR HIGHWAY, VILLAGE- GUNTI, TEHSIL, BEHROR, ALWAR. CUKE VS. THE CIT, CIRCLE-2, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCM6098 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI ASHISH SHARMA (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SMT. RUNI PAL (DCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 04/11/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 11/11/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT, ALWAR DATED 10.10.2017 FOR ASSESSMENT YEAR 201 3-14 WHEREIN THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) A LWAR HAS GROSSLY ERRED IN UPHOLDING THE DISALLOWANCE OF RS. 42,86,372/- UNDER SECTION 40(A)(IA) ON ACCOUNT OF NON-DEDUCTION OF TDS. 2. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) AL WAR HAS GROSSLY ERRED IN UPHOLDING/DISALLOWANCE OF RS. 18,0 4,847/- ON ACCOUNT OF MISC. EXPENSES. ITA NO. 964 /JP/2017 M/S MOUNT SHIVALIK INDUSTRIES LTD. VS. CIT 2 3. THAT THE CIT(A), ALWAR HAS GROSSLY ERRED IN UPHO LDING THE ADDITION OF RS. 12,82,160/- ON ACCOUNT OF INTEREST RECEIVED ON REFUNDS OF INCOME-TAX. 4. THAT THE CIT(A), ALWAR HAS FAILED TO APPRECIATE THE FACT AND ADD DISALLOWANCES OF RS. 15,29,193/- AND RS. 18,04, 847/- ON ACCOUNT OF TRAVELLING AND MISC. EXPENSES RESPECTIVE LY HAVE BEEN MADE WITHOUT BRINGING ON RECORD AND EVIDENCES TO SU PPORT THE ADDITIONS. 2. IN GROUND NO. 1, THE ASSESSEE HAS CHALLENGED THE SUSTENANCE OF DISALLOWANCE OF RS. 42,86,372/- U/S 40(A)(IA) OF TH E IT ACT. 3. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE ASSESSING OFFICER HAS DISALLOWED UNLOADING EXPENSES INCURRED BY THE ASSESSEE BY INVOKING PROVISIONS OF SECTION 40(A)(IA ) OF THE ACT. IT WAS SUBMITTED THAT THE ASSESSEE HAS ENGAGED SPOT LABOUR ERS FOR THE UNLOADING OF BEER CASES FROM TRUCK AT THE VARIOUS D EPOTS/GODOWNS OF BSBCL/RSBCL. IT WAS SUBMITTED THAT THE RESPONSIBILI TY TO TRANSPORT THE BEER CASES FROM THE ASSESSEES PREMISES TO THE DEPO TS/GODOWNS THROUGH THE TRANSPORTERS DID NOT REQUIRE THE LATTER TO ENGAGE THE UNLOADING LABOURERS. IT WAS SUBMITTED THAT THE SPOT LABOURERS WERE ENGAGED BY ASSESSEES LOCAL REPRESENTATIVE BY BECKO NING THEM ON THE BASIS OF WHOSOEVER IS AVAILABLE AT A POINT IN TIME AT THE DEPOT/GODOWN. IT WAS FURTHER SUBMITTED THAT THERE IS NO CONTRACT WITH ANY LABOUR CONTRACTOR WHICH HAS BEEN ENTERED BY THE ASSESSEE A S THERE IS NO PREDICTABILITY AS TO THE VOLUME OF TRANSACTIONS THA T SHALL TAKE PLACE IN A MONTH OR DURING THE BEER SEASON AND THE CONSIGNMENT S THAT IS NEEDED AT ANY DEPOT IS DECIDED BY THE BUYER I.E. BSBCL/RSB CL AND NOT THE ASSESSEE. IT WAS ACCORDINGLY SUBMITTED THAT THERE I S NO POSSIBILITY OF ANY ITA NO. 964 /JP/2017 M/S MOUNT SHIVALIK INDUSTRIES LTD. VS. CIT 3 CONTRACT WITH ANYONE IN THE ABSENCE OF PREDICTABLE DATE, TIME AND VOLUME AND IN ABSENCE OF ANY CONTRACT, THERE WAS NO LIABILITY TO DEDUCT TDS U/S 194 AND HENCE, THE PROVISIONS OF SECTION 40 (A)(IA) ARE NOT APPLICABLE AND HAVE BEEN WRONGLY INVOKED BY THE AO AND SUSTAINED BY THE LD CIT(A). FURTHER, RELIANCE WAS PLACED ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN CASE OF PR. CIT VS. SWASTIK CONSTRUTION (2018) 254 TAXMAN 163. 4. THE LD. DR IS HEARD. IT WAS SUBMITTED BY THE LD DR THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS EXAMINED THE MATTER RELATING TO LABOUR AND PROCESSI NG CHARGES AMOUNTING TO RS. 42,86,372/- AND A SHOW CAUSE WAS I SSUED TO THE ASSESSEE TO EXPLAINED AS TO WHY NO TDS HAS BEEN MAD E ON SUCH PAYMENTS AND IN RESPONSE, THE ASSESSEE SUBMITTED TH AT UNLOADING CHARGES ARE PAID AT OUTSTATION LOCATIONS AND DEPOTS OF RSBCL WHICH ARE PAID TO THE WORKERS ENGAGED FOR UNLOADING THE CONSI GNMENT FROM THE TRUCKS TO THE WAREHOUSES/DEPOTS OF THE RSBCL OR BSB CL. IT WAS FURTHER SUBMITTED THAT EVERY TIME, DIFFERENT PERSONS ARE EN GAGED WHO ARRANGE 5 OR 6 LABOUERS WHO UNLOAD THE TRUCKS. THE ASSESSI NG OFFICER HELD THAT THE ASSESSEE HAS MADE PAYMENT FOR SUPPLY OF LABOURS FOR CARRYING OUT THE WORK AND THEREFORE, THE PROVISIONS OF SECTION 1 94C ARE APPLICABLE. FURTHER, THE ASSESSING OFFICER REFERRED TO THE PAYM ENTS MADE TO CERTAIN PERSONS ON 30.06.2012 FOR UNLOADING THE CONSIGNMENT AT WAREHOUSE IN PATNA AND HELD THAT PRACTICALLY IT IS IMPOSSIBLE TH AT THROUGHOUT THE YEAR UNDER CONSIDERATION, NO PERSON WAS REPEATED OR THE SAME PERSON HAS NOT RECEIVED THE WORK CONTRACT TWICE AND ACCORDINGL Y HELD THAT THE ASSESSEE HAS DELIBERATELY MENTIONED THE FACT THAT N O PERSON WAS ITA NO. 964 /JP/2017 M/S MOUNT SHIVALIK INDUSTRIES LTD. VS. CIT 4 REPEATED TO DECEIVE THE INCOME TAX AUTHORITIES FOR NOT INVOKING THE SECTION 194C OF IT ACT. THE ASSESSING OFFICER FURTH ER HELD THAT THE ASSESSEE FAILED TO SUBMIT COMPLETE LEDGER OF THE EX PENSES INCURRED FOR UNLOADING CHARGES AND IN ABSENCE OF THE COMPLETE DE TAILS, IT IS NOT POSSIBLE TO VERIFY THAT THE PAYMENTS WERE NOT MADE IN EXCESS OF RS. 30,000/-. FURTHER, THE ASSESSING OFFICER HAS HELD T HAT THE ASSESSEE SUBMITTED SELF-MADE VOUCHERS FOR WHICH PAYMENTS WER E MADE IN CASH. THE ASSESSING OFFICER ACCORDINGLY HELD THAT THE ASS ESSEE WAS REQUIRED DEDUCT TDS ON THESE PAYMENTS WHICH WERE COVERED U/S 194C OF IT ACT AND SINCE THE ASSESSEE HAS FAILED TO DO SO, THEREFO RE, AS AMOUNT OF RS. 42,86,372/- WAS DISALLOWED U/S 40(A)(IA) OF THE ACT . FURTHER, THE LD DR DRAWN OUR REFERENCE TO THE FINDING OF THE LD. CIT(A ) WHEREIN HE HAS HELD THAT THE ASSESSEE HAS NOT MAINTAINED ANY RECORD OF NAMES OF LABOURERS/WORKERS AND THE DETAILS OF VOUCHERS OF PA YMENTS ETC. AND FURTHER GIVEN THE DETAILED REASONING BY THE ASSESSI NG OFFICER, HE HAS UPHELD THE DISALLOWANCE OF RS. 42,86,372/-. HE ACC ORDINGLY SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE FACT THAT TH E PAYMENT HAS BEEN MADE BY THE ASSESSEE BY WAY OF UNLOADING CHARGES AT VARIOUS LOCATIONS/DEPOTS OF ITS CUSTOMERS AND THEREFORE, TH E EXPENSES HAVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS HAVE NOT BEEN DISPUTED BY THE ASSESSING OFFICER. THE ONLY DISPUTE RELATES TO NON-DEDUCTION OF TDS U/S 194C OF THE ACT AND CONSEQUENTIAL DISALLOWANCE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE ASS ESSEE HAS CONTENDED THAT IT HAS HIRED SPOT LABOURERS FOR UNLOADING OF B EER CASES AT THE ITA NO. 964 /JP/2017 M/S MOUNT SHIVALIK INDUSTRIES LTD. VS. CIT 5 VARIOUS DEPOTS/STATIONS. IT WAS SUBMITTED THAT THE RESPONSIBILITY TO TRANSPORT THE BEER CASES FROM THE ASSESSEES PREMIS ES TO THE DEPOTS/GODOWNS THROUGH THE TRANSPORTERS DID NOT REQ UIRE THE LATTER TO ENGAGE THE UNLOADING LABOURERS. IT WAS FURTHER SUBM ITTED THAT THERE IS NO CONTRACT WITH ANY LABOUR CONTRACTOR WHICH HAS BE EN ENTERED BY THE ASSESSEE AS THERE IS NO PREDICTABILITY AS TO THE VO LUME OF TRANSACTIONS THAT SHALL TAKE PLACE IN A MONTH OR DURING THE BEER SEASON AND THE CONSIGNMENTS THAT IS NEEDED AT ANY DEPOT IS DECIDED BY THE BUYER I.E. BSBCL/RSBCL AND NOT THE ASSESSEE. IT WAS ACCORDINGL Y SUBMITTED THAT IN ABSENCE OF ANY CONTRACT, THERE WAS NO LIABILITY TO DEDUCT TDS U/S 194 AND HENCE, THE PROVISIONS OF SECTION 40(A)(IA) ARE NOT APPLICABLE AND HAVE BEEN WRONGLY INVOKED BY THE AO AND SUSTAINED B Y THE LD CIT(A). THE SAID SUBMISSIONS OF THE ASSESSEE THOUGH PRIMA F ACIE LOOK ATTRACTIVE, HOWEVER, NOTHING HAVE BEEN BROUGHT ON RECORD IN ORD ER TO SUBSTANTIATE SUCH CONTENTIONS. ONCE THE ASSESSING OFFICER HAS FORMED A PRIMA FACIE VIEW THAT THE PAYMENTS ARE LIABLE FOR TDS AND ISSUE D A SHOW CAUSE TO THE ASSESSEE TO JUSTIFY THE NON-DEDUCTION OF TDS, T HE ONUS IS ON THE ASSESSEE TO SUBMIT THE NECESSARY DETAILS AND DOCUME NTATION AND JUSTIFY THE BASIS FOR NON-DEDUCTION OF TDS. THE ASSESSEE SH OULD HAVE SUBMITTED COMPLETE DETAILS OF PERSONS TO WHOM THE P AYMENT HAS BEEN MADE, PLACE OF RENDERING THE SERVICES AND THE AMOUN T OF PAYMENT. HOWEVER, WE FIND THAT IN THE PRESENT CASE, THE ASSE SSEE HAS FAILED TO SUBMIT THE NECESSARY INFORMATION AND DOCUMENTATION THROUGH WHICH IT CAN BE SUBSTANTIATED THAT THE PAYMENTS FOR UNLOADIN G CHARGES DOESNT REQUIRE TDS U/S 194C OF THE ACT. SIMILAR FINDINGS H AVE BEEN RECORDED BY THE LD CIT(A) WHICH REMAIN UNREBUTTED BEFORE US. E VEN DURING THE COURSE OF HEARING, NOTHING HAS BEEN FILED WHICH COU LD HAVE ITA NO. 964 /JP/2017 M/S MOUNT SHIVALIK INDUSTRIES LTD. VS. CIT 6 SUBSTANTIATED THE CONTENTIONS SO ADVANCED BY THE LD AR. FURTHER, WE FIND THAT IN CASE OF PR. CIT VS. SWASTIK CONSTRUCTI ON (SUPRA), ALL THE RELEVANT FACTS OF THE CASE WERE ON RECORD AND BASIS WHICH THE HONBLE HIGH COURT HAS DECIDED THE MATTER IN FAVOUR OF THE ASSESSEE, HOWEVER, IN THE INSTANT CASE, THE ASSESSEE HAS FAILED TO PRO DUCE THE RELEVANT MATERIAL ON RECORD AND THEREFORE, THE SAID DECISION DOES NOT SUPPORT THE CASE OF THE ASSESSEE. WE ACCORDINGLY DO NOT SEE ANY INFIRMITY IN THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE ACTION O F THE AO IN MAKING DISALLOWANCE OF RS. 42,86,372/- BY INVOKING PROVISI ONS OF SECTION 40(A)(IA) OF THE ACT. IN THE RESULT, GROUND NO. 1 O F THE ASSESSES APPEAL IS DISMISSED. 6. IN GROUND NOS. 2 AND 4, THE ASSESSEE HAS CHALLEN GED THE DISALLOWANCE OF RS. 15,29,193 AND RS. 18,04,847/- O N ACCOUNT OF TRAVELLING AND MISC. EXPANSES RESPECTIVELY. IN THIS REGARD, THE LD. CIT HAS RECORDED A FINDING THAT THE ASSESSEE HAS FAILED TO PROVIDE SUPPORTING DOCUMENTS TO PROVE THAT SUCH EXPENDITURE S ARE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSION. WE DO NOT SEE ANY INFIRMITY IN THE SAID FINDING OF THE LD . CIT(A) AS THE ONUS IS CLEARLY ON THE ASSESSEE TO DEMONSTRATE THROUGH VERI FIABLE EVIDENCE AND DOCUMENTATION THAT THE EXPENSES HAVE BEEN INCURRED FOR THE PURPOSES OF BUSINESS. BOTH THE GROUNDS OF APPEAL ARE THUS D ISMISSED. 7. IN GROUND NO. 3, THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS. 12,82,160/- ON ACCOUNT OF INTEREST RECEIVED ON INCOME TAX REFUNDS. THE LD. AR SUBMITTED THAT THE ASSESSEE OFFERED THE INTEREST ON INCOME TAX REFUND IN THE PREVIOUS YEAR AND OUR REFERENCE W AS DRAWN TO THE ITA NO. 964 /JP/2017 M/S MOUNT SHIVALIK INDUSTRIES LTD. VS. CIT 7 NOTES TO THE FINANCIAL STATEMENTS FOR F.Y. 31.03.20 12 WHEREIN THE ASSESSEE HAS SHOWN THE AMOUNT OF RS. 12,64,144/- AS INTEREST OF INCOME TAX REFUND CLASSIFIED UNDER THE HEAD INTERE ST INCOME. IT IS THEREFORE NOT DISPUTED THAT THE ASSESSEE HAS SHOWN THE AMOUNT OF INCOME INTEREST IN ITS FINANCIAL STATEMENTS, HOWEVE R THE QUESTION IS WHETHER THE SAME HAS BEEN OFFERED TO TAX WHILE FILI NG THE RETURN OF INCOME OR NOT. ON PERUSAL OF THE ORDER OF THE ASSE SSING OFFICER AS WELL AS LD. CIT(A), WE FIND THAT THERE ARE CERTAIN DETAI LS REGARDING RECEIPT OF REFUND OF INCOME TAX AND INTEREST ON THE INCOME TAX REFUNDS, HOWEVER, THE FIGURES ARE APPARENTLY NOT MATCHING. THE FACT THAT INTEREST ON INCOME TAX REFUND WAS GRANTED TO THE ASSESSEE AND W HETHER THE ASSESSEE HAS OFFERED THE SAME TO TAX IN THE PREVIOU S YEARS IS A MATTER OF RECORD WHICH CAN BE EASILY VERIFIED, THE MATTER IS ACCORDINGLY SET ASIDE TO THE FILE OF THE ASSESSING OFFICER TO VERIF Y THE SAME AND DECIDED AS PER LAW. IN THE RESULT THE GROUND OF APPEAL IS A LLOWED FOR STATISTICAL PURPOSES. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11/11/2019. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 11/11/2019. ITA NO. 964 /JP/2017 M/S MOUNT SHIVALIK INDUSTRIES LTD. VS. CIT 8 * SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S MOUNT SHIVALIK INDUSTRIES LTD., ALWAR. 2. IZR;FKHZ@ THE RESPONDENT- CIT, CRILE-2, ALWAR.. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 964/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR