M/s. Baba Glass, Murshidabad v. ITO, Ward -1 , Murshidabad, Murshidabad

ITA 1330/KOL/2011 | 2006-2007
Pronouncement Date: 29-02-2012 | Result: Partly Allowed

Appeal Details

RSA Number 133023514 RSA 2011
Assessee PAN AAFFB4925Q
Bench Kolkata
Appeal Number ITA 1330/KOL/2011
Duration Of Justice 4 month(s) 18 day(s)
Appellant M/s. Baba Glass, Murshidabad
Respondent ITO, Ward -1 , Murshidabad, Murshidabad
Appeal Type Income Tax Appeal
Pronouncement Date 29-02-2012
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 29-02-2012
Assessment Year 2006-2007
Appeal Filed On 11-10-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE ! ! ! ! /AND ' #!' ' #!' ' #!' ' #!' ) [BEFORE SHRI PRAMOD KUMAR AM & SHRI MAHAVIR SINGH JM] !$ !$ !$ !$ / I.T.A NO. 1330/KOL/2011 #%& '( #%& '( #%& '( #%& '(/ // / ASSESSMENT YEAR : 2006-07 M/S. BABA GLASS VS. INCOME-TAX OFFICER WD-1 MURSHIDABAD (PAN:AAFFB 4925 Q) (*+ /APPELLANT ) ( *+/ RESPONDENT ) FOR THE APPELLANT: SHRI K. C. KUNDU FOR THE RESPONDENT: SHRI AMITABHA ROY DATE OF HEARING: 15.02.2012 DATE OF PRONOUNCEMENT: 29.02.2012 - / ORDER PER MAHAVIR SINGH JM ( ' #!' ' #!' ' #!' ' #!' ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXXVI KOLKATA IN APPEAL NO.506/CIT(A)-XXXVI/KOL/WD.1 MSD/08-09 DATED 01.09. 2011. ASSESSMENT WAS FRAMED BY ITO WD-1 MURSHIDABAD U/S. 143(3) OF THE INCOME TA X ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2006-07 VIDE HIS ORD ER DATED 29.12.2008. 2. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS A GAINST THE ORDER OF CIT(A) CONFIRMING THE ADDITION OF EXCESS RENT OF RS.43 800/-. FOR THIS THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPEAL: 2. FOR THAT ON THE FACTS OF THE CASE THE LD. A.O. AND CIT(A) WAS WRONG IN ADDITION ON ACCOUNT OF RENT RS.43 800/-. 3. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSING OFFICER NOTED THAT THE ASSESSEE IS PAYING RENT @ RS.3500/- PER MONTH AND HENCE HE ALLOWED A SUM OF RS.42 000/- A S EXPENDITURE INCURRED FOR RENT AS AGAINST THE CLAIM OF THE ASSESSEE DEBITING RENT AT RS.85 80 0/-. THE CIT(A) ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER AS HE HAS NOT ACCEPTED THE R ENT RECEIPT SHOWING MONTH-WISE RENT PAYMENT OF RS.2 650/- AND RS.1 000/- FOR MOGRA AND UMARPUR GODOWNS RESPECTIVELY. BEFORE US ALSO THE ASSESSEE PRODUCED COPIES OF BILLS AND DETAILS OF RE NT FOR GODOWNS SITUATED AT G. T. ROAD HUSSANABAD MOGRA HOOGHLY AND FOR THIS GODOWN ASSE SSEE HAS PAID A SUM OF RS.31 800/- AND 2 ITA 1330/K/2011 BABA GLASS A.Y. 06-07 FOR UMARPUR GODOWN IT HAS PAID A SUM OF RS.12 000/- . FROM THE DOCUMENTS AND EVIDENCE PLACED BEFORE US WE FIND THAT THE ASSESSEE HAS PAI D RENT FOR THESE TWO GODOWNS. THESE FACTS WERE ALSO NARRATED BEFORE THE CIT(A) BY THE ASSESSE E. IN VIEW OF THESE FACTS AND CIRCUMSTANCES WE ARE OF THE VIEW THAT THE ASSESSEE HAS PAID RENT AND NO DISALLOWANCE ON THIS ACCOUNT CAN BE MADE. WE DELETE THE DISALLOWANCE AND ALLOW THIS IS SUE OF ASSESSEES APPEAL. 4. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE OF LORRY EXPENSES AT RS.24 622/- BEING 25% DISALLOWANCE OF RS.98 489/- IN THE ABSENCE OF SUPPORTING VOUCHERS. FOR THIS ASSESSEE HAS RAISED FOLLOWING GROUND: 3. FOR THAT ON THE FACTS OF THE CASE THE LD. A.O. DISALLOWED LORRY EXPENSES RS.24 622/- DIMINISHED TO RS.9 849/- BY THE LD. CIT(A) IS COMPL ETELY ARBITRARY UNJUSTIFIED AND ILLEGAL. 5. AFTER HEARING RIVAL SUBMISSIONS AND GOING THROUG H THE FACTS ON RECORD WE ARE OF THE VIEW THAT DISALLOWANCE OF 25% IS EXCESSIVE. HENCE WE RESTRICT THE DISALLOWANCE AT 10% AND DIRECT THE ASSESSING OFFICER ACCORDINGLY. 6. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE OF CARRIAGE EXPENSES I.E. TRANSPORT CH ARGES BY ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AS THE A SSESSEE FAILED TO DEDUCT TDS U/S. 194C OF THE ACT. FOR THIS ASSESSEE HAS RAISED FOLLOWING GROUN D: 4. FOR THAT ON THE FACTS OF THE CASE THE LD. A.O. A ND CIT(A) WERE WRONG IN DISALLOWANCES OF CARRIAGE U/S. 40(A)(IA) RS.8 07 811/- WHICH IS C OMPLETELY UNJUSTIFIED ILLEGAL AND ARBITRARY. 7. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSING OFFICER MADE A DISALLOWA NCE ONLY ON ONE PREMISE THAT AS PER AUDIT REPORT FORM NO. 3CD ASSESSEE HAS MENTIONED THAT NO TDS WAS DEDUCTED UNDER CHAPTER XVIIB OF THE ACT. SINCE TDS WAS NOT DEDUCTED ASSESSING O FFICER MADE DISALLOWANCE OF TRANSPORT CHARGES PAID TO VARIOUS PARTIES EXCEEDING RS.50 000 /- PER ANNUM AT RS.7 38 246/-. THE CIT(A) ALSO CONFIRMED THE ACTION OF ASSESSING OFFICER STAT ING THAT ON VERIFICATION OF LIST DETAILING DATE WISE DRIVER WISE AND TRUCK WISE PAYMENT THERE IS REFLECTION OF THE TRANSPORTER WISE PAYMENT REFERRED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND THE ASSESSEE FAILED TO FILE NECESSARY EVIDENCE IN SUPPORT OF HIS CLAIM THAT THE PAYMENTS WERE ACTUALLY MADE TO THE DRIVERS AND NOT TO TRANSPORTERS. BRIEF FACTS ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF WHOLESALE AND RETAIL OF CROCKERY AND PO RCELAIN SUCH AS CUP SAUCER JAR BUCKETS ETC. 3 ITA 1330/K/2011 BABA GLASS A.Y. 06-07 IMPORTING FROM OTHER STATES DURING THE RELEVANT YEA R. BEFORE US IT WAS CONTENDED THAT FREIGHT CHARGES WERE PAID WITHOUT ANY CONTRACT OR SUB-CONTR ACT AND THEREFORE THE ASSESSEE IS NOT LIABLE TO TDS U/S. 194C OF THE ACT. ACCORDING TO ASSESSEE IT PURCHASES GLASS AND CROCKERY MATERIAL FOR RESALE FROM SUPPLIERS RESIDING AT DIFFERENT PLA CES AND WITH THESE SUPPLIERS THE ARRANGEMENT IS THAT GOODS SUPPLIED WILL BE DELIVERED AT THE SELLIN G POINT OF THE ASSESSEE. ACCORDING TO ASSESSEE FREIGHT CHARGES ARE TO BE PAID BY ASSESSEE ON PRODU CTION OF BILL AND IN NO CASE ASSESSEE ENTERED INTO ANY WRITTEN VERBAL OR OTHER CONTRACT FOR PAYM ENT OF THESE TRANSPORT CHARGES. ACCORDING TO ASSESSEE AND AS DOCUMENTS PRODUCED BEFORE US IN SUP PORT OF EXPENSES I.E. CARRIAGE INWARD STATEMENT OF PAYMENTS MADE TO SEVERAL TRUCK OPERATO RS IN SEVERAL TIMES NOT EXCEEDING RS.20 000/- AT A TIME AND NOT EXCEEDING RS.50 000/- IN A YEAR CLEARLY REVEALS THAT ALL PAYMENTS ARE MADE TO TRUCK DRIVERS AND NO PAYMENT IS MADE TO TRANSPORTERS. ONCE THIS IS FACT WE ARE OF THE VIEW THAT THE ASSESSEE IS NOT LIABLE TO DEDUCT TDS U/S. 194C OF THE ACT AND ONCE ASSESSEE IS NOT LIABLE TO DEDUCT TDS THE ASSESSING OFFICER CANN OT INVOKE THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT FOR MAKING DISALLOWANCE OF TRANSPORTATIO N CHARGES. IN VIEW OF THE ABOVE FACTS WE ALLOW THE CLAIM OF ASSESSEE. THIS VIEW OF OURS IS SUPPORTED BY THE DECISION IN THE CASE OF CIT VS. UNITED RICE LAND LTD. REPORTED IN (2008) 174 TA XMAN 286 (P&H) WHEREIN IT HAS HELD AS UNDER: SECTION 194C OF THE INCOME TAX ACT 1961 DEDUCTI ON OF TAX AT SOURCE CONTRACTORS/SUB-CONTRACTORS PAYMENTS TO ASSESSEE COMPANY WAS ENGAGED IN BUSINESS OF MANUFACTURE AND EXPORT OF RICE DURING COURSE OF E XPORT ACTIVITY IT TRANSPORTED RICE FROM ITS PLACE OF BUSINESS TO PORT BY ENGAGING TRUC KS THROUGH TRANSPORTERS FREIGHT CHARGES WERE PAID BY ASSESSEE DIRECTLY TO TRUCK OWN ERS/OPERATORS OR THROUGH TRANSPORTERS THERE WAS NO ORAL OR WRITTEN CONTRACT BETWEEN ASS ESSEE AND TRANSPORTERS WHETHER ON FACTS ASSESEE WAS LIABLE TO DEDUCT TAX AT SOURCE O N FREIGHT CHARGES PAID TO TRUCK OWNERS/OPERATORS HELD NO. IN VIEW OF ABOVE WE ALLOW THIS GROUND OF APPEAL OF ASSESSEE. 8. IN THE RESULT APPEAL OF ASSESSEE IS PARTLY ALLO WED. 9. ORDER PRONOUNCED IN OPEN COURT ON 29.02.2012 SD/- SD/- ' ' ' ' #!' #!' #!' #!' (PRAMOD KUMAR) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( . . . .) )) ) DATED : 29TH FEBRUARY 2012 /0 #%12 #3 JD.(SR.P.S.) 4 ITA 1330/K/2011 BABA GLASS A.Y. 06-07 - 4 ##5 65'7- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT M/S. BABA GLASS UMARPURMORE GHORSALA MURSHIDABAD PIN-742229. 2 *+ / RESPONDENT ITO WARD-1 MURSHIDABAD. 3 . #-% ( )/ THE CIT(A) KOLKATA 4. #-% / CIT KOLKATA 5 . >#? #% / DR KOLKATA BENCHES KOLKATA 5 #/ TRUE COPY -%/ BY ORDER ' !2 /ASSTT. REGISTRAR .