Shree Abhi Sankar Mohalanobish, Siliguri v. DCIT, Circle - 1, Siliguri, Siliguri

ITA 1389/KOL/2009 | 2006-2007
Pronouncement Date: 05-03-2010

Appeal Details

RSA Number 138923514 RSA 2009
Assessee PAN ADZPM8545N
Bench Kolkata
Appeal Number ITA 1389/KOL/2009
Duration Of Justice 6 month(s) 24 day(s)
Appellant Shree Abhi Sankar Mohalanobish, Siliguri
Respondent DCIT, Circle - 1, Siliguri, Siliguri
Appeal Type Income Tax Appeal
Pronouncement Date 05-03-2010
Appeal Filed By Assessee
Bench Allotted B
Tribunal Order Date 05-03-2010
Assessment Year 2006-2007
Appeal Filed On 12-08-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : KOLKATA [ BEFORE SHRI B.R.MITTAL HONBLE J.M. & SHRI C. D. RAO HONBLE A.M .] I.T.A.NO. 1389 (KOL) OF 2009 : ASSESSMENT YE AR 2006-07 SHRI ABHI SANKAR MOHALANOBISH SILIGURI -VS- DCIT CIRCLE-1 SILIGURI [APPELLANT] (PAN: ADZPM 8545N ) [RESPONDENT] APPELLANT BY : SHRI S.M.SURANA RESPONDENT BY : SHRI S. BARA O R D E R O R D E R O R D E R O R D E R PER SHRI C.D.RAO A.M . THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE C.I.T.(A) SILIGURI DATED 12.05.2009 FOR THE ASSESSMENT YEAR 2006-07. 2. AT THE TIME OF HEARING OF THE APPEAL BEFORE US THOUGH THE ASSESSEE HAS RAISED AS MANY AS SEVEN GROUNDS THE LD. COUNSEL APPEARING O N BEHALF OF THE ASSESSEE HAS STRESSED UPON THE ISSUE WITH REGARD TO THE FACTS AN D CIRCUMSTANCES OF THE CASE THE PROVISIONS OF SECTION 194C ARE NOT APPLICABLE ON TH E ASSESSEE. 3. BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE A SSESSEE IS THE PROPRIETOR OF M/S. HIMALAYAN COACH WORKS AND THE UNIT IS REGISTERED AS A SMALL SCALE INDUSTRY. THE AO STATED THAT THE UNIT CARRIED OUT THE FABRICATION OF THE BODIES OF BUSES TRUCKS ETC. FROM THE LEDGER OF THE UNIT THE AO FOUND THAT FOR THE P ERIOD 01.04.2005 TO 31.03.2006 THE ASSESSEE HAD MADE VARIOUS PAYMENTS ON VARIOUS DATES TO M/S. CALCUTTA MOTOR TAILORS AMOUNTING TO RS.5 97 271/-. THOUGH THE VALUE OF EAC H SINGLE PAYMENT IN MOST CASES WAS LESS THAN RS.20 000/- THE CONSOLIDATED PAYMENT S WERE ABOVE RS.50 000/- I.E. RS.5 97 271/- DURING THE YEAR. IT WAS CONTRACTUAL P AYMENT LIABLE TO DEDUCTION OF TAX AT SOURCE U/S.194C. THERE WAS A NOTE ON VENDED OUT JOB S AS APPEARED IN THE AUDITED ACCOUNTS OF THE ASSESSEE. 2 4. IN APPEAL THE LD. CIT(A) HAS CONFIRMED THE ACTI ON OF THE ASSESSING OFFICER. 5. AT THE TIME OF HEARING BEFORE US THE LD. COUNSE L FOR THE ASSESSEE HAS REITERATED THE SUBMISSIONS MADE BEFORE THE REVENUE AUTHORITIES AND FURTHER CONTENDED THAT THE PROVISIONS OF SECTION 194C ARE NOT AT ALL APPLICABLE TO THE PRESENT FACTS OF THE ASSESSEE FIRSTLY BECAUSE THE ASSESSEE IS NOT A CO NTRACTOR AND SECONDLY THE JOBS ENTRUSTED BY THE ASSESSEE TO THE JOB WORKERS HAS TO BE TREATED AS A SUB-CONTRACT ON PRESUMPTIONS AND ASSUMPTIONS. THE PROVISION OF SECT ION 194C IS CLEAR THAT WHEN THE ASSESSEE IS A CONTRACTOR THEN THE DEDUCTION OF TDS FROM THE SUB-CONTRACTORS WILL ARISE WHEREAS IN THE PRESENT CASE SINCE THE ASSESSEE IS N OT AT ALL A CONTRACTOR THE PROVISION OF SECTION 194C IS NOT ATTRACTED AND THE ACTION TAK EN BY THE REVENUE IS NOT IN ACCORDANCE WITH LAW. HE FURTHER RELIED ON THE TRIBU NALS ORDER IN THE CASE OF ANDHRA PRADESH STATE ROAD TRANSPORT CORPORATION VS- DCIT REPORTED IN 74 TTJ (HYD) 531 AND CONTENDED THAT THE PRESENT FACTS OF THE ASSESSE E ARE IDENTICAL THAN THE ONE DECIDED BY THE HYDERABAD BENCH OF THE ITAT. THEREFORE HE R EQUESTED THAT THE ASSESSEE IS NOT AT ALL A DEFAULTER IN MAKING THE TDS FROM THESE JOB WORKS. THEREFORE HE REQUESTED TO SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES BY ALLOWING THE APPEAL OF THE ASSESSEE. 6. ON THE OTHER HAND THE LD. D.R. APPEARING ON BE HALF OF THE REVENUE HEAVILY RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES AND FURTHER EMPHASIZED THAT THE ASSESSEE FIRM IN SOME CASES DUE TO INFRASTRUCTURAL INADEQUAC IES WERE UNABLE TO COMPLETE THE JOBS AND LET THEM OUT TO THIRD PARTIES. THUS IT IS REVEALED THAT THE EXPENDITURE UNDER THE HEAD VENDED OUT JOBS ARE THE PAYMENTS TO SUB- CONTRACTORS WHICH ARE LIABLE FOR DEDUCTION OF TAX AT SOURCE UNDER SECTION 194C OF TH E ACT. THEREFORE THE ACTION OF THE REVENUE AUTHORITIES IS JUSTIFIABLE. 7. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF THE MATERIALS AVAILABLE ON RECORD IT IS OBSERVED THAT FROM THE M ATERIALS AVAILABLE ON RECORD THE REVENUE HAS NOT BROUGHT ANY MATERIAL TO THE EFFECT THAT THE ASSESSEE IS A CONTRACTOR AND THE ASSESSEE IS UNDERTAKING THE JOB OF FABRICATION OF THE BODIES OF BUSES TRUCKS ETC. ON THE OTHER HAND THE ASSESSEES CONTENTION IS THAT T HE ASSESSEE IS A LEADER IN BODY 3 BUILDING AND THE OWNERSHIP OF THE BODY BUILDING LIE S WITH THE ASSESSEE TILL THESE WORKS ARE SOLD TO THE PARTIES. THEREFORE THE ASSESSEE CA NNOT BE TREATED AS A JOB WORK CONTRACTOR AND THE GETTING OF THE PART OF THE WORKS DONE BY THE THIRD PARTIES CANNOT BE TREATED AS SUB-CONTRACT. UNDER THESE FACTS AND CIRC UMSTANCES OF THE CASE WE ARE OF THE CONSIDERED OPINION THAT THE PROVISIONS OF SECTION 1 94C ARE NOT APPLICABLE. THEREFORE WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES AND DIRECT THE AO NOT TO INVOKE THE PROVISIONS OF SECTION 40(A)(IA) OF THE I.T.ACT. 8. IN THE RESULT THE ASSESSEES APPEAL IS ALLOWED . ORDER IS PRONOUNCED IN THE COURT ON 05.03.10. SD/- SD/- [B.R.MITTAL] [C.D.RAO] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 05-03-2010 COPY FORWARDED TO : 1. SHRI ABHI SANKAR MOHALANOBISH C/O- LATE DEBI SANKA R 2 ND MILE SEVOKE ROAD SILIGURI 2. DCIT CIRCLE-1 SILIGURI 3. CIT(APPEAL) KOLKATA 4. CIT KOLKATA 5. D.R. ITAT KOLKATA. TRUE COPY BY ORDER DY. REGISTRAR ITAT KOLKATA MST