The DCIT, Circle-9,, Ahmedabad v. M/s. Kataria Movers, Ahmedabad

ITA 1988/AHD/2012 | 2005-2006
Pronouncement Date: 06-10-2016 | Result: Dismissed

Appeal Details

RSA Number 198820514 RSA 2012
Assessee PAN AAEFK1481D
Bench Ahmedabad
Appeal Number ITA 1988/AHD/2012
Duration Of Justice 4 year(s) 1 month(s)
Appellant The DCIT, Circle-9,, Ahmedabad
Respondent M/s. Kataria Movers, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 06-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 06-10-2016
Date Of Final Hearing 06-09-2016
Next Hearing Date 06-09-2016
Assessment Year 2005-2006
Appeal Filed On 05-09-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI AMARJIT SINGH ACCOUNTANT MEMBER SR. NO. ITA NO. AND ASSTT.YEAR APPELLANT VS RESPONDENT 1 - 2 1988/AHD/2012 WITH CO 227/AHD/2012 A.Y.2005-2006 DCIT CIR.9 AHMEDABAD. VS. M/S.KATARIA MOVERS KATARIA PREMISES NR. PREM DARWAJA DARIAPUR AHMEDABAD. PAN : AAEFK 1481 D 3 - 4 1990/AHD/2012 WITH CO 228/AHD/2012 A.Y.2005-2006 DCIT CIR.9 AHMEDABAD. VS. M/S.KATARIA TRANSPORT KATARIA PREMISES NR. PREM DARWAJA DARIAPUR AHMEDABAD. PAN : AAIFM 5900 B 5 - 6 2004/AHD/2012 WITH CO 229/AHD/2012 A.Y.2005-2006 ITO WARD - 9(4) AHMEDABAD. VS. M/S.KATARIA LOGISTIC SERVICE KATARIA PREMISES NR. PREM DARWAJA DARIAPUR AHMEDABAD. PAN : AAEFK 6542 K REVENUE BY : SHRI JAGDISH CIT-DR ASSESSEE BY : SHRI T.P. HEMANI AR / DATE OF HEARING : 06/09/2016 / DATE OF PRONOUNCEMENT: 06/10/2016 / O R D E R PER SHRI RAJPAL YADAV JUDICIAL MEMBER IN THIS BUNCH OF SIX APPEALS COMMON ISSUES ARE INV OLVED. THEREFORE WE HEARD THEM TOGETHER AND DEEM IT APPROPRIATE TO D ISPOSE OF ALL THESE APPEALS BY THIS CONSOLIDATED ORDER. FIRST WE WILL DEAL WI TH THE APPEALS FILED BY THE REVENUE AGAINST SEPARATE ORDERS OF THE LD.CIT(A)-XV AHMEDABAD DATED 21.6.2012 PASSED ON THE RESPECTIVE APPEALS OF THE A SSESSEES. ITA NO.1988/AHD/2012 (6 APPEALS) 2 2. GROUNDS OF APPEAL TAKEN BY THE REVENUE IN ALL TH REE APPEALS ARE AS UNDER: ITA NO.1988/AHD/2012 (KATARIA MOVERS) 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF FR EIGHT EXPENSES U/S. 40(A)(IA) OF THE ACT AMOUNTING TO RS.3 39 11 223/-. 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ENHANCEMENT OF FRE IGHT EXPENSES MADE U/S. 40(A)(IA) OF THE ACT AMOUNTING TO RS.3 06 11 221/-. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV. AHMEDABAD OUGHT TO HAVE UP HELD THE ORDER OF THE ASSESSING OFFICER. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. C OMMISSIONER OF INCOME-TAX (APPEALS)-XV AHMEDABAD MAY BE SET-ASIDE AND THAT O F THE ASSESSING OFFICER BE RESTORED. ITA NO.1990/AHD/2012 (KATARIA TRANSPORT & CO.) 1) THE LD. COMMISSIONER OF INCOME-TAX (APPEAL S)-XV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF FREIGHT EXPENSES U/S. 40(A)(IA) OF THE ACT AMOUNTING TO RS. 1 65 64 178/-. 2). THE LD. COMMISSIONER OF INCOME-TAX (APPEA LS)-XV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ENHANCEMENT OF FREIGHT EXPENSES MADE U/S. 40(A)(IA) OF THE ACT AMOUNTING TO RS.2 42 15 122/-. 3) THE LD. COMMISSIONER OF INCOME-TAX (APPEAL S)-XV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF INTEREST EXPENSES U/S. 40(A)(IA) OF THE ACT AMOUNTING TO RS. 52.800/-. 4). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV AHMEDABAD OUGHT TO HAVE UP HELD THE ORDER OF THE ASSESSING OFFICER. 5). IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV AHMEDABAD MAY BE SET-ASIDE AND THAT O F THE ASSESSING OFFICER BE RESTORED. ITA NO.2004/AHD/2012 (KATARIA LOGISTICS SERVICES) 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF FR EIGHT EXPENSES U/S. 40(A)(IA) OF THE ACT AMOUNTING TO RS.1 11 73 780/- 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ENHANCEMENT OF FRE IGHT EXPENSES MADE U/S. 40(A)(IA) OF THE ACT AMOUNTING TO RS.1 65 77 280/- ITA NO.1988/AHD/2012 (6 APPEALS) 3 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV. AHMEDABAD OUGHT TO HAVE UP HELD THE ORDER OF THE ASSESSING OFFICER. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. C OMMISSIONER OF INCOME-TAX (APPEALS)-XV AHMEDABAD MAY BE SET-ASIDE AND THAT O F THE ASSESSING OFFICER BE RESTORED. 3. FACTS ON ALL VITAL POINTS ARE COMMON. FOR THE F ACILITY OF REFERENCE WE TAKE UP THE FACTS FROM ITA NO.1988/AHD/2012 I.E. IN THE CASE OF M/S.KATARIA MOVERS BECAUSE PARTIES HAVE ADVANCED THEIR ARGUMEN TS MAINLY ON THIS APPEAL. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED ITS RETURN OF INCOME ON 30.10.2015 DECLARING TOTAL INCOME AT RS.49 44 23 0/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND A SSESSMENT ORDER WAS PASSED ON 26.12.2007. THE LD.AO HAS DETERMINED THE TAXABLE INCOME OF THE ASSESSEE AT RS.4 40 99 680/- AS AGAINST RETURNED I NCOME OF RS.49 44 230/-. DISSATISFIED WITH THE ASSESSMENT ORDER THE ASSESSE E CARRIED THE MATTER IN APPEAL BEFORE THE LD.CIT(A). THE LD.CIT(A) HAS DEC IDED THE APPEAL OF THE ASSESSEE VIDE ORDER DATED 12.12.2008. THE LD.CIT(A ) HAS MADE ENHANCEMENT OF INCOME AND THE ASSESSEE CHALLENGED THE ORDER OF THE CIT(A) IN ITA NO.418/AHD/2009. THE TRIBUNAL HAS ALLOWED THE APPE AL OF THE ASSESSEE PARTLY AND SET ASIDE THE ISSUES TO THE FILE OF THE LD.CIT(A) FOR RE-ADJUDICATION VIDE ITS ORDER DATED 15.10.2010. THE LD.CIT(A) HAS RE-ADJUDICATED THE ISSUES BY WAY OF IMPUGNED ORDER PASSED ON 21.6.2012. THER E IS ONLY ONE ISSUE AGITATED BY THE REVENUE WHICH HAS TWO PARTS AS CA NVASSED IN GROUND NO.1 AND 2 WHICH ARE ONLY SUBSTANTIAL GROUNDS OF APPEAL . AT THE COST OF REPETITION WE TAKE NOTE OF THE GROUNDS NO.1 AND 2AGAIN AS UND ER: 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF FR EIGHT EXPENSES U/S. 40(A)(IA) OF THE ACT AMOUNTING TO RS.3 39 11 223/-. 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ENHANCEMENT OF FRE IGHT EXPENSES MADE U/S. 40(A)(IA) OF THE ACT AMOUNTING TO RS.3 06 11 221/-. ITA NO.1988/AHD/2012 (6 APPEALS) 4 5. BRIEF FACTS OF THE CASE WITH REGARD TO THIS ISS UE ARE THAT THE ASSESSEE HAS CARRIED OUT TRANSPORTATION BUSINESS AT BELLARY IN K ARNATAKA. IT HAS DEBITED FREIGHT CHARGES IN THE PROFIT & LOSS ACCOUNT AT RS. 27 98 77 049/-. IN THE ASSESSMENT ORDER THE LD.AO HAS OBSERVED THAT THE A SSESSEE FAILED TO DEPOSIT TDS AMOUNT DEDUCTED BY IT IN THE GOVERNMENT TREASUR Y AND ALSO FAILED TO DEDUCT TDS ON FREIGHT CHARGES PAID BY IT TO OTHER T RANSPORTERS. BEFORE THE LD.CIT(A) IN THE ORIGINAL PROCEEDINGS THE ASSESSE E HAS FIELD WRITTEN SUBMISSIONS VIDE LETTER DATED 10.11.2008. IN THIS LETTER THE ASSESSEE HAS BIFURCATED THE AMOUNTS OF FREIGHT. THIS BIFURCATIO N READS AS UNDER: ' TOTAL FREIGHT DEBITED IN PROFIT AND LOSS ACCOUNT RS. 27 98 77 049 LESS : FREIGHT ON WHICH ASSESSEE DEDUCTED TDS RS. 24 84 28 538 RS. 3 14 48 511 FREIGHT ON WHICH ASSESSEE DID NOT DEDUCTED TAX AT SOURCE IN VIEW OF THE FACT THAT THE ASSESSEE HAD NO CONTRACT WITH THE SAID TRUCK OWNERS AND PAYMENTS BEING LESS THAN RS 50 000 IN RESPECT OF INDIVIDUAL TRUCKS RS. 3 08 31 940 BALANCE FREIGHT REPRESENTING DEBIT NOTES ON ACCOUNT IF WEIGHT DIFFERENCE / CLAIMS ETC. SUBSEQUENT TO ISSUE OF LR RS. 6 16 571 SIMILARLY FREIGHT OF RS 3 08 31 940 BEING PAID LES S THAN RS. 50 000 IN RESPECT OF INDIVIDUAL TRUCKS FOR WHICH THERE WAS NO CONTRACT BY THE ASSESSEE AND RS. 6 16 571 DEBITED TO FREIGHT ACCOUN T ON ACCOUNT OF VARIOUS CLAIMS SUBSEQUENT TO ISSUE OF LR SUCH AS CL AIM ON ACCOUNT OF WEIGHT DIFFERENCE ETC. ARE NOT REQUIRED TO BE CONSI DERED FOR DISALLOWANCE U/S. 40A(IA) OF THE ACT. ONLY FREIGHT OF RS. 24 84 28 538 IS REQUIRED TO BE CONSIDERED FOR THE ALLOWABILITY OR DISALLOWABILITY U/S. 40A(IA) OF THE ACT..... 6. THE LD.CIT(A) MADE AN ANALYSIS OF SUBMISSIONS GI VEN BY THE ASSESSEE. ACCORDING TO THE LD.CIT(A) THE ASSESSEE HAS CONTEN DED THAT ONLY A SUM OF RS.24 84 28 538/- COULD HAVE CONSIDERED FOR ALLOWAB ILITY OR DISALLOWABILITY UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT 1961 . IT WAS POINTED OUT TO THE LD.CIT(A) THAT AMENDMENT CARRIED OUT IN SECTION 40( A)(IA) BY WAY OF FINANCE ACT 2008 THE FREIGHT AMOUNT ON WHICH TDS WAS DEDU CTED IN MARCH BUT WAS DEPOSITED IN GOVERNMENT ACCOUNT BEFORE THE FILING O F RETURN IS ALLOWABLE AS DEDUCTION. THUS THE ASSESSEE HAS POINTED OUT THAT IT HAS DEDUCTED TDS AND ITA NO.1988/AHD/2012 (6 APPEALS) 5 DEPOSITED TDS AMOUNT IN THE GOVERNMENT ACCOUNT BEF ORE THE DATE OF FILING OF RETURN. THIS AMOUNT WAS QUANTIFIED BY THE ASSESSEE AT RS.21 45 17 315/-. THE LD.CIT(A) HAS DEBITED THIS AMOUNT FROM TOTAL AMOUNT ON WHICH TDS DEDUCTED BY THE ASSESSEE I.E. RS.24 84 28 538/-. IN THIS WA Y AN AMOUNT OF RS.3 39 11 223/- WAS QUANTIFIED AS DISALLOWABLE UN DER SECTION 40(A)(IA) OF THE ACT. THE LD.CIT(A) THEREAFTER HAS MADE VARIOUS D ISCUSSION ABOUT INCLUSION AND EXCLUSION OF CERTAIN AMOUNTS. IN THE FRESH ROU ND OF LITIGATION WHEN THIS AMOUNT WAS QUANTIFIED THEN THE LD.CIT(A) HAS OBSE RVED THAT VIDE FINANCE ACT 2010 CHANGES HAVE BEEN EFFECTED IN SECTION 40 (A)(IA) IN THE INCOME TAX ACT. IN THE AMENDED PROVISION IT HAS BEEN PROVIDE D THAT EVEN IF IN ANY MONTH OF THE ACCOUNTING IF EXPENDITURE WAS INCURRED TAX HAS BEEN DEDUCTED AT SOURCE AND DEPOSITED BEFORE DUE DATE OF FILING OF T HE RETURN OF INCOME NO DISALLOWANCE COULD BE MADE UNDER SECTION 40(A)(IA). DIFFERENCE BETWEEN THE POSITION OF LAW WHEN THE LD.CIT(A) HAS PASSED THE ORDER ON 12.12.2008 IN THE FIRST ROUND AND IN THE PRESENT ROUND WHEN THE CIT( A) HAS PASSED THE IMPUGNED ORDER ON 21.6.2012 IS THAT EARLIER TDS WAS DEDUCTED IN THE MONTH OF MARCH BUT WAS DEPOSITED IN THE GOVERNMENT ACCOU NT BEFORE DUE DATE OF FILING OF RETURN THEN DISALLOWANCE CANNOT BE MADE. IN OTHER WORDS EARLIER EXEMPTION WAS GRANTED FOR THE PAYMENT MADE IN THE M ONTH OF MARCH ON WHICH TDS WAS DEDUCTED. BUT AFTER 2010 IT HAS BE EN PROVIDED THAT EVEN IF TDS OF ANY MONTH IS BEING PAID BEFORE THE DUE DATE OF FILING OF RETURN THEN ALSO DISALLOWANCE UNDER SECTION 40(A)(IA) WOULD NOT BE MADE. THE LD.CIT(A) FOLLOWING THE DECISION OF THE ITAT AHMEDABAD BENCH IN THE CASE OF SHRI KANUBHAI RAMJIBHAI MAKWANA VS. ITO 44 SOT 264 (AHD ) HAS DELETED DISALLOWANCE OF RS.3 39 11 223/-. THIS DELETION HA S BEEN CHALLENGED BY THE REVENUE IN GROUND NO.1. 7. IN THE SECOND GROUND THE REVENUE HAS PLEADED TH AT THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.3 06 11 221/-. THE LD.CIT(A) IN THE FIRST ITA NO.1988/AHD/2012 (6 APPEALS) 6 ROUND OF APPEAL HAD ISSUED A NOTICE TO THE ASSESSEE INVITING ITS EXPLANATION AS TO WHY AN AMOUNT OF RS.3 14 48 511/- SHOULD NOT BE DISALLOWED UNDER SECTION 40(A)(IA) OF THE ACT. THE ASSESSEE HAS GIVEN ITS E XPLANATION WHICH WAS NOT ACCEPTED. IN THE SET ASIDE PROCEEDINGS THE ASSESS EE HAS AGAIN GIVEN ITS EXPLANATION WHICH HAS BEEN REPRODUCED BY THE LD.CI T(A) ON PAGE NO.12 OF THE IMPUGNED ORDER. WE DEEM IT APPROPRIATE TO TAKE NOTE OF THIS SUBMISSION WHICH READ AS UNDER: (7.2) (A) IN RESPECT OF GROUND RELATED TO DISA LLOWANCE U/S 40(A)(IA) OF THE ACT THE FOLLOWING DISALLOWANCE WERE MADE : SR. NO. PARTICULARS AMOUNT IN RS. 1 DISALLOWANCE MADE BY THE ID. AO CONFIRMED BY THE CIT(A) 3 39 11 223/- 2 ENHANCEMENT MADE BY YOUR HONOURS IN FIRST ROUND 3 14 48 511/- TOTAL 6 53 59 734/- (B) THE APPELLANT SUBMITTED THAT: 'SO FAR AS SR. NO. 1 I.E DISALLOWANCE OF RS. 3 39 1 1 223/- U/S 40(A)(IA) IS CONCERNED THE APPELLANT SUBMITS THAT IT IS ADMI TTED FACTS THAT THE APPELLANT HAS DEDUCTED TAX AT SOURCE HOWEVER NOT DEPOSITED WITHIN THE PRESCRIBED TIME LIMIT BUT IN ANY CASE HAS BEEN DULY DEPOSITED BEFORE THE DUE DATE OF FILING RETURN OF INCOME. PLEASE REFER P ARA 2.1 OF THE ASSESSMENT ORDER WHEREIN THE DETAILS OF TAX DEDUCTE D AT SOURCE HAS BEEN GIVEN. AS A MATTER OF FACTS THE TAX HAS BEEN DEDUCTED AT SOURCE AND HAS BEEN PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME. COPY OF THE DETAILS OF DEDUCTION OF TAX AT SOURCE O N AMOUNT OF RS.3 39 11 223/- ALONGWITH THE BANK STATEMENT SHOWI NG CLEARANCE OF AMOUNT OF IDS IS ENCLOSED HEREWITH MARKED AS 'ANNEX URE - D'. IN THIS CONNECTION THE APPELLANT FURTHER SUBMITS T HAT THE PROVISIONS OF S.40(A)(IA) HAS UNDERGONE A CHANGE BY THE FINANCE A CT 2010 WHEREBY IT HAS BEEN AMENDED IN A MANNER THAT EVEN IF FOR AN Y MONTH OF EXPENDITURE TAX HAS BEEN DEDUCTED AND DEPOSITED BE FORE THE DUE DATE OF FILING RETURN OF INCOME DISALLOWANCE CANNOT BE MADE U/S 40(A)(IA) OF THE ACT. THE APPELLANT SUBMITS THAT THIS AMENDMENT IS CURATIVE IN ITA NO.1988/AHD/2012 (6 APPEALS) 7 NATURE AND THEREFORE THE SAME IS APPLICABLE FOR THE YEAR UNDER CONSIDERATION AND ACCORDINGLY NO DISALLOWANCE CAN B E MADE IN THIS COUNT ALSO. RELIANCE IS PLACED ON THE ORDER OF JURI SDICTIONAL AHMEDABAD TRIBUNAL IN THE CASE OF SHRIKANUBHAIRAMI' IBHAIMAKWANA VS. ITO REPORTED IN 44 SOT 264 (AHD.)' 'SO FAR AS SR.NO.2 OF ABOVE TABLE I.E ENHANCEMENT O F DISALLOWANCE OF RS.3 14 48 5117-IS CONCERNED THE APPELLANT SUBMITS AS UNDER: > FREIGHT ON INDIVIDUAL TRUCKS - RS.3 08 31 940/- FOR THE YEAR UNDER CONSIDERATION THE APPELLANT HA S INCURRED FREIGHT AMOUNT OF RS.3 08 31 940/-PAID TO INDIVIDUAL TRUCKS . THE APPELLANT SUBMITS THAT AS PER THE PROVISIONS OF SUB-SECTION ( 3) OF S.194C OF THE ACT APPLICABLE TO THE YEAR UNDER CONSIDERATION THE APPELLANT WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE ON ANY SUM CREDITE D OR PAID IN PURSUANCE OF ANY CONTRACT THE CONSIDERATION OF WHIC H DOES NOT EXCEED RS.20 000/-. FOR READY REFERENCE PROVISIONS OF SUB-SECTION (3) TO SECTION 194C OF THE ACT IS REPRODUCED HEREUNDER: '(I) THE AMOUNT OF ANY SUM CREDITED OR PAID OR LIKE LY TO BE CREDITED OR PAID TO THE ACCOUNT OF OR TO THE CONTRACTOR OR SU B-CONTRACTOR IF SUCH SUM DOES NOT EXCEED TWENTY THOUSAND RUPEES' HOWEVER WITH EFFECT FROM 01/10/2004 THE LAW HAS U NDERGONE A CHANGE BY THE FINANCE ACT 2004 WHICH PROVIDES AS UNDER: '(1) THE AMOUNT OF ANY SUM CREDITED OR' PAID OR LIK ELY TO BE CREDITED OR PAID TO THE ACCOUNT OF OR TO THE CONTRACTOR OR SU B-CONTRACTOR IF SUCH SUM DOES NOT EXCEED TWENTY THOUSAND RUPEES: PROVIDED THAT WHERE THE AGGREGATE OF THE AMOUNTS OF SUCH SUMS CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID D URING THE FINANCIAL YEAR EXCEEDS FIFTY THOUSAND RUPEES THE PERSON RESP ONSIBLE FOR PAYING SUCH SUMS REFERRED TO IN SUB-SECTION (1) OR AS THE CASE MAY BE SUB- SECTION (2) SHALL BE LIABLE TO DEDUCT INCOME-TAX UN DER THIS SECTION' HENCE FROM THE ABOVE QUOTED PROVISIONS IT IS VERY MUCH CLEAR THAT THE APPELLANT WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE ON AN AMOUNT UPTO 30/09/2004 IF IMPUGNED AMOUNT DOES NOT EXCEED RS.2 0 000/- PER CONTRACT. IT IS FURTHER SUBMITTED THAT FROM 01/10/2 004 IF THE AMOUNT CREDITED OR PAID TO THE CONTRACTOR OR SUB-CONTRACTO R DOES NOT EXCEED ITA NO.1988/AHD/2012 (6 APPEALS) 8 RS.20 000/- IN SINGLE TRANSACTION AND RS.50 000/- I N AGGREGATE THAN THE APPELLANT WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE. THEREFORE THE APPELLANT HAS BIFURCATED AN AMOUNT O F RS.3 08 31 940/- IN TO TWO PERIODS VIZ. PERIOD FROM 01/04/2004 TO 30 /09/2004 AND 01/10/2004 TO 31/03/2005 WHICH IS RS.1 55 86 430/- AND RS.1 52 45 510/- RESPECTIVELY. THE APPELLANT FURTHER SUBMITS OUT OF AN AMOUNT OF R S.1 55 86 430/- FOR THE PERIOD OF 01/04/2004 TO 30/09/2004 AN AMOUNT O F RS.47 54 720/- IS PERTAINING TO AN AMOUNT WHICH IS IN EXCESS OF RS.20 000/- PER CONTRACT ON WHICH THE APPELLANT HAS NOT DEDUCTED TAX AT SOUR CE WHEREAS BALANCE AMOUNT OF RS.1 08 31 718/- IS AGGREGATE OF AN AMOUNT WHICH IS NOT EXCEEDING AN AMOUNT OF RS.20 000/- ON WHICH TAX IS NOT REQUIRED TO BE DEDUCTED AT SOURCE. COPY OF SUCH DETAILS IS ENCL OSED HEREWITH MARKED AS 'ANNEXURE - E F AND G'. SIMILARLY FOR THE PERIOD 01/10/2004 TO 31/03/2005 THE APPELLANT SUBMITS THAT OUT OF AN AMOUNT OF RS.1 52 45 510/- AN AMOUNT OF RS.1 12 54 970/- IS PERTAINING TO AGGREGATE AMOUNT WHICH IS IN EXCESS OF RS.50 000/- ON WHICH TAX IS NOT DEDUCTED AT SOUR CE WHERE THE BALANCE AMOUNT OF RS.39 09 540/- IS PERTAINING TO A GGREGATE AMOUNT WHICH IS NOT IN EXCESS OF RS.50 000/- ON WHICH THE TAX IS NOT REQUIRED TO BE DEDUCTED AT SOURCE. COPY OF SUCH DETAILS IS ENCL OSED HEREWITH MARKED AS 'ANNEXURE - H'. IN SUMMARY THE APPELLANT SUBMITS AS UNDER: PARTICULARS 01/04/2004 TO 30/09/2004 01/10/2004 TO 31/03/2005 AGGREGATE OF AN AMOUNT WHICH IS IN EXCESS OF RS.20 000/- PER CONTRACT ON WHICH TAX IS NOT DEDUCTED AT SOURCE. (PL. REFER ANNEXURE- I) 47 54 720/- --- AGGREGATE OF AN MOUNT WHICH IS IN EXCESS OF RS.50 000/- PER CONTRACTOR ON WHICH TAX IS NOT DEDUCTED AT SOURCE. (PL. REFER ANNEXURE - K) -- 1 12 54 970/- ITA NO.1988/AHD/2012 (6 APPEALS) 9 AGGREGATE OF AN AMOUNT WHICH IS NOT IN EXCESS OF RS.20 000/- PER CONTRACT ON WHICH TAX IS NOT REQUIRED TO BE DEDUCTED AT SOURCE. 1 08 21 710/- -- AGGREGATE OF AN AMOUNT WHICH IS NOT IN EXCESS OF RS.50 000/- PER CONTRACTOR ON WHICH TAX IS NOT REQUIRED TO BE DEDUCTED AT SOURCE. 39 09 540/- TOTAL 1 55 86 430/- 1 52 45 510/- BALANCE FREIGHT REPRESENTING DEBIT NOTES - RS.6 16 571/-. COPY OF DETAILS OF FREIGHT REPRESENTING DEBITS NOTE S OF RS.6 16 571/-.IS ENCLOSED HEREWITH MARKED AS 'ANNEXURE - I' ON WHIC H THE TAX IS NOT REQUIRED TO BE DEDUCTED AT SOURCE UNDER THE SCHEME OF THE ACT 8. NOW WE TAKE THE FACTS FROM ITA NO.2004/AHD/2012 IN THE CASE OF KATARIA LOGISTIC SERVICE. IN THIS CASE ALSO A TOTA L DISALLOWANCE OF RS.2 77 51 060/- WAS SOUGHT TO BE MADE UNDER SECTIO N 40(A)(IA) OF THE ACT. OUT OF THIS AMOUNT A SUM OF RS.1 65 77 280/- IS TH E AMOUNT WHICH WAS INTENDED TO BE ENHANCED BY THE LD.CIT(A) IN ITS ORD ER DATED 12.12.2008. EXPLANATION OF THE ASSESSEE IN THIS CASE ALSO REPRO DUCED BY THE LD.CIT(A) AT PAGE NO.12 IN PARA 7.12. IT READS AS UNDER: (7.2) (A) IN RESPECT OF GROUND RELATED TO DISA LLOWANCE U/S 40(A)(IA) OF THE ACT THE FOLLOWING DISALLOWANCE WERE MADE : SR. NO. PARTICULARS AMOUNT IN RS. 1 DISALLOWANCE MADE BY THE ID. AO CONFIRMED BY THE CIT(A) 1 11 73 780/- 2 ENHANCEMENT MADE BY YOUR HONOURS IN FIRST ROUND 1 65 77 280/- TOTAL 2 77 51 060/- ITA NO.1988/AHD/2012 (6 APPEALS) 10 (B) THE APPELLANT SUBMITTED THAT: 'SO FAR AS SR. NO. 1 I.E DISALLOWANCE OF RS. 1 11 7 3 780/- U/S 40(A)(IA) IS CONCERNED THE APPELLANT SUBMITS THAT IT IS ADMI TTED FACTS THAT THE APPELLANT HAS DEDUCTED TAX AT SOURCE HOWEVER NOT DEPOSITED WITHIN THE PRESCRIBED TIME LIMIT BUT IN ANY CASE HAS BEEN DULY DEPOSITED BEFORE THE DUE DATE OF FILING RETURN OF INCOME. PLEASE REFER P ARA 3 OF THE ASSESSMENT ORDER WHEREIN THE DETAILS OF TAX DEDUCTE D AT SOURCE HAS BEEN GIVEN. AS A MATTER OF FACTS THE TAX HAS BEEN DEDUCTED AT SOURCE AND HAS BEEN PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME. COPY OF THE DETAILS OF DEDUCTION OF TAX AT SOURCE O N AMOUNT OF RS. 1 11 73 780/- ALONGWITH THE BANK STATEMENT SHOWING CLEARANCE OF AMOUNT OF IDS IS ENCLOSED HEREWITH MARKED AS 'ANNEX URE - D'. IN THIS CONNECTION THE APPELLANT FURTHER SUBMITS T HAT THE PROVISIONS OF S.40(A)(IA) HAS UNDERGONE A CHANGE BY THE FINANCE A CT 2010 WHEREBY IT HAS BEEN AMENDED IN A MANNER THAT EVEN IF FOR AN Y MONTH OF EXPENDITURE TAX HAS BEEN DEDUCTED AND DEPOSITED BE FORE THE DUE DATE OF FILING RETURN OF INCOME DISALLOWANCE CANNOT BE MADE U/S 40(A)(IA) OF THE ACT. THE APPELLANT SUBMITS THAT THIS AMENDMENT IS CURATIVE IN NATURE AND THEREFORE THE SAME IS APPLICABLE FOR THE YEAR UNDER CONSIDERATION AND ACCORDINGLY NO DISALLOWANCE CAN B E MADE IN THIS COUNT ALSO. RELIANCE IS PLACED ON THE ORDER OF JURI SDICTIONAL AHMEDABAD TRIBUNAL IN THE CASE OF SHRIKANUBHAIRAMI' IBHAIMAKWANA VS. ITO REPORTED IN 44 SOT 264 (AHD.)' 'SO FAR AS SR.NO.2 OF ABOVE TABLE I.E ENHANCEMENT O F DISALLOWANCE OF RS.1 54 61 412/-IS CONCERNED THE APPELLANT SUBMITS AS UNDER: > FREIGHT ON INDIVIDUAL TRUCKS - RS.1 54 71 412/- FOR THE YEAR UNDER CONSIDERATION THE APPELLANT HA S INCURRED FREIGHT AMOUNT OF RS.1 54 61 412/- PAID TO INDIVIDUAL TRUCK S. THE APPELLANT SUBMITS THAT AS PER THE PROVISIONS OF SUB-SECTION ( 3) OF S.194C OF THE ACT APPLICABLE TO THE YEAR UNDER CONSIDERATION THE APPELLANT WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE ON ANY SUM CREDITE D OR PAID IN PURSUANCE OF ANY CONTRACT THE CONSIDERATION OF WHIC H DOES NOT EXCEED RS.20 000/-. FOR READY REFERENCE PROVISIONS OF SUB-SECTION (3) TO SECTION 194C OF THE ACT IS REPRODUCED HEREUNDER: ITA NO.1988/AHD/2012 (6 APPEALS) 11 '(I) THE AMOUNT OF ANY SUM CREDITED OR PAID OR LIKE LY TO BE CREDITED OR PAID TO THE ACCOUNT OF OR TO THE CONTRACTOR OR SU B-CONTRACTOR IF SUCH SUM DOES NOT EXCEED TWENTY THOUSAND RUPEES' HOWEVER WITH EFFECT FROM 01/10/2004 THE LAW HAS U NDERGONE A CHANGE BY THE FINANCE ACT 2004 WHICH PROVIDES AS UNDER: '(1) THE AMOUNT OF ANY SUM CREDITED OR' PAID OR LIK ELY TO BE CREDITED OR PAID TO THE ACCOUNT OF OR TO THE CONTRACTOR OR SU B-CONTRACTOR IF SUCH SUM DOES NOT EXCEED TWENTY THOUSAND RUPEES: PROVIDED THAT WHERE THE AGGREGATE OF THE AMOUNTS OF SUCH SUMS CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID D URING THE FINANCIAL YEAR EXCEEDS FIFTY THOUSAND RUPEES THE PERSON RESP ONSIBLE FOR PAYING SUCH SUMS REFERRED TO IN SUB-SECTION (1) OR AS THE CASE MAY BE SUB- SECTION (2) SHALL BE LIABLE TO DEDUCT INCOME-TAX UN DER THIS SECTION' HENCE FROM THE ABOVE QUOTED PROVISIONS IT IS VERY MUCH CLEAR THAT THE APPELLANT WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE ON AN AMOUNT UPTO 30/09/2004 IF IMPUGNED AMOUNT DOES NOT EXCEED RS.2 0 000/- PER CONTRACT. IT IS FURTHER SUBMITTED THAT FROM 01/10/2 004 IF THE AMOUNT CREDITED OR PAID TO THE CONTRACTOR OR SUB-CONTRACTO R DOES NOT EXCEED RS.20 000/- IN SINGLE TRANSACTION AND RS.50 000/- I N AGGREGATE THAN THE APPELLANT WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE. THEREFORE THE APPELLANT HAS BIFURCATED AN AMOUNT O F RS.1 54 61 412/- IN TO TWO PERIODS VIZ. PERIOD FROM 01/04/2004 TO 30 /09/2004 AND 01/10/2004 TO 31/03/2005 WHICH IS RS.41 77 926/- A ND RS.1 12 83 486/- RESPECTIVELY. THE APPELLANT FURTHER SUBMITS OUT OF AN AMOUNT OF R S.41 77 926/- FOR THE PERIOD OF 01/04/2004 TO 30/09/2004 AN AMOUNT O F RS.8 86 602/- IS PERTAINING TO AN AMOUNT WHICH IS IN EXCESS OF RS.20 000/- PER CONTRACT ON WHICH THE APPELLANT HAS NOT DEDUCTED TAX AT SOUR CE WHEREAS BALANCE AMOUNT OF RS.32 91 324/- IS AGGREGATE OF AN AMOUNT WHICH IS NOT EXCEEDING AN AMOUNT OF RS.20 000/- ON WHICH TAX IS NOT REQUIRED TO BE DEDUCTED AT SOURCE. COPY OF SUCH DETAILS IS ENCL OSED HEREWITH MARKED AS 'ANNEXURE - F G AND H'. SIMILARLY FOR THE PERIOD 01/10/2004 TO 31/03/2005 THE APPELLANT SUBMITS THAT OUT OF AN AMOUNT OF RS.1 12 83 486/- AN AMOUNT OF RS.4 18 442/- IS PERTAINING TO AGGREGATE AMOUNT WHI CH IS IN EXCESS OF RS.50 000/- ON WHICH TAX IS NOT DEDUCTED AT SOURCE WHERE THE BALANCE ITA NO.1988/AHD/2012 (6 APPEALS) 12 AMOUNT OF RS.1 08 65 044/- IS PERTAINING TO AGGREGA TE AMOUNT WHICH IS NOT IN EXCESS OF RS.50 000/- ON WHICH THE TAX IS NO T REQUIRED TO BE DEDUCTED AT SOURCE. COPY OF SUCH DETAILS IS ENCLOSE D HEREWITH MARKED AS 'ANNEXURE I AND J'. IN SUMMARY THE APPELLANT SUBMITS AS UNDER: PARTICULARS 01/04/2004 TO 30/09/2004 01/10/2004 TO 31/03/2005 AGGREGATE OF AN AMOUNT WHICH IS IN EXCESS OF RS.20 000/- PER CONTRACT ON WHICH TAX IS NOT DEDUCTED AT SOURCE. (PL. REFER ANNEXURE- I) 8 86 602/- --- AGGREGATE OF AN MOUNT WHICH IS IN EXCESS OF RS.50 000/- PER CONTRACTOR ON WHICH TAX IS NOT DEDUCTED AT SOURCE. (PL. REFER ANNEXURE - K) -- 4 18 442/- AGGREGATE OF AN AMOUNT WHICH IS NOT IN EXCESS OF RS.20 000/- PER CONTRACT ON WHICH TAX IS NOT REQUIRED TO BE DEDUCTED AT SOURCE. 32 91 324/- -- AGGREGATE OF AN AMOUNT WHICH IS NOT IN EXCESS OF RS.50 000/- PER CONTRACTOR ON WHICH TAX IS NOT REQUIRED TO BE DEDUCTED AT SOURCE. 1 08 65 044/- TOTAL 41 77 926/- 1 12 83 486/- BALANCE FREIGHT REPRESENTING DEBIT NOTES - RS.10 96 067/- ITA NO.1988/AHD/2012 (6 APPEALS) 13 COPY OF DETAILS OF FREIGHT REPRESENTING DEBITS NOTE S OF RS.10 96 067/- .IS ENCLOSED HEREWITH MARKED AS 'ANNEXURE - K' ON WHIC H THE TAX IS NOT REQUIRED TO BE DEDUCTED AT SOURCE UNDER THE SCHEME OF THE ACT 9. THE FACTS IN THE CASE OF KATARIA TRANSPORT I.E. ITA NO.1990/AHD/2012 ON THIS ISSUE CAN BE GATHERED FROM THE EXPLANATION GIVEN BY THE ASSESSEE BEFORE THE LD.CIT(A). IT READS AS UNDER: (7.2) (A) IN RESPECT OF GROUND RELATED TO DISA LLOWANCE U/S 40(A)(IA) OF THE ACT THE FOLLOWING DISALLOWANCE WERE MADE : SR. NO. PARTICULARS AMOUNT IN RS. 1 DISALLOWANCE MADE BY THE LD. AO CONFIRMED BY THE CIT(A) 1 65 64 178 2 ENHANCEMENT MADE BY YOUR HONOURS IN FIRST ROUND 2 42 15 122 TOTAL 4 07 79 300 (B) THE APPELLANT SUBMITTED THAT: 'SO FAR AS SR. NO. 1 I.E DISALLOWANCE OF RS. 1 65 6 4 178/- U/S 40(A)(IA) IS CONCERNED THE APPELLANT SUBMITS THAT IT IS ADMI TTED FACTS THAT THE APPELLANT HAS DEDUCTED TAX AT SOURCE HOWEVER NOT DEPOSITED WITHIN THE PRESCRIBED TIME LIMIT BUT IN ANY CASE HAS BEEN DULY DEPOSITED BEFORE THE DUE DATE OF FILING RETURN OF INCOME. PLEASE REFER P ARA 3 OF THE ASSESSMENT ORDER WHEREIN THE DETAILS OF TAX DEDUCTE D AT SOURCE HAS BEEN GIVEN. AS A MATTER OF FACTS THE TAX HAS BEEN DEDUCTED AT SOURCE AND HAS BEEN PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME. COPY OF THE DETAILS OF DEDUCTION OF TAX AT SOURCE O N AMOUNT OF RS. 1 65 64 178/-ALONGWITH THE BANK STATEMENT SHOWING C LEARANCE OF AMOUNT OF IDS IS ENCLOSED HEREWITH MARKED AS 'ANNEX URE - D'. IN THIS CONNECTION THE APPELLANT FURTHER SUBMITS T HAT THE PROVISIONS OF S.40(A)(IA) HAS UNDERGONE A CHANGE BY THE FINANCE A CT 2010 WHEREBY IT HAS BEEN AMENDED IN A MANNER THAT EVEN IF FOR AN Y MONTH OF EXPENDITURE TAX HAS BEEN DEDUCTED AND DEPOSITED BE FORE THE DUE DATE OF FILING RETURN OF INCOME DISALLOWANCE CANNOT BE MADE U/S 40(A)(IA) OF THE ACT. THE APPELLANT SUBMITS THAT THIS AMENDMENT IS CURATIVE IN NATURE AND THEREFORE THE SAME IS APPLICABLE FOR THE YEAR UNDER ITA NO.1988/AHD/2012 (6 APPEALS) 14 CONSIDERATION AND ACCORDINGLY NO DISALLOWANCE CAN B E MADE IN THIS COUNT ALSO. RELIANCE IS PLACED ON THE ORDER OF JURI SDICTIONAL AHMEDABAD TRIBUNAL IN THE CASE OF SHRIKANUBHAIRAMI' IBHAIMAKWANA VS. ITO REPORTED IN 44 SOT 264 (AHD.)' 'SO FAR AS SR.NO.2 OF ABOVE TABLE I.E ENHANCEMENT O F DISALLOWANCE OF RS.2 42 15 122/- IS CONCERNED THE APPELLANT SUBMITS AS UNDER: PARTICULARS AMOUNT IN RS. A) FREIGHT ON OWN TRUCKS 1 30 86 314 B) NO TDS MADE ON INDIVIDUAL TRUCKS 1 08 22 029 C) BALANCE FREIGHT REPRESENTING DEBIT NOTES 3 06 779 2 42 15 122 FREIGHT ON OWN TRUCK - RS.1 30 85 814/- UNDER THE CIRCUMSTANCES THE APPELLANT HAS UTILIZED OWN TRUCKS FOR THE PURPOSE OF TRANSPORTATION ON WHICH FREIGHT HAS BEEN PAID THEREFORE THE APPELLANT SUBMITS THAT PROVISIONS OF SECTION 19 4C CANNOT MADE APPLICABLE IN THE ABSENCE OF ANY CONTRACT WORK. COPY OF DETAILS OF FREIGHT ON OWN TRUCK ALONG WITH RC BOOK IS ENCLOSED HEREWITH MARKED AS ANNEXURE-F > FREIGHT ON INDIVIDUAL TRUCKS - RS.1 08 22 029/- FOR THE YEAR UNDER CONSIDERATION THE APPELLANT HA S INCURRED FREIGHT AMOUNT OF RS.1 08 22 029/- PAID TO INDIVIDUAL TRUCK S. THE APPELLANT SUBMITS THAT AS PER THE PROVISIONS OF SUB-SECTION ( 3) OF S.194C OF THE ACT APPLICABLE TO THE YEAR UNDER CONSIDERATION THE APPELLANT WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE ON ANY SUM CREDITE D OR PAID IN PURSUANCE OF ANY CONTRACT THE CONSIDERATION OF WHIC H DOES NOT EXCEED RS.20 000/-. FOR READY REFERENCE PROVISIONS OF SUB-SECTION (3) TO SECTION 194C OF THE ACT IS REPRODUCED HEREUNDER: '(I) THE AMOUNT OF ANY SUM CREDITED OR PAID OR LIKE LY TO BE CREDITED OR PAID TO THE ACCOUNT OF OR TO THE CONTRACTOR OR SU B-CONTRACTOR IF SUCH SUM DOES NOT EXCEED TWENTY THOUSAND RUPEES' ITA NO.1988/AHD/2012 (6 APPEALS) 15 HOWEVER WITH EFFECT FROM 01/10/2004 THE LAW HAS U NDERGONE A CHANGE BY THE FINANCE ACT 2004 WHICH PROVIDES AS UNDER: '(1) THE AMOUNT OF ANY SUM CREDITED OR' PAID OR LIK ELY TO BE CREDITED OR PAID TO THE ACCOUNT OF OR TO THE CONTRACTOR OR SU B-CONTRACTOR IF SUCH SUM DOES NOT EXCEED TWENTY THOUSAND RUPEES: PROVIDED THAT WHERE THE AGGREGATE OF THE AMOUNTS OF SUCH SUMS CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID D URING THE FINANCIAL YEAR EXCEEDS FIFTY THOUSAND RUPEES THE PERSON RESP ONSIBLE FOR PAYING SUCH SUMS REFERRED TO IN SUB-SECTION (1) OR AS THE CASE MAY BE SUB- SECTION (2) SHALL BE LIABLE TO DEDUCT INCOME-TAX UN DER THIS SECTION' HENCE FROM THE ABOVE QUOTED PROVISIONS IT IS VERY MUCH CLEAR THAT THE APPELLANT WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE ON AN AMOUNT UPTO 30/09/2004 IF IMPUGNED AMOUNT DOES NOT EXCEED RS.2 0 000/- PER CONTRACT. IT IS FURTHER SUBMITTED THAT FROM 01/10/2 004 IF THE AMOUNT CREDITED OR PAID TO THE CONTRACTOR OR SUB-CONTRACTO R DOES NOT EXCEED RS.20 000/- IN SINGLE TRANSACTION AND RS.50 000/- I N AGGREGATE THAN THE APPELLANT WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE. THEREFORE THE APPELLANT HAS BIFURCATED AN AMOUNT O F RS.1 08 22 029/- IN TO TWO PERIODS VIZ. PERIOD FROM 01/04/2004 TO 30 /09/2004 AND 01/10/2004 TO 31/03/2005 WHICH IS RS.46 73 017/- A ND RS.61 49 012/- RESPECTIVELY. THE APPELLANT FURTHER SUBMITS OUT OF AN AMOUNT OF R S.46 73 018/- FOR THE PERIOD OF 01/04/2004 TO 30/09/2004 AN AMOUNT O F RS.24 18 866/-IS PERTAINING TO AN AMOUNT WHICH IS IN EXCESS OF RS.20 000/- PER CONTRACT ON WHICH THE APPELLANT HAS NOT DEDUCTED TAX AT SOUR CE WHEREAS BALANCE AMOUNT OF RS.22 54 151/- IS AGGREGATE OF AN AMOUNT WHICH IS NOT EXCEEDING AN AMOUNT OF RS.20 000/- ON WHICH TAX IS NOT REQUIRED TO BE DEDUCTED AT SOURCE. COPY OF SUCH DETAILS IS ENCL OSED HEREWITH MARKED AS 'ANNEXURE H & I'. SIMILARLY FOR THE PERIOD 01/10/2004 TO 31/03/2005 THE APPELLANT SUBMITS THAT OUT OF AN AMOUNT OF RS.61 49 812/- AN AMOUNT OF RS.12 53 039/- IS PERTAINING TO AGGREGATE AMOUNT WH ICH IS IN EXCESS OF RS.50 000/- ON WHICH TAX IS NOT DEDUCTED AT SOURCE WHERE THE BALANCE AMOUNT OF RS.48 95 973/- IS PERTAINING TO AGGREGATE AMOUNT WHICH IS NOT IN EXCESS OF RS.50 000/- ON WHICH THE TAX IS NO T REQUIRED TO BE DEDUCTED AT SOURCE. COPY OF SUCH DETAILS IS ENCLOSE D HEREWITH MARKED AS 'ANNEXURE J'. ITA NO.1988/AHD/2012 (6 APPEALS) 16 IN SUMMARY THE APPELLANT SUBMITS AS UNDER: PARTICULARS 01/04/2004 TO 30/09/2004 01/10/2004 TO 31/03/2005 AGGREGATE OF AN AMOUNT WHICH IS IN EXCESS OF RS.20 000/- PER CONTRACT ON WHICH TAX IS NOT DEDUCTED AT SOURCE. (PL. REFER ANNEXURE- I) 24 18 866 --- AGGREGATE OF AN MOUNT WHICH IS IN EXCESS OF RS.50 000/- PER CONTRACTOR ON WHICH TAX IS NOT DEDUCTED AT SOURCE. (PL. REFER ANNEXURE - K) -- 12 53 039 AGGREGATE OF AN AMOUNT WHICH IS NOT IN EXCESS OF RS.20 000/- PER CONTRACT ON WHICH TAX IS NOT REQUIRED TO BE DEDUCTED AT SOURCE. 22 54 151 -- AGGREGATE OF AN AMOUNT WHICH IS NOT IN EXCESS OF RS.50 000/- PER CONTRACTOR ON WHICH TAX IS NOT REQUIRED TO BE DEDUCTED AT SOURCE. 48 95 973 TOTAL 46 73 017 64 49 012 BALANCE FREIGHT REPRESENTING DEBIT NOTES - RS.3 06 779/- COPY OF DETAILS OF FREIGHT REPRESENTING DEBITS NOTE S OF RS.3 06 779/- .IS ENCLOSED HEREWITH MARKED AS 'ANNEXURE - K' ON WHIC H THE TAX IS NOT REQUIRED TO BE DEDUCTED AT SOURCE UNDER THE SCHEME OF THE ACT ITA NO.1988/AHD/2012 (6 APPEALS) 17 10. THE LD.DR WHILE IMPUGNING THE ORDERS OF THE LD. CIT(A) CONTENDED THAT IN THE CASE OF M/S.KATARIA MOVERS THE LD.CIT(A) HA S RELIED UPON THE ORDER OF THE ITAT SPECIAL BENCH DECISION IN THE CASE OF MER ILYN SHIPPING & TRANSPORTS VS. ACIT 16 ITR (TRIB.) 1. HE POINTED OUT THAT ANALYSIS MADE BY THE LD.CIT(A) ON THE STRENGTH OF THIS DECISION IS N OT SUSTAINABLE BECAUSE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. S IKHANDHARKHAN N. TANVAR 257 ITR 212 HAS OVERRULED THIS DECISION. H E POINTED OUT THAT IN THE CASE OF M/S.KATARIA MOVERS THE LD.CIT(A) HAS OBSER VED THAT TOTAL DISALLOWANCE OF RS.6 53 59 734/- INCLUDING ENHANCEM ENT MADE BY THE CIT(A) WAS TO BE DONE IN THIS CASE. OUT OF THIS AMOUNT A SUM OF RS.3 39 11 223/- IS THE AMOUNT ON WHICH TDS WAS DEDUCTED BY THE ASSESSE E BUT WAS PAID LATE I.E. BEFORE THE DUE DATE OF FILING OF THE RETURN. WHEN THE LD.CIT(A) HAS WORKED OUT THE BALANCE AMOUNT THEN THIS AMOUNT WAS NOT E XAMINED WITH THE ANGLE WHETHER TDS WAS TO BE DEDUCTED BY THE ASSESSEE OR N OT. THE LD.CIT(A) HAS OBSERVED THAT ONLY A SUM OF RS.3 07 35 157/- REMAIN ED PAYABLE AS ON 31.3.2005. IN A WAY ON THE STRENGTH OF ORDER OF T HE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPOR TS (SUPRA) HAS CONSTRUED THAT THE AMOUNT WHICH IS NOT PAYABLE ON 31.3.2005 A LLOWABILITY OR DISALLOWABILITY ON ACCOUNT OF NON-DEDUCTION OF TDS OUGHT NOT TO BE CONSIDERED. OUT OF THIS TOTAL AMOUNT THE LD.CIT(A) HAS OBSERVED THAT A SUM OF RS.2 34 30 157/- REPRESENTING THE AMOUNT ON WHICH T HE ASSESSEE HAS ALREADY DEDUCTED TDS AND DEPOSITED IN THE GOVERNMENT TREASU RY. THUS THE LD.CIT(A) HAS WORKED OUT A SUM OF RS.7 30 50 000/- AS PAYABLE ON 31.3.2005 ON WHICH IT IS TO BE SEEN WHETHER TDS WAS DEDUCTIBLE OR NOT DEDUCTIBLE. ON THIS AMOUNT THE LD.CIT(A) HAS APPLIED THRESHOLD LIMIT O F RS.20 000/- AND RS.50 000/- I.E. PAYMENT REQUIRED TO BE MADE BY THE ASSESSEE TO A SINGLE TRUCK OWNER DURING THAT YEAR. ACCORDING TO THE LD.CIT(A) IF THE PAYMENT OF RS.20 000/- WAS MADE AS FREIGHT CHARGES DURING THE PERIOD OF 1.4.2004 TO ITA NO.1988/AHD/2012 (6 APPEALS) 18 31.9.2004 THEN THE ASSESSEE WAS NOT REQUIRED TO D EDUCT TDS. SIMILARLY IF AGGREGATE PAYMENT DOES NOT EXCEED RS.50 000/- FROM 1.10.2004 UPTO 31.3.2005 THEN ALSO THE ASSESSEE WAS NOT REQUIRE D TO DEDUCT TDS. IN THIS WAY THE LD.CIT(A) HAS CONFIRMED THE DISALLOWANCE A T RS.8 37 290/-. ACCORDING TO THE LD.DR HIS ANALYSIS IS INHERENTLY WRONG BECAUSE IT IS BASED ON THE ORDER OF THE ITAT SPECIAL BENCH DECISION WH ICH HAS BEEN OVERRULED BY THE HONBLE GUJARAT HIGH COURT. HE PRAYED THAT THIS ORDER OF THE LD.CIT(A) BE SET ASIDE. 11. ON THE OTHER HAND THE LD.COUNSEL FOR THE ASSES SEE HAS RAISED THREE FOLD SUBMISSIONS. HE POINTED OUT THAT AS FAR AS QUANTIF ICATION OF THE TOTAL AMOUNT IN THE CASE OF M/S.KATARIA MOVERS AT RS.6 53 59 734 /- AGITATED IN BOTH GROUNDS RAISED BY THE REVENUE AND GROUND NO.1 IN T HE CO OF THE ASSESSEE ARE CONCERNED NOT IN DISPUTE. THE LD.CIT(A) WHILE MAK ING AN ANALYSIS OF THIS AMOUNT HAS DIVIDED IT INTO TWO PARTS. THE FIRST P ART PERTAINS TO THE SUM ON WHICH THE ASSESSEE HAS DEDUCTED TDS BUT DEPOSITED AFTER 31.3.2005. THIS AMOUNT WAS DEPOSITED IN THE GOVERNMENT TREASURY BEF ORE THE DUE DATE OF FILING OF THE RETURN. THEREFORE AFTER THE AMENDME NT CARRIED OUT IN SECTION 40(A)(IA) BY WAY OF FINANCE ACT 2010 NO DISALLOWAN CE CAN BE MADE FROM THIS AMOUNT. THIS AMOUNT HAS BEEN QUANTIFIED AT RS.3 39 11 223/-. THIS HAS BEEN IMPUGNED IN GROUND NO.1 IN THE CASE OF M/S.KATARIA MOVERS. SIMILARLY AN AMOUNT OF RS.1 11 73 780/- AND RS.1 65 77 280/- HA VE BEEN WORKED OUT IN THE CASE OF KATARIA LOGISTIC SERVICE AND KATARIA TR ANSPORT CO. RESPECTIVELY. AS FAR AS THESE AMOUNTS ARE CONCERNED THE ISSUES A RE NOT IN DISPUTE. HE RELIED UPON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. B.M.S. PROJECTS P.LTD. 48 TAXMANN.COM 13 (GUJ). H E PLACED ON RECORD COPY OF THE JUDGMENT. THE HONBLE GUJARAT HIGH COURT WH ILE PUTTING RELIANCE UPON ITS EARLIER DECISION IN THE CASE OF GUJARAT NA RMADA VALLEY FERTILIZERS CO. LTD. 361 ITR 192 (GUJ) AND IN THE CASE OF CIT VS.O MPRAKASH R. CHAUDHARY ITA NO.1988/AHD/2012 (6 APPEALS) 19 HAS HELD THAT AMENDMENT IN SECTION 40(A)(IA) BY FIN ANCE ACT 2010 HAS RETROSPECTIVE EFFECT MEANING THEREBY IF THE EXPEN DITURE WAS INCURRED BY THE ASSESSEE IN ANY MONTH DURING THE PREVIOUS YEAR AND TDS WAS DEDUCTED BUT SUCH TDS WAS DEPOSITED AFTER EXPIRY OF ACCOUNTING Y EAR BUT BEFORE DUE DATE OF FILING OF THE RETURN THEN DISALLOWANCE UNDER SE CTION 40(A)(IA) WOULD NOT BE MADE. THE LD.DR WAS UNABLE TO CONTROVERT THIS CONT ENTION OF THE LD.COUNSEL FOR THE ASSESSEE. 12. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTA NCES WE ARE OF THE VIEW THAT AS FAR AS GROUND NO.1 IN ALL THESE THREE APPEA LS ARE CONCERNED THEY ARE DEVOID OF ANY MERIT BECAUSE THE ASSESSEE HAS DEDU CTED TDS ON THESE AMOUNTS AND TDS WAS DEPOSITED BEFORE THE DUE DATE O F FILING OF THE RETURN. THE LD.AO HAS MADE DISALLOWANCE ON THE GROUND THAT TDS WAS NOT DEPOSITED BEFORE THE END OF THE ACCOUNTING YEAR I.E. BEFORE 3 1.3.2005. THEREFORE GROUND NO.1 IN ALL THREE YEARS IS REJECTED. 13. WITH REGARD TO GROUND NO.2 IN ALL THREE APPEALS THE LD.COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT HIS REST OF TWO FOLD SU BMISSION ARE RELEVANT. IN HIS FIRST FOLD OF SUBMISSION HE CONTENDED THAT HONBLE CALCUTTA HIGH COURT IN ITA NO.191 OF 2009 HAS HELD THAT SECTION 40(A)(IA) IS NOT APPLICABLE IN THE ASSTT.YEAR 2005-06. HE PLACED ON RECORD COPY OF TH E DECISION OF THE HONBLE HIGH COURT. ON THE STRENGTH OF THIS DECISION IT W AS CONTENDED THAT THE HONBLE CALCUTTA HIGH COURT HAS OBSERVED THAT FINAN CE ACT 2004 GOT PRESIDENTIAL ASSENT ON 10.9.2004 AND THE ASSESSEE C OULD NOT FORESEE PRIOR TO 10.9.2004 THAT ANY AMOUNT PAID TO THE CONTRACTOR WI THOUT DEDUCTING TAX AT SOURCE WAS LIKELY TO BECOME NON-DEDUCTIBLE. IN OTH ER WORDS ACCORDING TO THE LD.CIT(A) IF THE AMENDMENT CARRIED OUT IN SECTION 4 0(A)(IA) BY WAY OF FINANCE ACT 2004 WAS NOT TO BE APPLICABLE IN ACCOUNTING YE AR RELEVANT TO THE ASSTTT.YEAR 2004-05 THEN NO DISALLOWANCE CAN BE M ADE. IN HIS SECOND FOLD ITA NO.1988/AHD/2012 (6 APPEALS) 20 OF SUBMISSION HE CONTENDED THAT THE ASSESSEE IS EN GAGED IN THE BUSINESS OF TRANSPORTATION. DURING THE COURSE OF WHICH IT REQ UIRES TO HIRE TRUCKS FROM VARIOUS PERSONS FOR TRANSPORTATION. THE ASSESSEE D ID NOT ENTER INTO ANY AGREEMENT EITHER ORAL OR WRITTEN WITH THE TRUCK OWN ERS OR DRIVERS WHOSE TRUCKS WERE TAKEN ON HIRE BY IT. IT AVAILS SERVICES OF S UCH OTHER TRUCK OWNERS ONLY FOR TRANSPORTATION OF GOODS. THE DUTIES OF SUCH TR UCK OWNERS OR DRIVER IS RESTRICTED MERELY TO CARRYING GOODS FROM ONE POINT TO ANOTHER AS DIRECTED TO THEM. IN OTHER WORDS THERE IS NO RELATIONSHIP OF CONTRACTOR AND CONTRACTEE BETWEEN THE ASSESSEE AND TRUCK OWNERS. FOR BUTTRES SING HIS CONTENTIONS HE RELIED UPON THE FOLLOWING DECISIONS: I) CIT VS. POOMPHUHAR SHIPPING CORPORATION LTD. 282 I TR 3 (MAD); II) CIT VS. UNITED RICE LTD. 322 ITR 594 (P&H); III) CIT VS. ESS KAY CONSTRUCTION CO. 267 ITR 618 (P&H) ; IV) ACIT VS. AMIR TRADERS ITA NO.563/AHD/2009 & CO. NO.171/AHD/2011; V) ISMAILBHAI I. GANDHI VS. ACIT ITA NO.3445/AHD/2009 14. WE ALSO APPRAISED HIM THE ORDER OF THE ITAT DE LHI BENCH IN THE CASE OF KULDEEP KUMAR SHARMA VS. ITO ITA NO.5672/DEL/10 . HE FURTHER CONTENDED THAT BEFORE THE LD.CIT(A) THE ASSESSEE H AS FILED COMPLETE DETAILS EXHIBITING THE PAYMENTS MADE BY THE ASSESSEE. HE T OOK US THROUGH SUBMISSIONS OF THE ASSESSEE REPRODUCED BY THE LD.CI T(A) ON PAGE NO.13 OF THE IMPUGNED ORDER. HE POINTED OUT THAT FOR THE SAKE O F ARGUMENTS IF IT IS ASSUMED THAT SECTION 194C IS APPLICABLE UPON THE AS SESSEE AND IT WAS REQUIRED TO BE DEDUCTED TDS THEN SUB-CLAUSE (III) OF SECTI ON 194C CONTEMPLATES THAT UPTO 30.9.2004 IF PAYMENT DOES NOT EXCEED RS.20 00 0/- PER CONTRACT THEN THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS. SIMILARLY AFTER 1.10.2002 UPTO 31.3.2005 IF THE AMOUNT CREDITED OR PAID TO THE CO NTRACTOR OR SUB-CONTRACTOR DOES NOT EXCEED RS.20 000/- IN A SINGLE TRANSACTION AND RS.50 000/- IN ITA NO.1988/AHD/2012 (6 APPEALS) 21 AGGREGATE THEN THE ASSESSEE WAS NOT REQUIRED TO D EDUCT TDS. THE ASSESSEE HAS GIVEN BIFURCATION OF THESE AMOUNTS WHICH HAS D ULY BEEN REPRODUCED BY THE LD.CIT(A) ON PAGE NO.15 OF THE IMPUGNED ORDER. AS PER WORKING REPRODUCED BY US IN THE FOREGOING PARAS THE ASSESS EE IN THE CASE OF KATARIA MOVERS REQUIRED TO DEDUCT TDS AT RS.1 60 09 690/-. SIMILARLY WORKING SUBMITTED BY THE ASSESSEE IN REST OF TWO APPEALS WH ICH HAS ALSO BEEN REPRODUCED ON PAGE NOS.14 AND 15 OF THE IMPUGNED OR DERS (RS.36 71 905/- IN THE CASE OF KATARIA TRANSPORT CO. AND RS.13 05 044 /- IN KATARIA LOGISTIC SERVICES). IT WAS DEMONSTRATED BEFORE US THAT IF O THER EXPLANATION OF THE RESPONDENTS TO SUPPORT THE ORDER OF CIT(A) IS NOT BEING ACCEPTED THEN TO THE EXTENT OF ABOVE WORKING AT THE MOST DISALLOWANCE C AN BE MADE IN ALL THREE CASES. IN THIS WAY THE ASSESSEE CONTENDED THAT NO DISALLOWANCE DESERVES TO BE MADE SECTION 40(A)(IA) IN THE CASES OF THE ASSESSEE AND THE APPEALS OF THE REVENUE DESERVE TO BE DISMISSED. 15. IN REBUTTAL THE LD.DR CONTENDED THAT THE ASSES SEE FAILED TO DEDUCT TDS AND THEREFORE THE LD.CIT(A) OUGHT TO HAVE DISALLOW ED THE AMOUNTS PLEADED IN GROUND NO.2 IN RESPECTIVE APPEALS. 16. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. AS FAR AS SUBMISSION OF THE LD.DR IS CONCERNED THAT THE LD.CIT(A) HAS MADE ANALYSIS OF ISSUE REGARDING ENHANCEMENT OF DISALLOWANCE ON THE STRENGTH OF ITAT SPECIAL BENCH DECISION IN THE CAS E OF MERILYN SHIPPING & TRANSPORTS (SUPRA) IS CONCERNED WE FIND FORCE. TH E LD.CIT(A) IN THE CASE OF KATARIA MOVERS HAS COMMITTED AN ERROR BY WORKING OU T A SUM OF RS.3 07 35 157/- AS AN AMOUNT WHICH REMAINED PAYABL E ON 31.3.2005. THE LD.CIT(A) HAS MADE ANALYSIS WHETHER ANY AMOUNT CAN BE DISALLOWED FROM THIS AMOUNT. IN OUR OPINION THIS APPRECIATION OF FACT IS NOT IN ACCORDANCE WITH THE ITA NO.1988/AHD/2012 (6 APPEALS) 22 PROPOSITION LAID DOWN BY THE HONBLE GUJARAT HIGH C OURT IN THE CASE OF SIKHANDARKHAN M. TANVAR (SUPRA). NEVERTHELESS IT IS NOT DIRECT ON THE ISSUE. 17. WE ARE CALLED UPON TO DECIDE WHETHER THE ASSESS EE BEING A TRANSPORTER WAS REQUIRED TO DEDUCT TDS ON HIRING OF TRUCKS OR N OT. SECTION 194C AND 40(A)(IA) HAVE THE DIRECT BEARING ON THE CONTROVER SY. THEREFORE WE DEEM IT APPROPRIATE TO TAKE NOTE OF THE RELEVANT CLAUS ES. 40. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN S ECTIONS 30 TO [38] THE FOLLOWING AMOUNTS SHALL NOT BE DEDUCTED IN COMP UTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BU SINESS OR PROFESSION (A) IN THE CASE OF ANY ASSESSEE XXXXXXXXX (IA) ANY INTEREST COMMISSION OR BROKERAGE [RENT ROYALTY] FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICE S PAYABLE TO A RESIDENT OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB -CONTRACTOR BEING RESIDENT FOR CARRYING OUT ANY WORK (INCLUDING SUPP LY OF LABOUR FOR CARRYING OUT ANY WORK) ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED O R AFTER DEDUCTION [HAS NOT BEEN PAID. XXXXXXXXXX 194C. PAYMENTS TO CONTRACTORS AND SUB-CONTRACTORS. (1) ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE CONTR ACTOR) FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING O UT ANY WORK) IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND SHALL AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF TH E CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CH EQUE OR DRAFT OR BY ANY OTHER MODE WHICHEVER IS EARLIER DEDUCT AN AMO UNT EQUAL TO (I) ONE PER CENT IN CASE OF ADVERTISING (II) IN ANY OTHER CASE TWO PER CENT OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THERE IN. ITA NO.1988/AHD/2012 (6 APPEALS) 23 (2) ANY PERSON (BEING A CONTRACTOR AND NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY) RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE SUB-CONTRACTOR) IN PURSUANCE OF A CONTRACT WITH THE SUB-CONTRACTOR FOR CARRYING OUT OR FOR THE SUPPLY OF LABOUR FOR CARRYING OUT THE WHOLE OR ANY PART OF THE WORK UNDERTAKEN BY THE CONTRACTOR OR FOR SUPPLYING WHETHER WHOLLY OR PARTLY ANY LABOUR WHICH THE CONTRACTOR HAS UNDERTAK EN TO SUPPLY SHALL AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE SUB-CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE WHICHEVER IS EA RLIER DEDUCT AN AMOUNT EQUAL TO ONE PER CENT OF SUCH SUM AS INCOME- TAX ON INCOME COMPRISED THEREIN. 18. BARE PERUSAL OF SECTION 40 (A) (IA) WOULD SU GGEST THAT DISALLOWANCE UNDER THIS SECTION CAN BE MADE IN RESPECT O F AMOUNTS PAYABLE TO A CONTRACTOR OR SUB CONTRACTOR FOR CARRYING OUT ANY WORK ON WHICH TAX IS DEDUCTIBLE UNDER CHAPTER 17B AND SUCH TAX HAS NOT B EEN DEDUCTED OR PAID DURING THE PREVIOUS YEAR OR IN THE SUBSEQUENT YEAR BEFORE THE EXPIRY OF THE TIME PERIOD PRESCRIBED U/S 200 (1) OF THE A CT. SECTION 194C(2) PROVIDES THAT WHERE A CONTRACTOR NOT BEING AN INDI VIDUAL OR A HINDU UNDIVIDED FAMILY ENGAGED FOR CARRYING OUT ANY WORK OR FOR SUPPLYING LABOUR FOR CARRYING OUT SUCH WORK BY CENTRAL OR STATE GOVERNME NT A LOCAL AUTHORITY OR A CORPORATION HAS IN TERMS ENGAGED ANY SUB CONTRACTO R FOR CARRYING OUT THE WHOLE OR ANY PART OF THE WORK UNDERTAKEN BY THE CONTRACTOR OR FOR SUPPLY OF LABOUR UNDERTAKEN BY THE CONTRACTOR TO SUPPLY H E WILL BE REQUIRED TO DEDUCT TAX AT SOURCE FROM THE PAYMENT MADE TO THE SUB CO NTRACTOR. THUS IT CONTEMPLATES THREE CONDITIONS NAMELY 1) THERE MUST BE A CONTRACT BETWEEN THE PERSONS RESPONSIBLE FOR MAKING THE PAYMENT AND THE CONTRACTOR (B) THE CONTRACT MUST BE FOR SUPPLY OF L ABOUR OR FOR CARRYING OUT ANY WORK (C) CONTRACTOR MUST HAVE ENGAGED A SUB CO NTRACTOR FOR CARRYING OUT THE WHOLE OR ANY PART OF THE WORK UNDERTAKEN OR SUP PLY OF LABOUR. ITA NO.1988/AHD/2012 (6 APPEALS) 24 19. AN ANALYSIS OF ACCOUNT WE FIND THAT REVENUE AU THORITIES HAVE ASSUMED EXISTENCE OF EITHER CONTRACTOR-SHIP BETWEEN THE ASS ESSEE AND OTHER TRUCK OWNERS WHOSE TRUCKS WERE HIRED BY THE ASSESSEE FOR TRANSPORT. THERE IS NO EVIDENCE ON RECORD. THE ASSESSEE HAS EVER ENTERED INTO ANY CONTRACT OR CREATED ANY SUBCONTRACT-SHIP WITH ANY OF THE TRUCK OWNERS. IN THE ORDER OF THE ITAT DELHI BENCH IN THE CASE OF KULDEEP KUMAR SHAR MA (SUPRA) A REFERENCE WAS MADE TO THE ORDER OF THE ITAT VISAKHAPATNAM BE NCH IN THE CASE OF MYTHRI TRANSPORT CORPORATION VS. ACIT 124 ITD 40. RELEVANT DISCUSSION BY THE ITAT VISAKHAPATNAM IS WORTH TO NOTE. IT READS AS UNDER: 8.2 AS STATED EARLIER THE ASSESSEE HEREIN IS A T RANSPORT CONTRACTOR AND HAS ENTERED INTO AN AGREEMENT WITH PARTI ES WHEREBY THE ASSESSEE UNDERTOOK TO TRANSPORT BITUMEN TO VARIOUS POINTS AS PER THEIR DIRECTIONS. ACCORDING TO THE ASSESSEE THE LO RRIES USED FOR THE SAID PURPOSE ARE SPECIALLY DESIGNED WITH PROPE R HEATING ARRANGEMENTS . THE CLAIM OF THE ASSESSEE IS THA T SINCE IT DID NOT HAVE REQUIRED NUMBER OF LORRIES IT HAD TO HIRE LORRIE S FROM OTHERS WHO SIMPLY PLACED THE VEHICLES AT THE DISPOSAL OF THE ASSESSEE. THE ASSESSEE ALONE UNDER ITS CONTROL AND SUPERV ISION HAS EXECUTED WHOLE OF THE CONTRACT. ACCORDING TO THE ASSES SEE THE INDIVIDUAL LORRY OWNERS HAVE NOT CARRIED OUT ANY PART OF THE WORK UNDERTAKEN BY THE ASSESSEE. X X X X X X X X X X X X 8.6 AS PER THE PROVISIONS OF SECTION 194C(2 ) AS EXPLAINED IN PARA 8.1 SUPRA THE SUB-CONTRACTOR SHOULD CARR Y OUT THE WHOLE OR ANY PART OF THE WORK UNDERTAKEN BY THE ASSESSEE. TH E DICTIONARY MEANING OF THE WORDS 'CARRY OUT' IS TO CARRY INTO PRACTICE; TO EXECUTE; TO ACCOMPLISH. IT SIGNIFIES A POSI TIVE INVOLVEMENT IN THE EXECUTION OF THE WHOLE OR ANY PART OF THE M AIN WORK BY SPENDING HIS TIME MONEY ENERGY ETC. AND FURTHER TAKI NG THE RISKS IN CARRYING ON THE SAID ACTIVITY. IN THE INSTAN T CASE THERE IS NO MATERIAL TO SUGGEST THAT THE OTHER LORRY OWN ERS INVOLVED THEMSELVES IN CARRYING OUT ANY PART OF THE WORK UNDERTAKEN BY THE ASSESSEE BY SPENDING THEIR TIME ENERGY AND BY TAKING THE RISKS ASSOCIATED WITH THE MAIN CONTRACT WORK. IN THE ABSENCE OF T HE ABOVE SAID CHARACTERISTICS ATTACHED TO A SUB-CONTRACT IN THE INSTANT CASE THE PAYMENT MADE TO THE LORRY OWNERS STANDS AT PAR WITH THE ITA NO.1988/AHD/2012 (6 APPEALS) 25 PAYMENTS MADE TOWARDS SALARIES RENT ETC. HENC E THE REASONING OF THE TAX AUTHORITIES WHICH IS STATED IN PARA 8 .3 SUPRA TO HOLD THAT THE PAYMENT MADE FOR HIRED VEHICLES IS A SUB-CONT RACT PAYMENT IN OUR OPINION IS NOT CORRECT AND NOT BASED ON RELEV ANT CONSIDERATIONS. HENCE IN OUR CONSIDERED OPINION IT CANNOT BE SA ID THAT THE PAYMENTS MADE FOR HIRED VEHICLES WOULD FALL IN THE CATE GORY OF PAYMENT TOWARDS A SUB-CONTRACT WITH THE LORRY OWNERS. IN THAT CASE THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX AT SOURC E AS PER THE PROVISIONS OF SECTION 194C(2) ON THE PAYMENTS MADE TO THE LORRY OWNERS FOR LORRY HIRE. CONSEQUENTLY THE PROVI SIONS OF SECTION 40(A)(IA) SHALL NOT APPLY TO SUCH PAYMENTS. 8.7 AS WE HAVE DECIDED THE ISSUE IN FAV OUR OF THE ASSESSEE FOR THE REASONS STATED ABOVE IN OUR OPINION CONSIDERATION OF OTHER CONTENTIONS OF THE ASSESSEE AS WELL AS THE R EVENUE IS NOT NECESSARY. 20. SIMILAR LOGIC IS AVAILABLE IN THE PRESENT CASE. AS OBSERVED EARLIER THE ASSESSEE COULD BE FASTENED WITH THE OBLIGATIONS TO DEDUCT TDS IF IT HAS ENTERED INTO A CONTRACT WITH TRUCK OWNERS. THE ASS ESSEE HAS ONLY AVAILED SERVICES OF THE CONTRACTOR FOR TRANSPORTING THE GOO DS FROM POINT A TO B. ALL RISK AND REWARD FOR TRANSPORTING THE GOODS REMA IN WITH THE ASSESSEE. THEREFORE THE LD.REVENUE AUTHORITIES HAVE FAILED T O APPRECIATE THAT RELATIONSHIP OF CONTRACTOR AND CONTRACTEE WAS NOT E XISTED BETWEEN THE ASSESSEE AND THE ALLEGED TRUCK OWNERS. ON THIS REASON AMONG ST OTHER WE ARE OF THE VIEW THAT THE ORDERS OF THE CIT(A) ARE NOT DESERVE TO BE INTERFERED WITH THOUGH BY WAY OF DIFFERENT REASONS. 21. IN THE NEXT FOLD OF SUBMISSION IT WAS CONTENDE D BY THE ASSESSEE THAT SECTION 40(A)(IA) IS NOT APPLICABLE DURING THE ASST T.YAR 2005-06. THIS ARGUMENT WAS RAISED ON THE STRENGTH OF HONBLE CALC UTTA HIGH COURTS DECISION IN THE CASE OF PIU GHOSH VS. DCIT RENDERE D IN ITA NO.191 OF 2009. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS IS THE SOLITARY DECISION ON THE POINT AND TRIBUNAL IS BOUND TO FOLLOW. HE POIN TED OUT THAT SOLITARY DECISION OF NON-JURISDICTIONAL HIGH COURT IS REQUIR ED TO BE FOLLOWED UNTIL AN ITA NO.1988/AHD/2012 (6 APPEALS) 26 UNLESS THERE IS A CONTRARY DECISION AT THE END OF H ONBLE JURISDICTIONAL HIGH COURT OR AT THE END OF THE HONBLE SUPREME COURT. IN THIS DECISION THE HONBLE HIGH COURT HAS HELD THAT SECTION 40(A)(IA) IS NOT APPLICABLE IN THE ASSTT.YEAR 2005-06 THEREFORE NO DISALLOWANCE CAN BE MADE. THE DISCUSSION MADE BY THE HONBLE CALCUTTA HIGH COURT READ AS UND ER: MR.AGARWALS CRITICISM IS NOT WITHOUT FORCE BUT HE HAS NOT BEEN ABLE TO POINT OUT AS TO HOW COULD THE ASSESSEE HAVE COME TO KNOW THAT THE OMISSION TO DEDUCT TAX FROM ANY PAYMENT MADE TO A CONTRACTOR SHALL BECOME NOT DEDUCTIBLE UNDER SECTION 40 BEFORE THE F INANCE ACT 2004 GOT PRESIDENTIAL ASSENT ON 10TH SEPTEMBER 2004. TH IS QUESTION HE HAS NOT ANSWERED BECAUSE HE HAS NO ANSWER TO OFFER. ADMITTEDLY THE FINANCE ACT 2004 GOT PRESIDENTIAL ASSENT ON 10TH SEPTEMBER 2004. THE ASSESSEE COULD NOT HAVE FORESE EN PRIOR TO 10TH SEPTEMBER 2004 THAT ANY AMOUNT PAID TO A CONTRACTO R WITHOUT DEDUCTING TAX AT SOURCE WAS LIKELY TO BECOME NOT DE DUCTIBLE UNDER SECTION 40. IT IS DIFFICULT TO ASSUME THAT THE LEGI SLATURE WAS NOT AWARE OR DID NOT FORESEE THE AFORESAID PREDICAMENT. THE L EGISLATURE THEREFORE PROVIDED THAT THE ACT SHALL BECOME OPERATIVE ON 1ST APRIL 2005. ANY OTHER INTERPRETATION SHALL AMOUNT TO PUNISHING THE ASSESSEE FOR NO FAULT OF HIS FOLLOWING THE JUDGMENT IN THE CASE OF HINDUSTHAN ELECTOR GRAPHITES LTD. [SUPRA]. ON THE TOP OF THAT SECTION 4 RELIED UPON BY MR.AGA RWAL MERELY PROVIDES FOR AN ENACTMENT AS REGARDS RATE OF TAX TO BE CHARGED IN ANY PARTICULAR ASSESSMENT YEAR WHICH HAS NO APPLICATION TO THE CASE BEFORE US. SECTION 11 OF THE FINANCE ACT BY WHICH CLAUSE ( IA) WAS ADDED TO SECTION 40 OF THE INCOME TAX ACT DOES NOT PROVIDE T HAT THE SAME WAS TO BECOME EFFECTIVE FROM THE ASSESSMENT YEAR 2005-06. IT MERELY SAYS IT SHALL BECOME EFFECTIVE ON 1ST APRIL 2005 WHICH FOR REASONS ALREADY DISCUSSED SHOULD MEAN TO REFER TO THE FINANCIAL YEA R. THERE IS AS SUCH NO SCOPE FOR ANY AMBIGUITY NOR IS THERE ANY SCOPE F OR CONFUSION. EVEN IN A CASE WHERE THERE IS ANY AMBIGUITY LAW IN THAT REGARD WAS NOTICED BY THE SUPREME COURT IN THE CASE OF CIT (CENTRAL)-I VS. VATIKA TOWNSHIP PVT.LTD. REPORTED IN (2014) 367 ITR 466 ( SC) AS FOLLOWS : TAX LAWS ARE CLEARLY IN DEROGATION OF PERSONAL RIG HTS AND PROPERTY INTERESTS AND ARE THEREFORE SUBJECT TO S TRICT CONSTRUCTION AND ANY AMBIGUITY MUST BE RESOLVED AG AINST ITA NO.1988/AHD/2012 (6 APPEALS) 27 IMPOSITION OF THE TAX. IN BILLINGS V. U.S. (232 U.S . 261 S.CT. 421 (1914)) THE SUPREME COURT CLEARLY ACKNOWLEDGED THI S BASIC AND LONGSTANDING RULE OF STATUTORY CONSTRUCTION : TAX STATUTES SHOULD BE STRICTLY CONSTRUED AND IF ANY AMBIGUITY BE FOUND TO EXIST IT MUST BE RESOLVED IN FAVOR OF THE CITIZEN. EIDMAN V. MARTINEZ 184 U.S. 578 583; UNI TED STATES V. WIGGLESWORTH 2 STORY 369 374; MUTUAL BENEFIT LIF E INS. CO.7 V. HEROD 198 F. 199 201 AFFD 201 F. 918; PARKVIEW BLDG. ASSN. V. HEROD 203 F. 876 880; MUTUAL TRUST CO. V. MILL ER 177 N.Y. 51 57. AGAIN IN UNITED STATES V. MERRIAM (263 U.S. 179 4 4 S. CT.69 (1923) THE SUPREME COURT CLEARLY STATED AT PP. 187 -88: ON BEHALF OF THE GOVERNMENT IT IS URGED THAT TAXATI ON IS A PRACTICAL MATTER AND CONCERNS ITSELF WITH THE SUBST ANCE OF THE THING UPON WHICH THE TAX IS IMPOSED RATHER THAN WIT H LEGAL FORMS OR EXPRESSIONS. BUT IN STATUTES LEVYING TAXES THE L ITERAL MEANING OF THE WORDS EMPLOYED IS MOST IMPORTANT FOR SUCH S TATUTES ARE NOT TO BE EXTENDED BY IMPLICATION BEYOND THE CLEAR IMPORT OF THE LANGUAGE USED. IF THE WORDS ARE DOUBTFUL THE DOUBT MUST BE RESOLVED AGAINST THE GOVERNMENT AND IN FAVOR OF THE TAXPAYER. GOULD V. GOULD 245 U.S. 151 153. WE ARE OF THE OPINION THAT THE LEARNED TRIBUNAL ERR ED IN APPLYING PROVISION OF SECTION 40(A)(IA) IN DISALLOWING PAYME NT OF A SUM OF RS.4 30 386/- TO A CONTRACTOR WITHOUT DEDUCTING TDS DURING THE FINANCIAL YEAR 2004-05 CORRESPONDING TO ASSESSMENT YEAR 2005- 06. IN THAT VIEW OF THE MATTER THE QUESTION FORMULATED IS ANSWERED IN THE AFFIRMATIVE AND IN FAVOUR OF THE ASSESSEE. 22. IN THE ABSENCE OF ANY CONTRARY DECISION BROUGHT TO OUR NOTICE BY THE LD.DR WE ARE BOUND TO FOLLOW AND THEREFORE THE A SSESSEE CANNOT BE HELD IN DEFAULT FOR NON-DEDUCTING THE TDS ON THE PAYMENTS M ADE TO TRUCK OWNERS FOR HIRING THE TRUCKS. 23. NOW WE TAKE CROSS-OBJECTION FILED BY THE ASSES SEE. CO 227/AHD/2012 (KATARIA MOVERS) ITA NO.1988/AHD/2012 (6 APPEALS) 28 24. IN THE FIRST GROUND OF CO THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN PARTLY CONFIRMING THE DISALL OWANCE OF RS.8 75 210/- WITH THE AID OF SECTION 40(A)(IA) OF THE ACT. 25. SINCE ON TWO FOLD OF SUBMISSIONS WE HAVE HELD THAT THE ASSESSEE WAS NOT UNDER OBLIGATION TO DEDUCT TDS. WE HAVE FOLLOW ED THE DECISION OF THE HONBLE CALCUTTA HIGH COURT AND HELD THAT SECTION 4 0(A)(IA) WAS NOT APPLICABLE TO THE ASSTT.YEAR 2005-06. SIMILARLY W E HAVE HELD THAT THERE IS NO CONTRACTOR-CONTRACTEE RELATIONSHIP EXISTS BETWEEN T HE ASSESSEE AND THE TRUCK OWNERS THEREFORE NO TDS IS REQUIRED TO BE DEDUCTE D. ON THESE REASONS WE ALLOW FIRST GROUND OF CO AND DELETE DISALLOWANCE. 26. IN THE NEXT GROUND THE GRIEVANCE OF THE ASSESS EE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING ADHOC DISALLOWANCE OF RS.69 274/-. THE ASSESSEE HAS DEBITED EXPENDITURE UNDER THE HEAD CAR EXPENSES AND DEPRECIATION. THE LD.CIT(A) CONFIRMED THE DISALLOWANCE AT THE RATE OF 1/5 TH OF THIS EXPENSES. THE LD.COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THERE CANNOT BE ANY PERSONAL ELEMENT INVOLVED IN THE INCURRING OF THE E XPENSES OF A COMPANY AND THEREFORE NO DISALLOWANCE DESERVES TO BE MADE. HE RELIED UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF SA YAJI IRON & ENGG. CO. VS. CIT 253 ITR 749 (GUJ). 27. AT THE TIME OF HEARING THE LD.COUNSEL FOR THE ASSESSEE HAS AGREED THAT DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF SAYAJI IRON & ENGG. CO. (SUPRA) IS NOT APPLICABLE TO THE CASE OF THE AS SESSEE AS THE ASSESSEE IS A REGISTERED AND FIRM AND NOT A COMPANY. SINCE ASSE SSEE FAILED TO SUBMIT COMPLETE DETAILS THEREFORE ADHOC DISALLOWANCE IS MADE. WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL. IT IS REJECTED. ITA NO.1988/AHD/2012 (6 APPEALS) 29 28. NEXT GROUND OF APPEAL GRIEVANCE OF THE ASSESSE E IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.3 21 275/- IN RESPECT OF BAD DEBTS. 29. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AS DEBITED A SUM OF RS.3 21 275/- UNDER THE HEAD BAD DEBTS. THE LD.A O HAS CALLED FOR EXPLANATION OF THE ASSESSEE IN SUPPORT OF THIS CLAI M. VIDE LETTER DATED 20.12.2007 THE ASSESSEE CONTENDED THAT IT HAS PAID CERTAIN AMOUNTS TO STAFF FOR THE BUSINESS PURPOSE BUT EMPLOYEES DID NOT RETURN THE BALANCE AND LEFT THE JOB WITHOUT INTIMATING THE ASSESSEE. THUS THERE WAS N O OPTION BUT TO WRITE THEM OFF. THE EXPENDITURE IF CANNOT BE ALLOWED AS A BA D DEBT THEN IT SHOULD BE ALLOWED AS BUSINESS LOSS. THE LD.AO HAS REJECTED T HE CLAIM OF THE ASSESSEE ON THE GROUND THAT IT CANNOT BE ALLOWED AS BAD DEBT B ECAUSE IT WAS NOT OFFERED FOR TAXATION IN ANY EARLIER YEARS. SIMILARLY IT W AS GIVEN AS AN ADVANCE TO THE EMPLOYEES THEREFORE IT CANNOT BE ALLOWED AS BUSIN ESS LOSS. ON APPEAL THE LD.CIT(A) CONCURRED WITH THE AO BY OBSERVING THAT T HE ASSESSEE FAILED TO BRING EVIDENCE DEMONSTRATING THE FACT THAT THE EXPE NDITURE WAS INCURRED FOR THE PURPOSE OF BUSINESS. 30. ON DUE CONSIDERATION OF THE ABOVE FACTS WE ARE OF THE VIEW THAT BOTH THE REVENUE AUTHORITIES HAVE FAILED TO APPRECIATE T HE FACTS AND CIRCUMSTANCES. THE EXPLANATION OF THE ASSESSEE WAS THAT IT WAS GIV EN AS ADVANCE TO THE STAFF FOR BUSINESS PURPOSE I.E. IT WAS TO BE INCURRED FO R HIRING TRUCKS. THE LD.AO HAS CONSIDERED AS IF IT WAS GIVEN TO THE STAFF FOR THEIR PERSONAL NEEDS. THE AO HAS CONSIDERED IT AS ADVANCE TO THE STAFF. HE HAS TOTALLY CHANGED THE MEANING OF THE EXPLANATION OF THE ASSESSEE AND EVEN IF IT IS AN ADVANCE TO THE STAFF DURING THE COURSE OF EMPLOYMENT AND STAFF DOES NOT RETURN IT THEN HOW IT COULD BE ALLOWED AS BUSINESS LOSS IS NOT UNDERSTAN DABLE. SIMILARLY THE LD.CIT(A) HAS OBSERVED THAT THE ASSESSEE FAILED TO BRING ANY EVIDENCE TO ITA NO.1988/AHD/2012 (6 APPEALS) 30 DEMONSTRATE THE FACT THAT HOW IT WAS INCURRED IN DA Y-TO-DAY BUSINESS ACTIVITY. THE ASSESSEE HAS SUBMITTED AUDITED ACCOUNTS AND LED GER ACCOUNTS DEMONSTRATING THE FACT THAT THE AMOUNT WAS GIVEN TO THE STAFF. WHAT OTHER EVIDENCE CAN BE SUBMITTED ? THEREFORE IN OUR OPINI ON THE LD.REVENUE AUTHORITIES HAVE NOT APPRECIATED THE FACT IN RIGHT PERSPECTIVE. WE ALLOW THIS GROUND OF APPEAL AND DELETE DISALLOWANCE. 31. NOW WE TAKE UP CO NO.228/AHD/2012(KATARIA TRANSPOR T COMPANY). 32. ONLY GROUND TAKEN BY THE ASSESSEE RELATES TO AD HOC DISALLOWANCE MADE BY THE AO OUT OF VARIOUS EXPENSES DEBITED BY THE AS SESSEE UNDER THE HEAD TELEPHONE EXPENSES VEHICLE EXPENSES DEPRECIATION ON CAR AND TRAVELLING EXPENSES. WE FIND THAT THE AO HAS MADE DISALLOWANC E AT THE RATE OF 10% OF THE TOTAL EXPENDITURE OUT OF TELEPHONE AND VEHICLE EXPENSES 20% ON CAR EXPENSES AND DEPRECIATION ON CAR AND 15% ON TRAVELL ING EXPENSES. THE LD.CIT(A) HAS CONFIRMED THE DISALLOWANCE AT THE RAT E OF 10% OF THE TOTAL EXPENSES. AFTER GOING THROUGH THE FINDING OF THE L D.CIT(A) WE DO NOT FIND ANY MERIT IN THIS GROUND OF CO. IT IS REJECTED. A CCORDINGLY CO OF THE ASSESSEE IN THE CASE OF KATARIA TRANSPORT COMPANY I S REJECTED. CO NO.229/AHD/2012 (KATARIA LOGISTICS SERVICES) 33. AS FAR AS FIRST GROUND OF THIS CO IS CONCERNED THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRM ING THE DISALLOWANCE OF RS.73 100/- WITH THE AID OF SECTION 40(A)(IA). AS OBSERVED IN THE CASE OF KATARIA MOVERS WE HAVE FOLLOWED THE DECISION OF TH E HONBLE CALCUTTA HIGH COURT AND HELD THAT THE SECTION 40(A)(IA) IS NOT AP PLICABLE TO THE PRESENT CASE. SIMILARLY WE HAVE OBSERVED THAT RELATIONSHIP OF CO NTRACTOR AND CONTRACTEE WAS NOT EXISTING BETWEEN THE ASSESSEE AND OTHER TRUCK O WNERS AND THEREFORE THE ASSESSEE WAS NOT UNDER OBLIGATION TO DEDUCT TDS. F OLLOWING THE OBSERVATION ITA NO.1988/AHD/2012 (6 APPEALS) 31 OF THE HONBLE CALCUTTA HIGH COURT WE ALLOW THIS G ROUND OF CO AND DELETE DISALLOWANCE OF RS.73 100/-. 34. IN THE NEXT GROUND OF CO THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) ERRED IN CONFIRMING DISALLOWANCE MADE BY THE AO OUT TELEPHONE TRAVELLING CONVEYANCE AND CAR EXPENSES. WE HAVE D ISCUSSED THIS ISSUE IN THE CASE OF KATARIA MOVERS AS WELL AS KATARIA TRANSPORT SERVICES WHERE WE HAVE OBSERVED THAT THE ASSESSEE FAILED TO GIVE COMPLETE DETAILS IN SUPPORT OF THESE EXPENSES INCURRED BY IT. THE LD.AO HAS MADE AD HOC DISALLOWANCE AT DIFFERENT RATES AGAINST DIFFERENT EXPENDITURE. THE LD.CIT(A) CONFIRMED ADHOC DISALLOWANCE AT THE RATE OF 10% AND WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD.CIT(A). ACCORDINGLY THIS GROUND OF CO IS R EJECTED. 35. IN THE RESULT APPEALS OF THE REVENUE AND CO OF THE ASSESSEE IN THE CASE OF KATARIA LOGISTIC ARE DISMISSED WHEREAS CO OF T HE ASSESSEE IN THE CASE OF KATARIA MOVERS AND TRANSPORT SERVICES ARE PARTLY AL LOWED. ORDER PRONOUNCED IN THE COURT ON 6 TH OCTOBER 2016 AT AHMEDABAD. SD/- SD/- (AMARJIT SING H) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER