The DCIT, Circle-1,, Bhavnagar v. M/s. Suresh Ship Breaking Pvt.Ltd., Bhavnagar

ITA 3006/AHD/2011 | 2008-2009
Pronouncement Date: 30-04-2015 | Result: Dismissed

Appeal Details

RSA Number 300620514 RSA 2011
Assessee PAN AAGCS3096M
Bench Ahmedabad
Appeal Number ITA 3006/AHD/2011
Duration Of Justice 3 year(s) 4 month(s) 28 day(s)
Appellant The DCIT, Circle-1,, Bhavnagar
Respondent M/s. Suresh Ship Breaking Pvt.Ltd., Bhavnagar
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2015
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 30-04-2015
Date Of Final Hearing 21-04-2015
Next Hearing Date 21-04-2015
Assessment Year 2008-2009
Appeal Filed On 02-12-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD BEFORE SHRI PRAMOD KUMAR ACCOUNTANT MEMBER AND SHRI S.S. GODARA JUDICIAL MEMBER ITA NO . 3006 /AHD/201 1 A. Y. 200 8 - 0 9 DCIT BHAVNAGAR VS SUREH SHIP BREAKING PVT. LTD. NR. RAILWAY CROSSING KUMB HARWADA BHAVNAGAR. PAN: AAGCS 3096M . (APPELLANT) (RESPONDENT) REVENUE BY : S HRI P.L. KUREEL SR. D.R. ASSESSEE(S) BY : / DATE OF HEARING : 2 1 / 0 4 /201 5 / DATE OF PRONOUNCEMENT: 30 / 0 4 /201 5 / O R D E R PER SHRI S.S. GODARA JUDICIAL MEMBER TH IS REVENUE S APPEAL FOR A.Y S . 200 8 - 09 ARISE S FROM ORDER OF THE CIT( A) - XX AHMEDABAD DATED 26.09.2011 PASSED I N CASE NO. 487/10 - 11 DELETING THE IMPUGNED DISALLOWANCE OF RS.51 84 255/ - MADE BY THE ASSESSING OFFICER UNDER THE HEAD WORKERS WAGES FOR NON DEDUCTION TDS U/S.40(A)(IA) IN PROCEEDINGS U/S. 143 (3) OF THE INCOME TAX A CT IN SHORT THE ACT . 2. THE ASSESSEE - COMPANY MANUFACTURES YARN AND THREAD. IT FILED RETURN ON 25.9.2008 ADMITTING INCOME OF RS.4 13 620/ - . THE ITA NO. 30 06 /AHD/201 1 SURESHSHIP BREAKING PVT. LTD. FOR A.Y. 200 8 - 0 9 - 2 - ASSESSING OFFICER TOOK UP SCRUTINY. THE ASSESSEE HAD CLAIMED IMPUGNED DEDUCTION OF WORKER WAGES AMOUNTING TO RS.51 84 255/ - . THE ASSESSING OFFICER SOUGHT FOR ALL RELEVANT DETAILS. THE ASSESSEE PLEADED TO HAVE BEEN ENGAGED IN MANUFACTURING ACTIVITY AND PAID ITS WORKERS THE IMPUGNED WAGES ALLOWABLE U/S.37(1) OF THE ACT ITS WORKERS/PAYEES HAS STAYED IN ITS FACTORY FOR A PERIOD OF 9 TO 12 MONTHS AND THEREAFTER ONLY; THEY WOULD BE PAID AFTER SUCCESSFUL COMPLETION OF THE SAID PERIOD AND THE WORK ASSIGNED AND THAT THEY DID NOT HAVE REQUISITE TAXABLE INCOME IN THEIR HANDS SO AS TO GIVE PAN DETAILS. THE ASSESSING OFFICER OBSERVED IN ASSESSMENT ORDER DATED 24.12.2010 THAT THE IMPUGNED PAYMENTS HAD BEEN MADE TO LABOUR CONTRACTORS TO WHOM THE NECESSARY CONTRACT HAD BEEN ASSIGNED NO TDS HAVE BEEN DEDUCTED U/S.194C ON THE WORKER S WAGES IN QUESTION AND EVEN IF THE ASSESSEE S P LEA OF MAKING THE PAYMENT ONLY AT THE TIME OF COMPLETION OF THE ASSIGNED WORK THE SAME WAS ONLY IN THE NATURE OF A CONTRACT PAYMENT UNDER THE AFORESAID PROVISION MANDATING TDS DEDUCTION. HE ADOPTED THIS REASONING FOR DISALLOWANCE THE ASSESSEE S CLAIM ON W ORKER S WAGES AT RS.51 84 255/ - . 3. THE CIT(A) HAS REVE RS ED THE ASSESSING OFFICER S DISALLOWING BY OBSERVING THAT THERE IS NO DISPUTE ABOUT GENUI NE NESS OF THE IMPUGNED WAGES CLAIMED NO EVIDENCE OF INVOLVEMENT OF ANY LABOUR CONTRACTOR IS FORTHCOMING AND T HE IMPUGNED WAGES HAVE BEEN PAID DIRECTLY TO THE ASSESSEE S WORKERS WITHOUT ANY EVIDENCE TO INFER OTHERWISE TO INVOKE SECTION 40(A)(IA) DISALLOWANCE IN QUESTION. THE ITA NO. 30 06 /AHD/201 1 SURESHSHIP BREAKING PVT. LTD. FOR A.Y. 200 8 - 0 9 - 3 - ASSESSEE HAS SUCCEEDED IN THE LOWER APPELLATE ORDER. THIS LEAVES THE REVENUE AGGRIEVED. 4 . THE CASE HAS BEEN CALLED TWICE. THE REVENUE IS PRESENT THROUGH ITS DEPARTMENTAL REPRESENTATIVE. THE REGISTRY HAS SENT AN RPAD NOTICE ON 17.3.2015. THE SAME HAS BEEN RETURNED BACK UNSERVED. IN THESE CIRCUMSTANCES WE PROCEED EXPARTE AGAINST THE ASSESSEE. 5. THE REVENUE HAS STRONGLY CONTESTED FOR RESTORATION OF THE IMPUGNED SECTION 40(A)(IA) DISALLOWANCE RELATING TO ASSESSEE S WORKERS FOR NON DEDUCTION OF TDS. WE HAVE ALREADY NARRATED THE RELEVANT FACTS IN THE PRECEDING PARAGRAPHS. THE ASSESSEE HAS PAID W AGES TO ITS WORKERS ON SUCCESSFUL COMPLETION OF THE WORK ASSIGNED. THE REVENUE ARGUES THAT THE SAID WORKERS IN THE NATURE OF DAILY WAGES COULD NOT HAVE SURVIVE WITHOUT GETTING SALARY AT REGULAR INTERVALS. HOWEVER WE DO NOT FIND ANY IOTA OF DISCUSSION IN T HE ASSESSMENT ORDER CHALLENGING GENUINENESS OF THE IMPUGNED WAGES. NOR IS ANY FACTUAL EVIDENCE PRODUCED BEFORE US AT THIS SECOND APPELLATE STAGE. THERE IS ALSO NO MATERIAL PIN POINTING INVOLVEMENT OF ANY LABOUR CONTRACTOR IN THE ASSESSEE S PAYMENT. ONCE TH E ASSESSEE HAS CLAIMED TO HAVE PAID THE WAGES TO ITS WORKERS WITHOUT INVOLVEMENT OF ANY CONTRACTOR AND ALL WE OBSERVE THAT THE SAME ARE NOT CONTRACTUAL PAYMENTS U/S.194C BUT THEY COME UNDER SECTION 192 OF THE ACT. IT IS NOT THE REVENUE S CASE THAT THESE P AYMENTS EXCEED THE EXEMPTION REMITS PERTAINING TO THE IMPUGNED ASSESSMENT YEAR IN ITA NO. 30 06 /AHD/201 1 SURESHSHIP BREAKING PVT. LTD. FOR A.Y. 200 8 - 0 9 - 4 - ANY INDIVIDUAL CASE. WE MAKE IT CLEAR THAT SECTION 192C IS A SPECIFIC PROVISION WHICH EXCLUDES OPERATION OF SECTION 194C OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE HEREINABOVE. THUS WE AFFIRM THE CIT(A) FINDINGS. THE REVENUE S GROUNDS ARE REJECTED. 6. THE REVENUE S APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON THIS DAY THE 30 TH APRIL 201 5 AT AHMEDABAD. SD/ - SD/ - ( PRAMOD KUMAR ) ( S.S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED / 0 4 / 20 1 5 PRABHAT KR. KESARWANI SR. P . S . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III AHMEDABAD 5. / DR ITAT AHMEDABAD 6. / GUARD FILE . / BY ORDER / ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD