M/s. Gujarat Roadlines, Ahmedabad v. The Income tax Officer,Ward-9(4),, Ahmedabad

ITA 3023/AHD/2008 | 2005-2006
Pronouncement Date: 30-03-2012 | Result: Allowed

Appeal Details

RSA Number 302320514 RSA 2008
Assessee PAN AABFC3914A
Bench Ahmedabad
Appeal Number ITA 3023/AHD/2008
Duration Of Justice 3 year(s) 7 month(s) 5 day(s)
Appellant M/s. Gujarat Roadlines, Ahmedabad
Respondent The Income tax Officer,Ward-9(4),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 30-03-2012
Date Of Final Hearing 16-03-2012
Next Hearing Date 16-03-2012
Assessment Year 2005-2006
Appeal Filed On 25-08-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE SHRI MUKUL KR. SHRAWAT JM AND SHRI A. MOHA N ALANKAMONY AM) ITA NO.3023/AHD/2008: A. Y.: 2005-06 GUJARAT ROADLINES GLR BUILDING OUTSIDE ASTODIA GATE AHMEDABAD PA NO. AABFC 3914A VS THE INCOME TAX OFFICER WARD 9 (4) AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY MRS. URVASHI SHODHAN AR RESPONDENT BY SHRI B.L. YADAV SR. DR DATE OF HEARING: 16-03-2012 DATE OF PRONOUNCEMENT: 30-03-2012 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF THE LEARNED CIT(A)-XV AH MEDABAD DATED 22 ND JULY 2008 FOR ASSESSMENT YEAR 2005-06 IN APPEAL NO . CIT(A)- XV/DCIT/WD.9/135/07-08 ON THE FOLLOWING GROUNDS: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) XV HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE I N FRAMING AN APPELLATE ORDER FOR AY 2005-06 ON 22.07.2008. ITA NO.3023/AHD/2008 (AY 2005-06)): M/S. GUJARAT RO ADLINES VS ITO 9(4) AHMEDABAD 2 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) XV AHMEDABAD HAS ERRED IN CONFIRMING THE ADDITION O F RS.7 57 740/- OUT OF FREIGHT EXPENSES U/S. 40 (1) (IA) OF THE I.T. ACT. 2. BRIEFLY THE FACTS OF THE CASE AS EMERGED FROM T HE ORDER OF THE LEARNED CIT(A) ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF GOODS TRANSPORTATION SERVICES. DURING THE YEAR UNDE R CONSIDERATION THE HAS SHOWN GROSS FREIGHT RECEIPT OF RS.2 15 74 829/- . THE ASSESSEE AGAINST THIS FREIGHT RECEIPT HAS SHOWN LORRY HIRE CHARGES OF RS.87 86 780/-. THE ASSESSEE WAS ASKED BY THE AO TO FURNISH DETAILS OF DEDUCTION OF TAX ON PAYMENT OF LORRY HIRE CHARGES. THE ASSESSEE FURNISHED A CHART OF PAYMENT OF FREIGHT ABOVE RS.20 000/- IN SINGLE LR AND STATED THAT IT DEDUCTED TAX AT SOURCE ON SUCH P AYMENT AND ALSO FURNISHED COPIES OF CHALLAN OF PAYMENT OF TDS. THE AO FOUND THAT FOR PART OF THE LORRY CHARGES THE ASSESSEE DID NOT PAY TDS. THEREFORE THE AO ASKED THE ASSESSEE TO FURNISH THE DETAILS OF LOR RY CHARGES ON WHICH TDS HAS NOT BEEN PAID BY THE ASSESSEE. THE ASSESSEE ADMITTED THAT NO TDS HAD BEEN FOR SMALL PAYMENTS TO TRUCK OWNERS AND THAT NO SINGLE TRUCK OWNER HAD BEEN PAID MORE THAN RS.50 000/- DUR ING THE YEAR. FROM THE DATA PREPARED BY THE ACCOUNTANT OF THE ASSESSEE IT WAS SEEN BY THE AO THAT EVEN THOUGH PAYMENTS OF EACH INDIVIDUAL TRU CK ON EVERY OCCASION WAS LESS THAN RS.20 000/- THE AGGREGATE P AYMENTS EXCEEDED RS.50 000/- IN SEVERAL CASES AND THAT THE ASSESSEE FAILED TO PAY TDS ON A TOTAL AMOUNT OF RS.35 30 310/-. THE ASSESSEE SUBM ITTED BEFORE THE AO THAT FOR MAKING DELIVERY OF GOODS OF THE CUSTOMERS EMPLOYEES OF THE ASSESSEE FROM VARIOUS BRANCHES MADE CONTACT TO LOCA L DRIVERS OR AGENTS AND FOR THIS SERVICES NO SEPARATE AGREEMENT WAS ENT ERED AND PAYMENTS WERE MADE TO THE RESPECTIVE DRIVERS OF THE TRUCKS. IT WAS ALSO SUBMITTED THAT NO PAYMENT HAS BEEN MADE TO CROWN ROADWAYS OR SHREE SHANKAR ITA NO.3023/AHD/2008 (AY 2005-06)): M/S. GUJARAT RO ADLINES VS ITO 9(4) AHMEDABAD 3 ROAD LINES AND THAT IN VIEW OF THIS EACH PAYMENT IS OUT SIDE THE PROVISIONS OF THE IT ACT AND HENCE NO TAX WAS DEDUC TED BY THE ASSESSEE ON SUCH PAYMENTS. THE ASSESSEE HAS ALSO RELIED ON C BDT CIRCULAR NO.715 DATED 08-08-1995. REGARDING PAYMENT OF RS.35 30 310/- IT WAS SUBMITTED BY THE ASSESSEE THAT (I) THERE WERE AS MA NY AS 610 PAYMENTS AND FOR EACH PAYMENT THERE WAS SEPARATE GR/LORRY CH ALLAN (II) THE AMOUNT OF ANY SINGLE SUM CREDITED OR PAID TO THE TR UCK DRIVER/AGENT HAS NOT EXCEEDED TO RS.20 000/- (III) THE AGGREGATE OF AMOUNT OF SUCH PAYMENT DURING THE FINANCIAL YEAR DID NOT EXCEED TO RS.50 000/- AND THAT (IV) PAYMENT WAS MADE TO TRUCK DRIVERS FOR EAC H TRIPS AND GOODS WERE TRANSPORTED AT ONE TIME AND THERE WAS NO CONTR ACT FOR A SPECIFIC PERIOD OR QUANTITY FOR THE GOODS TO BE TRANSPORTED AND FURTHER SUBMITTED THAT NO DISALLOWANCE U/S 40(1) (IA) OF THE IT ACT B E MADE. 2.1 THE AO ALSO NOTED THAT OUT OF RS.35 30 310/- A SUM OF RS.24 79 780/- REPRESENTED PAYMENT BELOW RS.50 000/ - AND SINCE PROVISO TO SECTION 194 C(3) OF THE IT ACT IS APPLIC ABLE WITH EFFECT FROM 1-10-2004 THE ASSESSEE IS LIABLE TO DEDUCT TAX ON SUCH PAYMENTS AFTER 1-10-2004 IF THE AGGREGATE IS EXCEEDING RS.50 000 /- IN EACH CASE. ACCORDINGLY THE AO MADE THE ADDITION OF RS.7 57 74 0/- U/S 40 (1) (IA) OF THE IT ACT. 2.2 BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE THE LEARNED CIT(A). IT WAS SUBMITTED BEFORE THE LEA RNED CIT(A) BY THE LEARNED AR OF THE ASSESSEE THROUGH WRITTEN THAT THE PAYMENTS WERE MADE TO DRIVERS OR RESPECTIVE TRUCKS AND FOR EACH S UCH DELIVERY SEPARATE LORRY HIRE CHALLAN WAS PREPARED. EVERY TIME EITHER TRUCKS WERE DIFFERENT OR TRUCK DRIVERS WERE DIFFERENT. IT WAS MERELY TO KEEP REFERENCE AS TO THROUGH WHOM CONTACT WAS MADE THE NAME WAS WRITTEN AND THAT NEITHER ANY CASE NO PAYMENT WAS MADE TO CROWN ROADWAYS OR S HREE SHANKAR ITA NO.3023/AHD/2008 (AY 2005-06)): M/S. GUJARAT RO ADLINES VS ITO 9(4) AHMEDABAD 4 ROADLINES NOR ANY AGREEMENT WAS EXECUTED FOR EACH L ORRY HIRE CHALLAN WHICH WAS A SEPARATE CONTRACT. IT WAS UNDER THIS FA CTS AND MODUS OPERANDI PLEADED THAT EACH PAYMENT WAS OUTSIDE THE PURVIEW OF THE PROVISIONS OF THE IT ACT AND HENCE NO TAX WAS DEDU CTED AT SOURCE. THE LEARNED CIT(A) CONSIDERING THE SUBMISSION OF THE A SSESSEE HELD THAT THE ASSESSEE DID NOT DEDUCT ANY TDS ON FRIGHT EXPEN SES OF RS.7 57 740/- AND CONFIRMED THE ADDITION MADE BY TH E AO. 3. BEING AGGRIEVED AND DISSATISFIED WITH THE ABOVE FINDINGS OF THE LEARNED CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US . 3.1 BEFORE US THE LEARNED AR REITERATED HER SUBM ISSIONS MADE BEFORE THE AUTHORITIES BELOW AND PRODUCED COPY OF THE WRIT TEN SUBMISSION PRODUCED BEFORE THE LEARNED CIT(A) ALONG WITH A COP Y OF THE DETAILS OF DELIVERY OF GOODS AND PAYMENTS MADE THEREOF. SHE AL SO REFERRED TO CLARIFICATIONS ON VARIOUS PROVISIONS RELATING TO TA X DEDUCTION AT SOURCE REGARDING CHANGE INTRODUCED THROUGH FINANCE ACT 19 95. THE LEARNED AR FURTHER RELIED ON THE DECISION OF THE ITAT BANGA LORE B BENCH IN ITA NO.665/BANG/2010 DATED 21-01-2011. THE LEARNED AR SUBMITTED THAT THE ASSESSEE HAD ONLY HIRED VEHICLES ALONG WITH DRI VER IN ORDER TO TRANSPORT GOODS OF ITS CLIENT. THEREFORE PROVISION S OF TDS ARE NOT APPLICABLE TO IT. SHE FURTHER ARGUED THAT WHEREVER PROVISION OF TDS WAS APPLICABLE TAX WAS DEDUCTED AND PAID PROMPTLY. SHE FURTHER SUBMITTED THAT THE ASSESSEE HAD COOPERATED WITH THE REVENUE I N THE ASSESSMENT STAGE BY FURNISHING DETAILS OF THE TRUCK OWNERS IN EVERY CASE AND IT WAS EVIDENT THAT THE ASSESSEE HAD ONLY HIRED THE VEHICL ES FOR ITS USE. THEREFORE IT WAS HUMBLY PRAYED THAT THE ADDITION M ADE U/S 40(A) (IA) OF THE IT ACT FOR RS.7 57 740/- MAY BE DELETED. THE LE ARNED DR ON THE OTHER HAND RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. ITA NO.3023/AHD/2008 (AY 2005-06)): M/S. GUJARAT RO ADLINES VS ITO 9(4) AHMEDABAD 5 4. WE HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND CONSIDERED THE MATERIAL ON RE CORD. ON PERUSING THE ASSESSMENT ORDER IT IS EVIDENT THAT THE ASSESSE E HAD HIRED THE VEHICLES IN ORDER TO TRANSPORT THE GOODS OF ITS CLI ENTS. THE ASSESSEE APPARENTLY IS A TRANSPORT CONTRACTOR WHO TRANSPORTS THE GOODS OF ITS CLIENTS TO THE DESTINATION PREFERRED BY THE CLIENTS . IN ORDER TO CARRY OUT SUCH WORK THE ASSESSEE ENGAGES TRUCKS OF VARIOUS OT HER ORGANIZATIONS AND TRUCK OWNERS BY HIRING OF THE VEHICLES ALONG WI TH THE INFRASTRUCTURE. THUS THE WORK OF TRANSPORTATION HAS BEEN CARRIED O UT BY THE ASSESSEE AND NOT BY THE OWNERS OF THE TRUCKS. THE OWNERS OF THE TRUCKS HAD ONLY HIRED THEIR VEHICLES TO THE ASSESSEE BY RECEIVING H IRE CHARGES WHILE AS THE WORK OF TRANSPORTATION HAS BEEN CARRIED ON BY T HE ASSESSEE. THE RISK AND REWARD FOR THE PERFORMANCE OF THE JOB LIES WITH THE ASSESSEE AND NOT WITH THE OWNERS OF THE TRUCKS. IN SUCH CIRCUMSTANC ES PROVISIONS OF SECTION 194 C OF THE IT ACT WILL NOT BE ATTRACTED A ND CONSEQUENTLY PROVISIONS OF SECTION 40(A) (IA) OF THE IT ACT ALSO NOT APPLICABLE. SECTION 194 C OF THE IT ACT REQUIRES TDS ON PAYMENTS TO CON TRACTOR FOR WORK. WHERE AN ASSESSEE UTILIZES THE TRUCKS TAKEN ON HIRE FOR ITS OWN USE THERE IS NO AGREEMENT FOR CARRYING OUT ANY WORK BY THE OWNER TO THE HIRER. THERE IS NO SCOPE IN SUCH CASE FOR APPLICATION OF SEC.194C WHICH IS APPLICABLE TO PAYMENTS TO TRANSPORTER FOR CARRYING OF GOODS. IT WAS SO HELD IN THE CASE OF DCIT VS SATISH AGARWAL & CO. 3 17 ITR (AT) 196 (AMRITCHAR). IN HOLDING SO THE TRIBUNAL HAD ALSO R ELIED ON THE DECISION IN THE CASE OF CIT VS POOMPUHAR SHIPPING CORPORATION L TD. 282 ITR 3. ON PERUSING THE ASSESSMENT ORDER THE DECISIONS CITED BY THE LEARNED AR AND FROM HER ARGUMENTS WE DO NOT HAVE ANY HESITATI ON TO HOLD FROM THE FACTS AND CIRCUMSTANCES OF THIS CASE THAT THE ASSES SEE HAS ONLY HIRED THE VEHICLES FOR CARRYING OUT ITS JOB OF TRANSPORTA TION OF GOODS FOR ITS ITA NO.3023/AHD/2008 (AY 2005-06)): M/S. GUJARAT RO ADLINES VS ITO 9(4) AHMEDABAD 6 CLIENTS AND THEREFORE THE ADDITION MADE BY THE LEA RNED AO FOR RS.7 57 740/- DESERVES TO BE DELETED. IT IS ORDERED ACCORDINGLY. 5. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF MARCH 2012 SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR ITAT AHMEDABAD