M/s. Shree Choudhary Transport Company, JODHPUR v. ITO, JODHPUR

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR B EFORE SHRI S.V. MEHROTRA ACCOUNTANT MEMBER AND SHRI V. D. RAO JUDICIAL MEMBER ITA NO: 308 / JU / 2010 ASSTT. YEAR: 2007-08 M/S SHRI CHODHARY TRANSPORT COMPANY VS I.T.O. WA RD-1 (4) JODHPUR. E-119 120 KALPTRU SHOPPING CENTRE JODHPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.L. KHATRI A.R. RESPONDENT BY: SHRI NARENDRA GOUR C.I.T. D.R. ORDER PER V. D. RAO: JM 1. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAIN ST THE ORDER OF THE CIT (APPEALS) JODHPUR DATED 13-04-2010 FOR THE ASS ESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL BEFORE THE TRIBUNAL. 2 2 GROUNDS OF APPEAL: 1. THAT LD. CIT (APPEALS) HAS GROSSLY ERRED IN THE FAC TS AND IN THE LAW WHILE CONFIRMING THE DISALLOWANCE OF RS. 1 15 8 0 790/- U/S 40(A) (IA) OF THE I.T.ACT. 1 (A) THAT LD. CIT (APPEALS) HAS GROSSLY ERRED IN LAW WHILE INVOKING THE PROVISION OF SECTION 40(A) (IA) OF THE I.T. ACT PARTICULARLY WHEN APPELLANT WAS NOT LIABLE TO DEDUCT THE TDS U/S 194(C) OF THE I.T. ACT AS THE PAYMENTS OF FREIGHT WAS MADE TO SMALL TRUCK OWNER AND APPELLANT COLLECTED FORM 15 I AS REQUIRED U/S 194 (C) (3) OF THE I.T. ACT IN THE PARTICULAR CIRCUMSTANCES OF THE CASE. 1(B) THAT LD. CIT (APPEALS) HAS ERRED IN LAW & FACT S WHILE IGNORING THE FACT THAT PROVISIONS OF SECTION 194 (C) OF THE I.T. ACT 1961 WAS NOT APPLICABLE ON THE APPELLANT IN ABSENCE OF POSITIVE EVIDENCE OF CONTRACTOR SUB CONTRACTOR RELATIONSHIP PARTICULARL Y 3 3 IN TRANSPORTATION BUSINESS AS HELD BY HONBLE ITA T HONBLE HIGH COURTS IN A NUMBER OF CASES. 3. THE FACTS ARE IN BRIEF THAT THE ASSESSEE IS A FI RM AND ENGAGED IN TRANSPORTING THE CEMENT FROM ADITYA CEMENT LTD S HAMBHUPURA DISTRICT CHITTORGARH TO VARIOUS PLACES. THE FIR M HAS ITS HEAD OFFICE AT JODHPUR AND BRANCH OFFICE AT SHAMBHUPURA. THE ASSE SSEE FIRM DID NOT OWN ANY TRUCK OF ITS OWN AND THUS HIRED THE TRUCKS FROM DIFFERENT TRANSPORTERS / TRUCK OPERATORS FOR THE PURPOSE OF T RANSPORTING THE CEMENT. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE WHILE MAKING THE PAYMENTS TO TRUCK OPERATORS / OWNERS THE ASSESSEE HAS NOT DEDUCTED THE TDS THOUG H THE SINGLE PAYMENT EXCEEDS RS. 20 LACS AND THEREBY A VIOLATIN G THE PROVISIONS OF SECTION 194 C OF THE ACT. WHEN THE ASSESSING OFFIC ER ASKED THE ASSESSEE TO EXPLAIN THE REASONS FOR NON-DEDUCTION O F TDS ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT IN RESP ECT OF PAYMENT TO THE EXTENT OF RS. 81 82 800/- FORM NO. 15 I WERE RECE IVED FROM THE TRUCK OPERATORS / OWNERS AND AS SUCH TAX WAS NOT DEDUCTED AT SOURCE. AND IT WAS ALSO SUBMITTED THAT FORM NO. 15 J WAS NOT FILED WITHIN THE PRESCRIBED 4 4 TIME. THE ASSESSING OFFICER BY INVOKING THE SECTIO N 40 (A) (IA) DISALLOWED THE ENTIRE PAYMENT OF RS. 81 52 800/- TO THE TRUCK OPERATORS / TRUCK OWNERS AND SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. WHEN THE MATTER WAS CARRIED BEFORE THE CIT (A) THE LD. CIT (A) BY FOLLOWING THE ASSESSMENT YEAR 2006-07 CONFIRMED THE ORDER OF THE ASSESSING OFFICER. AT THE TIME OF HEARING IT WAS B ROUGHT TO OUR NOTICE THAT THE SIMILAR ISSUES HAS CAME BEFORE THE HONBLE IN THE ASSESSEES OWN CASE I.E. ITA NO.194 / JU / 2009 DATED 22-12-2009 ASSESSMENT YEAR 2006-07 THE TRIBUNAL AS REMITTED THE MATTER BACK T O THE FILE OF THE ASSESSING OFFICER TO EXAMINING THE ISSUE AS FRESH A FTER BEING GIVEN A REASONABLE OPPORTUNITY TO THE ASSESSEE. 5. THE LD. DEPARTMENTAL REPRESENTATIVE HAS SUBMITTE D THAT IN EARLIER YEAR WHETHER THE ASSESSEE HAS RECEIVED THE FORM NO . 15 I IN TIME OR NOT WAS IN DISPUTE. IN THE YEAR UNDER CONSIDERATION TH ERE IS NO SUCH DISPUTE THEREFORE THE ISSUE MAY NOT BE REFERRED TO THE AO FOR EXAMINATION AGAIN. WE HAVE HEARD THE BOTH THE PARTIES WE FIND THAT THE FACTS IN THE UNDER CONSIDERATION SIMILAR TO THE EARLIER YEAR AND THE A SSESSEE ALSO RECEIVED THE FORM NO. 15 I FROM THE TRUCK OPERATORS / TRUCK OWNERS AND NOT 5 5 SUBMITTED FORM NO.15 J IN TIME. THEREFORE IN OUR CONSIDERED OPINION THE ISSUE NEEDS TO BE EXAMINED BY THE ASSESSING OFF ICER. WE THEREFORE BY SETTING ASIDE THE ORDER PASSED BY THE LD. CIT ( A) AND REMIT THE ISSUE TO THE FILE OF THE ASSESSING OFFICER DIRECT THE AS SESSING OFFICER TO DECIDE THE ISSUE AFRESH AS PER LAW AFTER BEING GIVEN REASO NABLE OPPORTUNITY TO THE ASSESSEE. 6. IN SO FAR AS IN RESPECT OF THE PAYMENT MADE TO T HE EXTENT OF RS. 34 27 900/- THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE NEITHER RECEIVED FORM NO.15 I AND NO TDS WAS DEDUCT ED. THE ASSESSING OFFICER DISALLOWED THE ABOVE AMOUNT BY INVOKING SEC TION 40 (A) (IA) OF THE ACT. IN RESPECT OF THE ABOVE AMOUNT THE LD. C IT (A) SIMPLY FOLLOWING THE ASSESSMENT YEAR 2006 - 2007 CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 7. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS RECEIVED FORM NO. 15 I IN RESPECT OF THE AMOUNT OF RS.34 27 900/- AND THE SAME WAS EXPLAINED BEFORE THE LD. CIT (A). THE LD. CIT (A) WITHOUT CONSIDERING THE SUBMISSIONS OF THE ASSESSEE CONFIRMED THE ORDER OF THE ASSESSING OFFICER BY FOLLOWING THE ORDER FOR THE ASSESSMENT YEAR 6 6 2006-2007. ON THE OTHER HAND THE LD. D.R. HAS SUB MITTED THAT THE ASSESSEE HAS NOT RECEIVED FORM NO. 15 I AND FORM NO . 15 J WAS NOT SUBMITTED BEFORE THE ASSESSING OFFICER AND FURTHER SUBMITTED THAT THE ASSESSING OFFICER AND THE LD. CIT (A) HAVE RIGHTLY INVOKED 40 (A) (IA) OF THE ACT. WE AFTER CONSIDERING THE ORDERS OF THE A UTHORITIES BELOW AND ALSO CONSIDERING THE SUBMISSIONS OF THE ASSESSEE F IND THAT THIS ISSUE HAS TO BE DECIDED DE NOVO AFTER VERIFICATION OF THE ENT IRE DETAILS. WE THEREFORE ACCORDINGLY SET ASIDE THE ORDER PASSED B Y THE CIT (A) AND REMIT THE MATER BACK TO THE FILE OF THE ASSESSING O FFICER TO DECIDE THE MATTER AFRESH AFTER GIVING REASONABLE OPPORTUNITY T O THE ASSESSEE. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR THE STATISTICAL PURPOSE. 9. ORDER PRONOUNCED IN THE OPEN COURT DATED ON 9 TH FEBRUARY 2011. SD/- SD/- (S.V. MEHROTRA) (V. D. RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 09-02-2011 KAMAL KUMAR COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE CIT (A)/TH E D.R.