M/s S.M.Agarwal & co., v. I.T.O.,

ITA 5/RAN/2014 | 2006-2007
Pronouncement Date: 25-11-2014

Appeal Details

RSA Number 525114 RSA 2014
Assessee PAN AABFM9006D
Bench Ranchi
Appeal Number ITA 5/RAN/2014
Duration Of Justice 10 month(s) 19 day(s)
Appellant M/s S.M.Agarwal & co.,
Respondent I.T.O.,
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2014
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 25-11-2014
Assessment Year 2006-2007
Appeal Filed On 06-01-2014
Judgment Text
1 | P AG E I T A N O . 0 5 / R A N / 1 4 M / S S M A G A R W A L & C O . INCOME TAX APPELLATE TRIBUNAL CIRCUIT BENCH RANCHI BEFORE HON'BLE SHRI H.L. KARWA PRESIDENT AND HON'BLE SHRI B.R. BASKARAN ACCOUNTANT MEMBER ITA NO. 05 /RAN/201 4 A.Y 2006 - 07 M/S. S.M AGARWAL & CO. VS. I.T.O WA RD 3(2) JSR PAN:AABFM9006D ( APPELLANT ) ( RESPONDENT ) FOR THE APPELLANT : S/ SHRI S.K PODDAR & M.K CHOUDHARY ADVOCATE S LD.AR S FOR THE RESPONDENT : SHRI RAKESH KR.DAS JCIT/LD. DR DATE OF HEARING : 2 5 - 11 - 2014 DATE OF PRONOUNCEMENT: 25 - 11 - 2014 ORDER SHRI B.R. BASKARAN ACCOUNTANT MEMBER : THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 28.11.2013 PASSED BY LD CIT(A) JAMSHEDPUR AND IT RELATES TO THE ASSESSMENT YEAR 2006 - 07. THE ASSESSEE IS AGGRIEVE D BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ORDER PASSED BY THE AO U/S 154 OF THE ACT ON A DEBATA B LE ISSUE. 2. THE LD A.R SUBMITTED THAT THE ASSESSMENT IN THE HANDS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION WAS COMPLETED U/S 143(3) OF THE ACT ON 05 - 06 - 2008. THE ASSESSEE HAD INCURRED A SUM OF RS.1 88 88 920/ - ON TRUCK TRAILOR HIRE CHARGES AND THE AO NOTICED THAT THE ASSESSEE HAD PAID SUMS EXCEEDING RS.20 000/ - TO MANY PERSONS AND SUCH PAYMENTS AGGREGATED TO RS.46 69 101/ - . THE ASSESSEE HAD NOT DEDUCTED TAX AT SOURCE FROM THE SAID PAYMENTS U/S 194C OF THE ACT. THE AO ALSO DID NOT DISALLOW THE SAID AMOUNT U/S 40(A)(IA) OF THE ACT IN THE ORIGINAL ASSESSMENT PROCEEDIDNGS. HENCE THE AO INITIATED RECTIFICATION 2 | P AG E I T A N O . 0 5 / R A N / 1 4 M / S S M A G A R W A L & C O . PROCEEDINGS U/S 154 OF THE ACT AND DISAL LOWED RS.46 69 101/ - U/S 40(A)(IA) OF THE ACT. THE AO ALSO NOTICED THAT THERE WERE MISTAKES IN MAKING TWO OTHER ADDITIONS I.E. THE DISALLOWANCE WAS PROPOSED AT RS.35 000/ - AND RS.30 000/ - RESPECTIVELY IN RESPECT OF TWO ITEMS BUT IN THE COMPUTATION THE AMOUNT WAS WRONGLY ADDED AS RS.25 000/ - AND RS.20 000/ - . ACCORDINGLY THE AO ADDED RS.20 000/ - (RS.10 000/ - X 2) TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEE DID NOT GET RELIEF BEFORE LD CIT(A). 3. ACCORDING TO LD A.R THE ISSUE OF APPLICATION OF PROVISIONS OF SEC. 194C ON TRUCK TRAILOR HIRE CHARGES IS A DEBATABLE ISSUE AND HENCE THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ASSESSING THE SAME IN RECTIFICATION PROCEEDINGS U/S 154 OF THE ACT. 4. WE HEARD LD D.R ALSO ON THIS ISSUE. WE FIND MERI T IN THE CONTENTIONS OF THE LD A.R. THE QUESTION WHETHER THE PROVISIONS OF SEC 194C SHALL APPLY TO THE PAYMENTS MADE FOR HIRING VEHICLES IS A DEBATABLE ISSUE SINCE MERE HIRING OF VEHICLES DOES NOT INVOLVE CARRYING ON OF ANY WORK. IN FACT THE HON BLE MA DRAS HIGH COURT IN THE CASE OF POOMPUHAR SHIPPING CORPORATION (282 ITR 3) HAS HELD THAT THE HIRE CHARGES PAID FOR TAKING TEMPORARY POSSESSION OF SHIPS WILL NOT BE HIT BY THE PROVISIONS OF SEC. 194C OF THE ACT. IT IS A WELL SETTLED PRINCIPLE OF LAW THAT THE ASSESSING OFFICER IS NOT EMPOWERED TO INITIATE RECTIFICATION PROCEEDINGS U/S 154 OF THE ACT IN RESPECT OF THE DEBATABLE ISSUES. WE FIND SUPPORT FOR THIS VIEW FROM THE DECISION OF HON BLE JURISDICTIONAL JHARKHAND HIGH COURT IN THE CASE OF CIT VS. M/S TA TA YODOGAWA LTD (2013)(351 ITR 379). HENCE THE IMPUGNED REVISION ORDER ON THE ADDITION MADE U/S 40(A)(IA) OF THE ACT IS LIABLE TO BE SET ASIDE. ACCORDINGLY WE SET ASIDE THE ORDER OF LD CIT(A) ON THE ADDITION MADE UNDER SEC. 40(A)(IA) OF THE ACT AND DIR ECT THE ASSESSING OFFICER TO DELETE THE ADDITION SO MADE IN THE RECTIFICATION PROCEEDINGS. 3 | P AG E I T A N O . 0 5 / R A N / 1 4 M / S S M A G A R W A L & C O . 5. WITH REGARD TO THE TWO ADDTIONS OF RS.10 000/ - EACH WE NOTICE THAT THE ASSESSING OFFICER HAS ONLY CORRECTED THE MISTAKES APPARENT FROM THE RECORD. ACCORDINGLY WE CONFIRM THE ORDER OF LD CIT(A) IN RESPECT OF THE ABOVE SAID TWO ADDITIONS. 6. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 - 11 - 2014 SD/ - SD/ - [ H.L. KARWA ] [ B.R. BASKARAN ] PRESIDENT ACCOUNTANT MEMBER DT. 25 - 11 - 2014 PLACE : RANCHI PP SR. PS COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT : M/S. S.M AGARWALA & CO. 1263 SHOP LINE SONARI JSR 2 THE RESPONDENT: THE I TO W 3(2) JSR 3..THE C IT 4.THE CIT(A) 5.DR ITAT CIRCUIT BENCH RANCHI 6. GUARD FILE. TRUE COPY BY ORDER ASSTT. REGISTRAR 4 | P AG E I T A N O . 0 5 / R A N / 1 4 M / S S M A G A R W A L & C O . 1 . DATE OF DICTATION .............2 5 - 11 - 2014 /26 - 11 - 14 DICTATED ON MEMBER S LAPTOP ....................... 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ........................OTHER MEMBER .......27 - 11 - 2014........................ 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. ..................... 4. DATE ON WHICH THE FAIR ORD ER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT..................................2 5 - 11 - 2014................................................... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S ................ 6. DATE ON WHICH THE F ILE GOES TO THE BENCH CLERK ....................................... 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ......................................... 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ........ ......................................................................................... 9. DATE OF DESPATCH OF THE ORDER ..............................................................