ACIT CIR 6(1), MUMBAI v. BLR INDIA P. LTD, MUMBAI

ITA 5793/MUM/2010 | 2006-2007
Pronouncement Date: 16-11-2011 | Result: Dismissed

Appeal Details

RSA Number 579319914 RSA 2010
Assessee PAN AAACB3002G
Bench Mumbai
Appeal Number ITA 5793/MUM/2010
Duration Of Justice 1 year(s) 4 month(s)
Appellant ACIT CIR 6(1), MUMBAI
Respondent BLR INDIA P. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 16-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 16-11-2011
Assessment Year 2006-2007
Appeal Filed On 16-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B : MUMBAI BEFORE SHRI D. MANMOHAN (VICE PRESIDENT [MZ]) AND SHRI RAJENDRA SINGH (ACCOUNTANT MEMBER) ITA NO.5793/MUM/2010 ASSESSMENT YEAR : 2006-07 DY. COMMISSIONER OF INCOME TAX CIRCLE-6(1) ROOM NO.506 5 TH FLOOR AAYAKAR BHAVAN MK ROAD MUMBAI-400 020. ..( APPELLANT ) VS. M/S. BLR INDIA PVT. LTD. 39 FANCY CHAMBERS 94 SURAT STREET MASJID (E) MUMBAI-9. ..( RESPONDENT ) P.A. NO. (AAACB 3002 G) APPELLANT BY : SHRI S.C. TIWARI AND MS. NATASHA MANGAT RESPONDENT BY : SHRI P. K.B. MENON DATE OF HEARING : 9.11.2011. DATE OF PRONOUNCEMENT : 16 TH NOVEMBER 2011 O R D E R PER RAJENDRA SINGH (AM). THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDE R DATED 9.1.2009 OF CIT(A) FOR THE ASSESSMENT YEAR 2006-07. TH E ONLY DISPUTE RAISED IN THIS APPEAL IS REGARDING DISALLOWANCE O F EXPENSES UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT. ITA NO.5793/M/10 A.Y:06-07 2 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE WHO WAS ENGAGED IN THE BUSINESS OF TRANSPORT HAD MADE PAYMENTS AS LORRY HIRE CHARGES ON WHICH TAX WAS REQUIRED TO BE DEDUCTED. THE A SSESSEE HAD DEDUCTED THE TAX BUT AO NOTED THAT THERE WAS SHORTFALL IN DEDUCTION OF TAX AMOUNTING TO RS.43 407/- IN RELATION TO THE AGGR EGATE PAYMENT OF LORRY HIRE CHARGES OF RS.47 97 510/-. THE DETAILS OF SH ORTFALL COMPUTED BY AO WERE AS UNDER :- NATURE OF PAYMENT AMOUNT PAID TDS TO BE DEDUCTED TDS DEDUCTED SHORTFALL LORRY HIRE CHARGES 3 34 26 624 2 88 134 2 47 053 41 082 ADVERTISEMENT 6 08 057 13 506 12 209 1 297 COURIER CHARGES 42 345 939 849 90 PRINTING AND STATIONERY 1 11 414 2 274 1 887 387 TYRE PURCHASED 21 149 431 259 172 REPAIRS AND MAINTENANCE 1 49 349 3 345 3 024 321 LEGAL & PROFESSIONAL CHARGES 2 000 100 41 59 TOTAL 3 43 60 938 3 08 729 2 65 322 43 408 SINCE THE TAX HAD NOT BEEN FULLY DEDUCTED IN RESPECT O F LORRY HIRE CHARGES PAID BY THE ASSESSEE THE AO DISALLOWED THE CORRESP ONDING LORRY HIRE CHARGES AMOUNT OF RS.47 97 510/- UNDER SECT ION 40(A)(IA) OF THE ACT. ITA NO.5793/M/10 A.Y:06-07 3 2.1 THE ASSESSEE DISPUTED THE DECISION OF THE AO AND SUBMIT TED BEFORE CIT(A) THAT THE ASSESSEE WAS HAVING MORE THAN 65 BRANCHES SPREAD ALL OVER THE COUNTRY AND THEREFORE VOLUMINOUS H IRE CHARGES CHALLANS WERE REQUIRED TO BE PREPARED MANUALLY. THUS THERE WAS BOUND TO BE SOME CALCULATION ERROR OR ROUNDING OFF ERR OR. IT WAS POINTED OUT THAT THERE WERE 1849 TRANSACTIONS INVOLVIN G SHORT DEDUCTION OF TAX OUT OF WHICH IN CASE OF 1228 TRANSACTION S THE SHORT DEDUCTION WAS LESS THAN RS.10/- IN EACH CASE AND IN MANY CA SES THE SHORTFALL WAS LESS THAN RS.1/- . THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD DEDUCTED TAX BUT THERE WAS SMALL SHORTFALL DUE TO CLERICAL ERROR. IT WAS ACCORDINGLY REQUESTED THAT DISALLOWANCE SH OULD BE CANCELLED. CIT(A) WAS SATISFIED BY THE EXPLANATION GIVE N AND HAVING REGARD TO THE SMALLNESS OF THE AMOUNTS INVOLVED HE OBSE RVED THAT THERE WAS NO SERIOUS DEFAULT BY THE ASSESSEE AND ACCORDINGL Y DIRECTED THE AO TO DELETE THE ADDITION MADE AGGRIEVED BY WH ICH THE REVENUE IS IN APPEAL. 3. BEFORE US THE LD. AR FOR THE ASSESSEE REITERATED TH E SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. IT WAS ALSO SUBMI TTED THAT PROVISIONS OF SECTION 40(A)(IA) WERE APPLICABLE ONLY WHE N TAX WAS NOT DEDUCTED AT ALL OR AFTER DEDUCTION HAD NOT BEEN PAID. THE PROVISIONS WOULD NOT APPLY TO CASES WHERE THERE WAS SHORTFALL IN DE DUCTION. HE ITA NO.5793/M/10 A.Y:06-07 4 PLACED RELIANCE ON THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. CHANDABHOY AND JASSOBHOY IN ITA NO.20/MUM/10 AND THE DECISION OF THE KOLKATTA BENCH OF THE TRIBUNAL IN THE CASE OF M/S. S.K. TEKRIWAL IN ITA NO.1135/KOL/2010. THE LD. DR ON THE OTHER HAND PLACED RELIANCE ON THE ORDER OF AO. 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING DISALLO WANCE OF LORRY HIRE CHARGES UNDER SECTION 40(A)(IA) ON ACCOUNT OF SHORT D EDUCTION OF TAX AT SOURCE. UNDER THE SAID PROVISIONS ANY AMOUNT PA YABLE TO A CONTRACTOR OR SUB-CONTRACTOR BEING A RESIDENT FOR CARRY ING OUT ANY WORK INTEREST COMMISSION BROKERAGE RENT ROYALTY ETC. IN RESPECT OF WHICH TAX WAS DEDUCTIBLE AT SOURCE BUT SUCH TAX HAD NOT BE EN DEDUCTED OR AFTER DEDUCTION HAD NOT BEEN PAID TO CENTR AL GOVT. WILL NOT BE ALLOWABLE AS DEDUCTION. THE MUMBAI BENCH OF T HE TRIBUNAL IN CASE OF M/S. CHANDABHOY AND JASSOBHOY IN ITA NO.20/MUM/ 10 (SUPRA) AND THE KOLKATTA BENCH OF THE TRIBUNAL IN TH E CASE OF M/S. S.K. TEKRIWAL IN ITA NO.1135/KOL/2010 (SUPRA) HAVE HELD THAT PROVISIONS OF SECTION 40(A)(IA) WOULD APPLY ONLY IN CASE OF NON DEDUCTION OF TAX AND NOT IN CASE OF SHORT DEDUCTION OF T AX. THE TRIBUNAL HAS ALSO HELD THAT IN CASE OF SHORT DEDUCTION OF TAX THE ASSESSEE COULD BE DECLARED IN DEFAULT UNDER THE PROVISIONS OF SECTION 201 AND CORRESPONDING TAX ALONG WITH INTEREST COULD BE COLLECTED FROM ITA NO.5793/M/10 A.Y:06-07 5 THE ASSESSEE. THEREFORE IN VIEW OF THE AFORESAID DECISIO NS NO DISALLOWANCE IS REQUIRED TO BE MADE UNDER SECTION 40(A) (IA). MOREOVER WE ALSO NOTE THAT IN THIS CASE THE ASSESSEE HAD D EDUCTED TAX BUT THERE WERE SMALL AMOUNTS OF SHORTFALL WHICH IN MANY CASES ARE LESS THAN RS.10 IN EACH CASE AND IN SOME CASES LESS THAN RS.1/-. THEREFORE PLEA OF THE ASSESSEE THAT THE SHORTFALL WAS ON LY BECAUSE OF SOME CLERICAL ERROR OR ROUNDING OFF ERROR HAS TO BE ACCEP TED AS REASONABLE. WE THEREFORE SEE NO CASE FOR MAKING ANY DISALLOWANCE. ACCORDINGLY WE SEE NO INFIRMITY IN THE ORDER OF CIT(A) IN DELETING THE ADDITION AND THE SAME IS THEREFORE UPHELD. 4. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.11.11. SD/- SD/- (D. MANMOHAN) (RAJENDRA SINGH ) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI DATED: 16.11.2011. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI.