ACIT Cir -II Kolhapur, Kolhapur v. Shri Bharat Dhanpal Patil,, Sindhudurg

ITA 600/PUN/2012 | 2007-2008
Pronouncement Date: 30-07-2013 | Result: Allowed

Appeal Details

RSA Number 60024514 RSA 2012
Assessee PAN ABKPP3371Q
Bench Pune
Appeal Number ITA 600/PUN/2012
Duration Of Justice 1 year(s) 4 month(s) 8 day(s)
Appellant ACIT Cir -II Kolhapur, Kolhapur
Respondent Shri Bharat Dhanpal Patil,, Sindhudurg
Appeal Type Income Tax Appeal
Pronouncement Date 30-07-2013
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-07-2013
Date Of Final Hearing 21-04-2014
Next Hearing Date 21-04-2014
Assessment Year 2007-2008
Appeal Filed On 22-03-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE: SHRI G. S. PANNU ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR JUDICIAL MEMBER ITA NO. 600 / P N/ 20 1 2 ASSESSMENT YEAR : 200 7 - 08 ASSTT. COMMISSIONER OF INCOME TAX CIRCLE - 2 KOLHAPUR VS. SHRI BHARAT DHANPAL PATIL RATNADEEP SHRAMVIHAR HSG. SOC. SAWANTWADI SINDHUDURG (APPELLANT) (RESPONDENT) PAN NO. ABKPP3371Q CO NO. 18 /PN/20 1 3 (ARISING OUT OF ITA NO. 600 /PN/201 2 ) ASSESSMENT YEAR : 200 7 - 08 SHRI BHARAT DHANPA L PATIL RATNADEEP SHRAMVIHAR HSG. SOC. SAWANTWADI SINDHUDURG ( CROSS OBJECTOR ) PAN NO.ABPPK2146K ASSTT. CO MMISSIONER VS. OF INCOME TAX CIRCLE - 2 KOLHAPUR ( APPELLANT IN THE APPEAL ) A SSESSEE BY: SHRI M.K. KULKARNI RE VENUE BY: MS . ANN KAPTHUAMA DATE OF HEARING : 0 2 - 0 7 - 2013 DATE OF PRONOUNCEMENT : 30 - 0 7 - 2013 ORDER P ER R.S. PADVEKAR JM : - THE REVENUE HAS FILED THE APPEAL CHALLENGING THE IMPUGNED ORDER OF THE LD. CIT(A) - KOLHAPUR DATED 12 - 01 - 2012 FOR THE A.Y. 2007 - 08. THE ASSESSEE HAS ALSO FILED THE CROSS OBJECTION. THE REVENUE HAS TAKEN THE FOLLOWING EFFECTIVE GROUNDS IN THE APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS.39 43 046/ - BY HOLDING THAT THE PR OVISIONS OF SECTION 40(A)(IA) WOULD APPLY WHEN THE AMOUNT IS PAYABLE AND NOT WHERE THE EXPENDITURE IS PAID THEREBY IGNORING THE LEGISLATIVE INTENT CLEAR FROM THE EXPLANATORY NOTES TO FINANCE (NO.2) ACT 2004 GIVEN BY THE CENTRAL BOARD OF DIRECT TAXES VIDE ITS CIRCULAR NO.5 DATED 15.05.2005 AS PER WHICH PROVISIONS OF SUB - CLAUSE (IA) OF SECTION 40(A) APPLY TO ALL AMOUNTS - WHETHER ACTUALLY PAID OR REMAINING PAYABLE DURING THE YEAR. 2 ITA NO. ITA NO. 600 /PN/201 2 & CO NO. 18 /PN/201 3 SHRI BHARAT DHANPAL PATIL SINDHUDURG 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW WHETHER THE LD . CIT(A) WAS JUSTIFIED IN HOLDING THAT THE PROVISIONS OF SEC. 40(A)(IA) ARE APPLICABLE ONLY TO AMOUNTS PAYABLE OR OUTSTANDING AND NOT TO THE AMOUNTS ALREADY PAID DURING THE YEAR ? 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW WHETHER THE L D. CIT(A) HAS ERRED IN IGNORING THAT THE PROVISIONS OF SEC. 40(A)(IA) HAVE TO BE READ IN CONJUNCTION WITH CHAPTER XVII - B R.W.S. 194C WHICH PROVIDES FOR DEDUCTION OF TAX AT SOURCE BY ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO A CONTRACTOR OR SUB - CONTRA CTOR FOR CARRYING OUT ANY WORK ON HIS BEHALF SHALL AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE PAYEE OR AT THE TIME PAYMENT THEREOF WHICHEVER IS EARLIER DEDUCT TAX AT SOURCE AT THE RATES IN FORCE ? 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTA NCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN IGNORING THAT THE PROVISIONS OF SEC. 40(A)(IA) R.W.S. CH. XVII - B COMES INTO OPERATION ONCE THE AMOUNT IS CREDITED OR PAID TO THE ACCOUNT OF THE PAYEE AND IT DOES NOT PROVIDE AN EXCEPTION TO THE PAYMEN TS MADE TO THE PAYEE DURING THE YEAR AND NOT OUTSTANDING AS ON 31 ST MARCH ? 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE TRIBUNAL FURTHER ERRED IN NOT APPRECIATING THAT THE EXPRESSION 'PAYABLE' IN SECTION 40(A)(IA) IMPLY A STA GE WHEN THE LIABILITY TO PAY ARISES WHICH IS ESSENTIALLY PRIOR TO ACTUAL PAYMENT AND COVERS 'PAID' ALSO ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVIIB ? 2. THE BRIEFLY STATED FACTS ARE AS UNDER. THE ASSESSEE IS AN INDIVIDUAL AND UNDERTAKES CIVIL CONTRACT S . THE ASSESSEE IS MAINLY DOING THE CONTRACTS OF THE PWD MAHARASHTRA AND ZILA PARISHAD. IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS NOT DEDUCTED THE TAX AT SOURCE IN RESPECT OF THE PAYMENTS MADE TO THE CONTRACTORS AND SU B - CONTRACTORS TO THE EXTENT OF RS. 39 43 046/ - WITHIN THE TIME LIMIT PRESCRIBED U/S. 194(C) OF THE ACT. THE ASSESSING OFFICER THEREFORE IN VOKED SEC. 40(A)(IA) OF THE INCOME - TAX ACT AND PROCEEDED TO MA K E THE DISALLOWANCE OF RS.39 43 046/ - . THE ASSESSEE C HA LLENGED THE DISALLOWANCE BEFORE THE LD. CIT(A). THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE FOLLOWING THE DECISION IN THE CASE OF JAIPUR VID Y UT VITRAN NIGAM LTD. VS. DCIT 123 TTJ 888 (HYD.) AND M/S. TEJA CONSTRUCTIONS 3 ITA NO. ITA NO. 600 /PN/201 2 & CO NO. 18 /PN/201 3 SHRI BHARAT DHANPAL PATIL SINDHUDURG HYDERABAD VS. ACIT RANGE - II HYDERABAD 36 DTR 220 (HYD.). NOW THE REVENUE IS IN APPEAL BEFORE US. WE HAVE HEARD THE PARTIES. 3. THE PAYMENTS OF THE BILLS MADE BY THE ASSESSEE AND TDS DEPOSITED ARE AS UNDER: SL. NO. DATE OF BILL NAME OF CONTRACTOR AMOUNT TDS AMOUNT PAYMENT OF TDS C ONTRACTORS 1 26/02/2007 NARAYAN RATHOD 102041/ - 2041/ - 30/05/2007 2 09/01/2007 MOTIRAM CHAVAN 102041/ - 2041/ - 30/05/2007 3 17/10/2006 MALTI DESHPANDE 153443/ - 3443/ - 30/05/2007 4 02/12/2006 JAI GANESH MATAL SUPPLY 153443/ - 3443/ - 30/05/2007 5 15/06/20 06 VIJAY MUSALE 255739/ - 5739/ - 30/05/2007 6 06/09/2006 MUSALE 153443/ - 3443/ - 30/05/2007 7 21/07/2006 ADITYA LOGISTIC PVT. LTD. 613773/ - 13773/ - 30/05/2007 8 29/11/2006 - DO - 386428/ - 8671/ - 30/05/2007 SUB - CONTRACTORS 1 25/01/2007 D.N. NARVEKAR 202269 5/ - 22695/ - 30/05/2007 TOTAL 39 43 046/ - 65 290/ - 3.1 A DMITTEDLY ALL THE PAYMENTS ARE MADE ON ONE DATE I.E. 30 - 05 - 2007 THAT IS ALMOST AFTER TWO MONTHS FROM THE END OF THE FINANCIAL YEAR I.E. 31 - 03 - 2007 THE DATE OF THE BILLS ARE PRIOR TO MARCH 2007. NOW THE ISSUE STANDS COVERED AGAINST THE ASSESSEE BY THE FOLLOWING TWO DECISIONS (I) CIT VS. SIKANDARKHAN N TUNVAR (2013) 33 TAXMANN.COM 133 (GUJ A RAT) AND (II) CIT KOLKATA VS. CRESCENT EXPORT SYNDICATE (2013) 33 TAXMANN.COM 250 (KOLKATA) . IN THE CASE O F CRESCENT EXPORT SYNDICATE (SUPRA) THE DECISION OF THE HON'BLE SPECIAL BENCH OF THE ITAT IN THE CASE OF MERILYN SHIPPING AND TRANS P ORTS 136 ITD 23 (SB) (VISAKHA) HAS COME FOR THE JUDICIAL SCRUTINY IN WHICH IT WAS HELD THAT THE DISALLOWANCE U/S. 40(A)(IA) APPLIES ONLY TO AMOUNTS PAYABLE AS ON 31 ST MARCH OF THE PREVIOUS YEAR O N WHICH THE TDS HAS NOT BEEN DEDUCTED AND NO DISALLOWANCE TO BE MADE IN RESPECT OF SUMS PAID DURING THE PREVIOUS YEAR WITHOUT DEDUCTING TDS. THE HON'BLE HIGH COURT REVERSED THE DECISIO N OF THE SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING AND TRANSPORT (SUPRA). THE OPERATIVE PART OF THE JUDGMENT IS AS UNDER: 4 ITA NO. ITA NO. 600 /PN/201 2 & CO NO. 18 /PN/201 3 SHRI BHARAT DHANPAL PATIL SINDHUDURG IN VIEW OF ABOVE DISCUSSION WE ANSWER THE QUESTION AS UNDER: - THE PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME TAX ACT 1961 ARE APPLICABLE NOT ONLY TO THE AMOUNT WHICH IS SHOWN AS PAYABLE ON THE DATE OF BALANCE - SHEET BUT IT IS APPLICABLE TO SUCH EXPENDITURE WHICH BECOME PAYABLE AT ANY TIME DURING THE RELEVANT PREVIOUS YEAR AND WAS ACTUALLY PAID WITHIN THE PREVIOUS YEAR. IN TH E RESULT THE QUESTION IS DECIDED IN FAVOUR OF REVENUE AND AGAINST THE ASSESSEE.' BEFORE DEALING WITH THE SUBMISSIONS OF THE LEARNED COUNSEL APPEARING FOR THE ASSESSEES IN BOTH THE APPEALS WE HAVE TO EXAMINE THE CORRECTNESS OF THE MAJORITY VIEWS IN THE CASE OF MERILYN SHIPPING. WE ALREADY HAVE QUOTED EXTENSIVELY BOTH THE MAJORITY AND THE MINORITY VIEWS EXPRESSED IN THE AFORESAID CASE. THE MAIN THRUST OF THE MAJORITY VIEW IS BASED ON THE FACT 'THAT THE LEGISLATURE HAS REPLACED THE EXPRESSION 'AMOUNTS CREDITED OR PAID' WITH THE EXPRESSION 'PAYABLE' IN THE FINAL ENACTMENT. COMPARISON BETWEEN THE PRE - AMENDMENT AND POST AMENDMENT LAW IS PERMISSIBLE FOR THE PURPOSE OF ASCERTAINING THE MISCHIEF SOUGHT TO BE REMEDIED OR THE OBJECT SOUGHT TO BE ACHIEVED BY AN AMENDMEN T. THIS IS PRECISELY WHAT WAS DONE BY THE APEX COURT IN THE CASE OF CIT VS. KELVINATOR REPORTED IN 2010(2) SCC 723. BUT THE SAME COMPARISON BETWEEN THE DRAFT AND THE ENACTED LAW IS NOT PERMISSIBLE. NOR CAN THE DRAFT OR THE BILL BE USED FOR THE PURPOSE OF R EGULATING THE MEANING AND PURPORT OF THE ENACTED LAW. IT IS THE FINALLY ENACTED LAW WHICH IS THE WILL OF THE LEGISLATURE. THE LEARNED TRIBUNAL FELL INTO AN ERROR IN NOT REALIZING THIS ASPECT OF THE MATTER. THE LEARNED TRIBUNAL HELD 'THAT WHERE LANGUAGE IS CLEAR THE INTENTION OF THE LEGISLATURE IS TO BE GATHERED FROM THE LANGUAGE USED'. HAVING HELD SO IT WAS NOT OPEN TO SEEK TO INTERPRET THE SECTION ON THE BASIS OF ANY COMPARISON BETWEEN THE DRAFT AND THE SECTION ACTUALLY ENACTED NOR WAS IT OPEN TO SPECULAT E AS TO THE EFFECT OF THE SO - CALLED REPRESENTATIONS MADE BY THE PROFESSIONAL BODIES. THE LEARNED TRIBUNAL HELD THAT 'SECTION 40(A)(IA) OF THE ACT CREATES A LEGAL FICTION BY VIRTUE OF WHICH EVEN THE GENUINE AND ADMISSIBLE EXPENSES CLAIMED BY AN ASSESSEE UND ER THE HEAD 'INCOME FROM BUSINESS AND PROFESSION' IF THE ASSESSEE DOES NOT DEDUCT TDS ON SUCH EXPENSES ARE DISALLOWED'. HAVING HELD SO WAS IT OPEN TO THE TRIBUNAL TO SEEK TO JUSTIFY THAT 'THIS FICTION CANNOT BE EXTENDED ANY FURTHER AND THEREFORE CANNOT B E INVOKED BY ASSESSING OFFICER TO DISALLOW THE GENUINE AND REASONABLE EXPENDITURE ON THE AMOUNTS OF EXPENDITURE ALREADY PAID'? DOES THIS NOT AMOUNT TO DELIBERATELY READING SOMETHING IN THE LAW WHICH IS NOT THERE? WE AS SUCH HAVE NO DOUBT IN OUR MIND THAT THE LEARNED TRIBUNAL REALIZED THE MEANING AND PURPORT OF SECTION 40(A)(IA) CORRECTLY WHEN IT HELD THAT IN CASE OF OMISSION TO DEDUCT TAX EVEN THE 5 ITA NO. ITA NO. 600 /PN/201 2 & CO NO. 18 /PN/201 3 SHRI BHARAT DHANPAL PATIL SINDHUDURG GENUINE AND ADMISSIBLE EXPENSES ARE TO BE DISALLOWED. BUT THEY SOUGHT TO REMOVE THE RIGOUR OF THE LAW BY HOLD ING THAT THE DISALLOWANCE SHALL BE RESTRICTED TO THE MONEY WHICH IS YET TO BE PAID. WHAT THE TRIBUNAL BY MAJORITY DID WAS TO SUPPLY THE CASUS OMISSUS WHICH WAS NOT PERMISSIBLE AND COULD ONLY HAVE BEEN DONE BY THE SUPREME COURT IN AN APPROPRIATE CASE. REFER ENCE IN THIS REGARD MAY BE MADE TO THE JUDGMENT IN THE CASE OF BHUWALKA STEEL INDUSTRIES VS. BOMBAY IRON & STEEL LABOUR BOARD REPORTED IN 2010 (2) SCC 273. 'UNPROTECTED WORKER' WAS FINALLY DEFINED IN SECTION 2 (II) OF THE MATHADI ACT AS FOLLOWS: - UNPROTEC TED WORKER' MEANS A MANUAL WORKER WHO IS ENGAGED OR TO BE ENGAGED IN ANY SCHEDULED EMPLOYMENT.' THE CONTENTION RAISED WITH REFERENCE TO WHAT WAS THERE IN THE BILL WAS REJECTED BY THE SUPREME COURT BY HOLDING AS FOLLOWS: - 'IT MUST AT THIS JUNCTURE BE NOT ED THAT IN SPITE OF SECTION 2(11) WHICH INCLUDED THE WORDS 'BUT FOR THE PROVISIONS OF THIS ACT IS NOT ADEQUATELY PROTECTED BY LEGISLATION FOR WELFARE AND BENEFITS OF THE LABOUR FORCE IN THE STATE' THESE PRECISE WORDS WERE REMOVED BY THE LEGISLATURE AND T HE DEFINITION WAS MADE LIMITED AS IT HAS BEEN FINALLY LEGISLATED UPON. IT IS TO BE NOTED THAT WHEN THE BILL CAME TO BE PASSED AND RECEIVED THE ASSENT OF THE VICE - PRESIDENT ON 05 - 06 - 1969 AND WAS FIRST PUBLISHED IN THE MAHARASHTRA GOVERNMENT GAZETTE EXTRAOR DINARY PART IV ON 13 - 06 - 1969 THE AFOREMENTIONED WORDS WERE OMITTED. THEREFORE THIS WOULD BE A CLEAR POINTER TO THE LEGISLATIVE INTENT THAT THE LEGISLATURE BEING CONSCIOUS OF THE FACT AND BEING ARMED WITH ALL THE COMMITTEE REPORTS AND ALSO BEING ARMED WI TH THE FACTUAL DATA DELIBERATELY AVOIDED THOSE WORDS. WHAT THE APPELLANTS ARE ASKING WAS TO READ IN THAT DEFINITION THESE PRECISE WORDS WHICH WERE CONSCIOUSLY AND DELIBERATELY OMITTED FROM THE DEFINITION. THAT WOULD AMOUNT TO SUPPLYING THE CASUS OMISSUS AND WE DO NOT THINK THAT IT IS POSSIBLE PARTICULARLY IN THIS CASE. THE LAW OF SUPPLYING THE CASUS OMISSUS BY THE COURTS IS EXTREMELY CLEAR AND SETTLED THAT THOUGH THIS COURT MAY SUPPLY THE CASUS OMISSUS IT WOULD BE IN THE RAREST OF THE RARE CASE AND TH US SUPPLYING OF THIS CASUS OMISSUS WOULD BE EXTREMELY NECESSARY DUE TO THE INADVERTENT OMISSION ON THE PART OF THE LEGISLATURE. BUT THAT IS CERTAINLY NOT THE CASE HERE'. WE SHALL NOW ENDEAVOUR TO SHOW THAT NO OTHER INTERPRETATION IS POSSIBLE. THE KEY WORD S USED IN SECTION 40(A)(IA) ACCORDING TO US ARE 'ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII - B'. IF THE QUESTION IS 'WHICH EXPENSES ARE SOUGHT TO BE DISALLOWED?' THE ANSWER IS BOUND TO BE 'THOSE EXPENSES ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII - B. ONCE THIS IS REALIZED NOTHING TURNS ON THE BASIS OF THE FACT THAT THE LEGISLATURE USED THE WORD 'PAYABLE' AND NOT 'PAID OR CREDITED'. UNLESS ANY AMOUNT IS PAYABLE IT CAN NEITHER 6 ITA NO. ITA NO. 600 /PN/201 2 & CO NO. 18 /PN/201 3 SHRI BHARAT DHANPAL PATIL SINDHUDURG BE PAID NOR CREDITED. IF AN AMOUNT HAS NEITHER BEEN PA ID NOR CREDITED THERE CAN BE NO OCCASION FOR CLAIMING ANY DEDUCTION. THE LANGUAGE USED IN THE DRAFT WAS UNCLEAR AND SUSCEPTIBLE TO GIVING MORE THAN ONE MEANING. BY LOOKING AT THE DRAFT IT COULD BE SAID THAT THE LEGISLATURE WANTED TO TREAT THE PAYMENTS MAD E OR CREDITED IN FAVOUR OF A CONTRACTOR OR SUB - CONTRACTOR DIFFERENTLY THAN THE PAYMENTS ON ACCOUNT OF INTEREST COMMISSION OR BROKERAGE FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICES BECAUSE THE WORDS 'AMOUNTS CREDITED OR PAID' WERE USED ON LY IN RELATION TO A CONTRACTOR OR SUB - CONTRACTOR. THIS DIFFERENTIAL TREATMENT WAS NOT INTENDED. THEREFORE THE LEGISLATURE PROVIDED THAT THE AMOUNTS ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII - B PAYABLE ON ACCOUNT OF INTEREST COMMISSION OR BR OKERAGE RENT ROYALTY FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICES OR TO A CONTRACTOR OR SUB - CONTRACTOR SHALL NOT BE DEDUCTED IN COMPUTING THE INCOME OF AN ASSESSEE IN CASE HE HAS NOT DEDUCED OR AFTER DEDUCTION HAS NOT PAID WITHIN THE S PECIFIED TIME. THE LANGUAGE USED BY THE LEGISLATURE IN THE FINALLY ENACTED LAW IS CLEAR AND UNAMBIGUOUS WHEREAS THE LANGUAGE USED IN THE BILL WAS AMBIGUOUS. A FEW WORDS ARE NOW NECESSARY TO DEAL WITH THE SUBMISSION OF MR. BAGCHI AND MS. ROYCHOWDHURI. THERE CAN BE NO DENIAL THAT THE PROVISION IN QUESTION IS HARSH. BUT THAT IS NO GROUND TO READ THE SAME IN A MANNER WHICH WAS NOT INTENDED BY THE LEGISLATURE. THIS IS OUR ANSWER TO THE SUBMISSION OF MR. BAGCHI. THE SUBMISSION OF MS. ROYCHOWDHURI THAT THE SECOND PROVISO SOUGHT TO BECOME EFFECTIVE FROM 1ST APRIL 2013 SHOULD BE HELD TO HAVE ALREADY BECOME OPERATIVE PRIOR TO THE APPOINTED DATE CANNOT ALSO BE ACCEDED TO FOR THE SAME REASON INDICATED ABOVE. THE LAW WAS DELIBERATELY MADE HARSH TO SECURE COMPLIANCE OF T HE PROVISIONS REQUIRING DEDUCTIONS OF TAX AT SOURCE. IT IS NOT THE CASE OF AN INADVERTENT ERROR. FOR THE REASONS DISCUSSED ABOVE WE ARE OF THE OPINION THAT THE MAJORITY VIEWS EXPRESSED IN THE CASE OF MERILYN SHIPPING & TRANSPORTS ARE NOT ACCEPTABLE. THE S UBMISSIONS ADVANCED BY LEARNED ADVOCATES HAVE ALREADY BEEN DEALT WITH AND REJECTED. THE APPEAL IS THUS ALLOWED IN FAVOUR OF THE REVENUE . 4. WE THEREFORE REVERSE OF ORDER OF THE LD. CIT(A) AND RESTORE THE ORDER OF THE ASSESSING OFFICER AND ALLOW THE GR OUNDS TAKEN BY THE REVENUE. IN THE RESULT THE REVENUE S APPEAL IS ALLOWED. 5. NOW WE TAKE UP CROSS OBJECTION BEING CO NO. 18/PN/2013. THE ASSESSEE HAS TAKEN THE FOLLOWING EFFECTIVE GROUNDS IN THE CROSS OBJECTION: 7 ITA NO. ITA NO. 600 /PN/201 2 & CO NO. 18 /PN/201 3 SHRI BHARAT DHANPAL PATIL SINDHUDURG 1. ON THE FACTS AND CIRCUMSTANCES OF TH E CASE AND IN LAW THE CROSS OBJECTIONS RAISED IN THE DEPTT.'S APPEAL NO. ITA/600/P N /2012 ARE PURE QUESTIONS OF LAW GOING TO THE ROOT OF THE MATTER. THE BE ADMITTED FOR ADJUDICATION IN ACCORDANCE WITH THE PROVISIONS OF LAW. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW AND ASSESSEE UNDISPUTEDLY IS ASSESSED TO TAX IN 'INDIVIDUAL STATUS' IT WOULD REVEAL THAT 'STATUS' INDIVIDUAL WAS NOT INCLUDED IN THE LIST APPENDED BELOW S 194C OF THE ACT AND THEREFORE THE RESPONDENT - ASSESSEE WAS NOT OBLIGED TO D EDUCT ANY TAX AT SOURCE. MEANING THEREBY THE PROVISIONS OF S 40(A)(I - A) WERE NOT APPLICABLE TO THE FACTS OF THIS CASE OF THE ASSESSEE. IN VIEW OF THIS REVENUE'S APPEAL IS NOT MAINTAINABLE. IT BE DISMISSED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE STATUS 'INDIVIDUAL' BEING NOT IN THE LIST APPENDED TO S 194C PRIOR TO 01 - 06 - 2007 THE QUESTION OF VIOLATION OF 5. 40(A)(I - A) IN THE CASE OF ASSESSEE DOES NOT ARISE. THE APPEAL OF THE REVENUE THEREFORE IS NOT MAINTAINABLE 6. WE HAVE HEARD TH E PARTIES. THE MAIN SUBSTANCE OF ARGUMENT OF THE LEARNED COUNSEL IS THAT THE ASSESSEE IS AN INDIVIDUAL AND FOR THE A.Y. 2007 - 08 THERE WAS NO OBLIGATION ON THE ASSESSEE TO DEDUCT THE TAX U/S. 194(C ) OF THE ACT ON THE PAYMENTS MADE TO THE SUB - CONTRACTORS. W E ALSO RELIED ON THE DECISION OF THE ITAT PUNE IN THE CASE OF DCIT VS. SURVE SRIRAM KRISHNAJI ITA/1207/PN/2010 AND CO NO. 62/PN/2011 DATED 17 - 05 - 2012. IF THE PAYMENTS ARE MADE TO THE SUB - CONTRACTORS AND THE ASSESSEE BEING AN INDIVIDUAL HENCE NO DISALLOW ANCE CAN BE MADE U/S. 40(A)(IA) OF THE ACT. WE HAVE ALSO HEARD THE LD. DR. 7. WE FIND FORCE IN THE ARGUMENT OF THE LEARNED COUNSEL THAT SEC. 194C HAS UNDERGONE AMENDMENT W.E.F. 01 - 06 - 2007 BY THE FINANCE ACT 2007. IN OUR OPINION THIS ASPECT HAS NOT BEE N EXAMINED BY THE AUTHORIT IES BELOW. WE THEREFORE RESTORE THE GROUNDS TAKEN BY THE ASSESSEE IN THE CROSS OBJECTION TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME. NEEDLESS TO SAY THAT THE ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY OF BEING HEARD AS PER THE PRINCIPLES OF NATURAL JUSTICE. WE MAKE IT CLEAR THAT ON THE GROUNDS TAKEN IN CROSS - OBJECTION WE HAVE NOT 8 ITA NO. ITA NO. 600 /PN/201 2 & CO NO. 18 /PN/201 3 SHRI BHARAT DHANPAL PATIL SINDHUDURG EXPRESSED ANYTHING ON MERIT AND THE ASSESSING OFFICER IS TO INDEPENDENTLY DECIDE THE GROUNDS TAKEN BY THE ASSESSEE. 8. TO SUM UP REVENUE S APPEAL IS ALLOWED AND THE ASSESSEE S CROSS OBJECTION IS ALLOWED FOR THE STATISTICAL PURPOSE S . PRONOUNCED IN THE OPEN COURT ON 30 - 0 7 - 20 1 3 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE DATED : 30 TH JULY 20 1 3 COPY TO 1 DEPARTMENT 2 ASSESSEE 3 THE CIT(A) KOLHAPUR 4 THE CIT KOLHAPUR 5 THE DR ITAT A BENCH PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX AP PELLATE TRIBUNAL PUNE