ITO, Jamshepur v. M/s. Shubham Enterprises,, Jamshepur

ITA 67/RAN/2013 | 2005-2006
Pronouncement Date: 26-11-2014

Appeal Details

RSA Number 6725114 RSA 2013
Assessee PAN AARFS3666D
Bench Ranchi
Appeal Number ITA 67/RAN/2013
Duration Of Justice 1 year(s) 5 month(s) 23 day(s)
Appellant ITO, Jamshepur
Respondent M/s. Shubham Enterprises,, Jamshepur
Appeal Type Income Tax Appeal
Pronouncement Date 26-11-2014
Appeal Filed By Department
Bench Allotted DB
Tribunal Order Date 26-11-2014
Assessment Year 2005-2006
Appeal Filed On 03-06-2013
Judgment Text
1 ITA NOS.67 & 68/RAN/13 M/S. SHUBHAM ENTERPRISES & SH.SH ATRGHAN AGARWAL JSR INCOME TAX APPELLATE TRIBUNAL CIRCUIT BENCH RANCHI BEFORE HON'BLE SHRI H.L. KARWA PRESIDENT AND HON'BLE SHRI B.R. BASKARAN ACCOUNTANT M EMBER ITA NO. 67 /RAN/2013 A.Y 200 5 - 06 I. T. O WARD 3(3) JAMSHEDPUR VS. M/S. S H UBHAM ENTERPRISES JSR PAN: AA RFS3666D ( APPELLANT /DEPARTMENT ) ( RESPONDENT /ASSESSEE ) ITA NO.68/RAN/2013 A.Y 2006 - 07 I.T. O WARD 3(3) JAMSHE DPUR VS. SHRI SHATRUGHAN AGARWAL JSR PAN:ACUPA7235K ( APPELLANT/ DEPARTMENT ) ( RESPONDENT /ASSESSEE ) FOR THE APPELLANT / DEPARTMENT : SH RI CHOUDHARY ORAM JCIT/LD.DR FOR THE RESPONDENT / ASSESS EE : SHRI R.R.MITTAL CA LD.AR DATE OF HEARING : 26 - 11 - 2014 DATE OF PRONOUNCEMENT: 26 - 11 - 201 4 ORDER SHRI B.R. BASKARAN ACCOUNTANT MEMBER : BOTH THE APPEALS FILED BY THE REVENUE ARE DIRE CTED AGAINST THE ORDERS PASSED BY LD CIT(A) IN THEIR RESPECTIVE HANDS OF THE ASSESSEES FOR THE ASSESSMENT YEAR MENTIONED IN THE CAPTION AGAINST THEIR NAME. SINCE THE ISSUE URGED IN THESE APPEALS IS IDENTICAL IN NATURE THEY WERE HEARD TOGETHER AND ARE BEI NG DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN BOTH THE APPEALS THE REVENUE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN DELETING THE DISALLOWANCE MADE U/S 40(A)(IA) OF THE ACT FOR NON - DEDUCTION OF TAX AT SOURCE FROM THE LORRY HIRE CHARGES CLAIMED BY THE ASSESSEE. 2 ITA NOS.67 & 68/RAN/13 M/S. SHUBHAM ENTERPRISES & SH.SH ATRGHAN AGARWAL JSR 3. WE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSING OFFICER DISALLOWED THE LORRY FREIGHT CHARGES CLAIMED BY THE ASSESSEE ON THE GROUND THAT THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE FROM THE SA ID PAYMENTS U/S 194C OF THE ACT AND HENCE THE SAME IS DISALLOWABLE U/S 40(A)(IA) OF THE ACT. BEFORE LD CIT(A) THE ASSESSEES CLAIMED THAT THEY ARE BROKERS AND ARE ARRANGING LORRIES FROM THE MARKET FOR THEIR CLIENTS. THEY PLACED RELIANCE ON THE DECISION O F HON BLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS. HARDARSHAN SINGH (2013)(30 TAXMAN.COM 245) WHEREIN THE HON BLE HIGH COURT HAD HELD THAT THE ASSESSEE WHO HAD ACTED AS MERE FACILITATOR OR INTERMEDIARY WAS NOT LIABLE TO DEDUCT TAX AT SOURCE WHI LE MAKING PAYMENTS TO TRANSPORTERS. THE LD CIT(A) ACCORDINGLY DELETED THE DISALLOWANCE BY FOLLOWING THE DECISION OF HON BLE DELHI HIGH COURT IN BOTH THE CASES. 4. BEFORE US THE LD D.R SUBMITTED THAT THE ASSESSING OFFICER HAD PLACED RELIANCE ON THE DE CISION RENDERED BY HON BLE KERALA HIGH COURT IN THE CASE OF CBDT VS. COCHIN GOODS TRANSPORT ASSOCIATION (236 ITR 993) AND ALSO THE DECISION OF HON BLE SUPREME COURT RENDERED IN THE CASE OF ASSOCIATED CEMENT CO. LTD VS. CIT (1993)(201 ITR 475). HOWEVER WE NOTICE THAT THE LD CIT(A) HAS HELD THAT BOTH THE DECISIONS ARE NOT APPLICABLE TO THE FACTS PREVAILING IN THE INSTANT CASES. ON THE CONTRARY THE LD A.R PLACED STRONG RELIANCE ON THE ORDER PASSED BY LD CIT(A). 4. WE NOTICE THAT THE ASSESSEE HAS CLAIM ED TO BE MERE INTERMEDIARY FOR ARRANGING THE VEHICLES. HOWEVER IT IS SEEN THAT THE ASSESSEE HAS RECEIVED THE TRANSPORT CHARGES AND PAID THE FREIGHT TO THE LORRY OWNERS. IT IS NOT KNOWN AS TO WHETHER THE SAID CLAIM WAS EXAMINED ON THE BASIS OF DOCUMENTS AVAILABLE WITH THE ASSESSEE AND ALSO BY MAKING ENQUIRIES WITH THE PERSONS WHO ENGAGED THE ASSESSEE. BE THAT AS IT MAY WE NOTICE THAT IT IS A CASE OF SIMPLE HIRING OF 3 ITA NOS.67 & 68/RAN/13 M/S. SHUBHAM ENTERPRISES & SH.SH ATRGHAN AGARWAL JSR VEHICLES AND THE SAME WILL NOT FALL IN THE CATEGORY OF CARRYING OUT ANY WORK IN PURSUAN CE OF CONTRACT AS CONTEMPLATED IN SEC. 194C OF THE ACT. WE NOTICE THAT THE HON BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. POOMPUHAR SHIPPING CORPORATION LTD. (282 ITR 3) HAS HELD THAT THE PROVISIONS OF SEC. 194C SHALL NOT APPLY TO MERE HIRING OF SHIP S . IN THE SAID CASE THE ASSESSEE THEREIN WAS ENGAGED IN THE BUSINESS OF TRANSPORTATION OF COAL UNDER A CONTRACT EXECUTED WITH THE TAMIL NADU ELECTRICITY BOARD. IT HIRED SHIPS BELONGING TO OTHER SHIPPING COMPANIES AND PAID HIRE CHARGES TO THEM FOR USING T HEIR SHIPS. THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE U/S. 194C OF THE ACT ON THE PAYMENTS SO MADE. THE HON BLE MADRAS HIGH COURT HELD THAT THE PAYMENT OF HIRE CHARGES OF TAKING TEMPORARY POSSESSION OF SHIPS BY THE ASSESSEE - COMPANY WOULD NOT FALL WITHIN THE PROVISIONS OF SEC. 194C OF THE ACT AND HENCE NO TAX AT SOURCE WAS REQUIRED TO BE DEDUCTED. IT WAS FURTHER HELD THAT HIRING OF SHIPS FOR THE PURPOSE OF USING THEM IN THE ASSESSEE S BUSINESS DID NOT AMOUNT TO A CONTRACT FOR CARRYING OUT ANY WORK AS CONT EMPLATED IN THE PROVISIONS OF SEC. 194C OF THE ACT. 6. ACCORDINGLY IN VIEW OF THE DECISION RENDERED IN THE CASE OF POOMPUHAR SHIPPING C ORPORATION LTD.(SUPRA) THE FREIGHT CHARGES PAID BY THE ASSESSEE FOR HIRING VEHICLES CANNOT BE CONSIDERED AS PAY MENTS MADE FOR CARRYING OUT ANY WORK AS CONTEMPLATED U/S. 194C OF THE ACT AND HENCE THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX AT SOURCE FROM THE TRUCK HIRE CHARGES U/S 194C OF THE ACT. ACCORDINGLY WE UPHELD THE CONCLUSION REACHED BY LD CIT(A) . 7. IN T HE RESULT BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 - 11 - 2014 SD/ - SD/ - [ H.L. KARWA ] [ B.R. BASKARAN ] PRESIDE NT ACCOUNTANT MEMBER DATE: 26.11.2014 4 ITA NOS.67 & 68/RAN/13 M/S. SHUBHAM ENTERPRISES & SH.SH ATRGHAN AGARWAL JSR PLACE : RANCHI PP SPS COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT : I.T.O WARD 3(3) JSR . 2 THE RESPONDENT: 1) M/S. SHUBHAM EN T ERPRISES 1/B NAND SINGH AREA NEW KALIMATI ROAD SAKCHI JSR 831001 AND 2) SHRI SHATRUGHAN AGARWAL PROP: M/S. GANESH ROADLINES 1/C NAND SINGH AREA NEW KALIMATI ROAD SAKCHI JSR 831001 3. .THE CIT 4.THE CIT(A) 5.DR ITAT CIRCUIT BENCH RANCHI 6. GUARD FILE. TRUE COPY BY ORDER ASS TT. REGISTRAR 5 ITA NOS.67 & 68/RAN/13 M/S. SHUBHAM ENTERPRISES & SH.SH ATRGHAN AGARWAL JSR 1. DATE OF DICTATION ............. 26 - 11 - 2014 DICTATED ON MEMBER S LAPTOP. HENCE SHORTHAND PAGES NOT AVAILABLE ....................... 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 ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT................ ... 26 - 11 - 14 .................................................................. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S ................ 6. DATE ON WHICH THE FILE 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 ..............................................................