Shri Roshanlal D.Bhalothia, Baroda v. The Income tax Officer,Ward-2(2),, Baroda

ITA 809/AHD/2009 | 2005-2006
Pronouncement Date: 18-03-2011 | Result: Allowed

Appeal Details

RSA Number 80920514 RSA 2009
Bench Ahmedabad
Appeal Number ITA 809/AHD/2009
Duration Of Justice 2 year(s) 5 day(s)
Appellant Shri Roshanlal D.Bhalothia, Baroda
Respondent The Income tax Officer,Ward-2(2),, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 18-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 18-03-2011
Date Of Final Hearing 14-03-2011
Next Hearing Date 14-03-2011
Assessment Year 2005-2006
Appeal Filed On 13-03-2009
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE S/SHRI BHAVNESH SAINI JM AND D.C.AGRAWAL A M ROSHANLAL D. BHALOTHIA PROP. INDIAN ROAD CARRIER PLOT NO.493 GIDC MAKARPURA BARODA. VS. INCOME-TAX OFFICER WARD 2(2) BARODA. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI S. N. L. AGRAWAL AR RESPONDENT BY:- SHRI MUDIT NAGPAL SR.DR O R D E R PER D.C. AGRAWAL ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE RAISING FO LLOWING GROUNDS :- UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED BOTH IN LAW AND FACTS (1) CONFIRMING THE ADDITION OF RS.23 66 150/- ON ACCOUN T OF APPELLANTS FAILURE TO DEDUCT TAX ON TRANSPORT PAYM ENTS U/S 40(A)(IA) (2) LD. CIT(A) FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 194C (2) ARE NOT APPLICABLE TO THE APPELLANT. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WHETHE R THE PROVISIONS OF SECTION 194C(2) OF THE I.T. ACT 1961 WOULD BE APPL ICABLE TO THE FACTS OF THE CASE AND THEREBY ASSESSEE WOULD BE LIABLE TO DE DUCT TAX ON THE ITA NO.809/AHD/2009 ASST. YEAR 2005-06 ITA NO.809/AHD/2009 ASST. YEAR 2005-06 2 PAYMENTS MADE BY IT AND FOR NON-DEDUCTION OF SUCH T AX THE PAYMENT WOULD BE LIABLE FOR ADDITION UNDER SECTION 40(A)(IA ). 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A N INDIVIDUAL ENGAGED IN THE BUSINESS OF TRANSPORTATION ON CONTRACT BASIS . DURING THE ASSESSMENT YEAR ASSESSEE CLAIMED TOTAL AMOUNT OF RS.97 70 910/ - AS PAYMENT OF HIRE CHARGES TO THE TRUCK OWNERS FROM WHOM ASSESSEE HAD TAKEN TRUCKS ON HIRE AND USED THEM FOR PLYING THE GOODS OF THE CLIENTS F ROM WHOM HE HAS TAKEN CONTRACT. THE AO WHILE EXAMINING THE ACCOUNTS FOUND THAT ASSESSEE WAS REQUIRED TO DEDUCT TAX ON A SUM OF RS.23 66 150/- U /S 194C PAID BY IT TO DIFFERENT TRUCK OWNERS AS UNDER :- SL.NO. NAME OF THE PARTY AMOUNT (RS.) 1 AGRL ANDHRA GUJARAT ROAD LINES 256795 2 AMAN TRANSPORT 294465 3 CALCUTTA CARGO 119750 4 CHANDAN CARGO MOVERS 114060 5 DELHI-BARODA ROADLINES 276120 6 PADDA NATIONAL ROADLINES 116480 7 SATGURU ROADLINES 596955 8 SHIVAM ROADLINES 130135 9 SUPER HARYANA TRANSPORT 51460 10 SHRI SHYAM TRAILOR 125520 11 SHREE SHYAM TEMPO SERVICES 77300 12 KING ROAD CARRIERS 86960 13 PUNJAB NATIONAL ROADWAYS 57050 14 TATA TRAILOR SERVICE 63100 TOTAL 23 66 150 SINCE TAX WAS NOT DEDUCTED HE CONSIDERED IT AS VIO LATION OF SECTION 40(A)(IA) AND ADDED THE SAME TO THE TOTAL INCOME. 4. THE LD. CIT(A) CONFIRMED THE ADDITION BY HOLDING THAT PROVISIONS OF SECTION 194C ARE CLEARLY APPLICABLE AS THE GROSS RECEIPTS/TURNOVER ITA NO.809/AHD/2009 ASST. YEAR 2005-06 3 EXCEEDS MONETARY LIMIT PRESCRIBED UNDER SECTION 44A B AND THAT ASSESSEE IS MAKING PAYMENTS TO SUB-CONTRACTORS FROM WHOM IT HAS TAKEN CONTRACTS ON HIRE. 5. BEFORE US THE LD. AR FOR THE ASSESSEE SUBMITTED THAT ASSESSEE HAS CONTRACTED WITH HIS CLIENTS FOR TRANSPORTING THEIR GOODS AND FOR DOING THIS WORK IT HAS TAKEN THE TRUCKS ON HIRE BUT HAS NOT AW ARDED ANY SUB-CONTRACT TO THE TRUCK OWNERS. NO WORK AS SUCH HAS BEEN SUB-C ONTRACTED TO THE TRUCK OWNERS. FURTHER THE TRUCKS ARE HIRED AS AND WHEN NE EDED. THE ASSESSEE HAS NOT SHARED ANY RISK WITH THE TRUCK OWNERS WHO H AD ONLY PROVIDED THE TRUCKS. THE HIRE CHARGES PAID ARE IN THE NATURE OF RENT. AS THE ASSESSEE HAS NOT AWARDED ANY WORK TO THE TRUCK OWNERS ASSESSEE IS NOT LIABLE TO DEDUCT TAX ON THE PAYMENTS MADE TO THEM. FURTHER ACCORDING TO THE LD. AR THERE WAS AMENDMENT IN SECTION 194 (5) WHERE LIMIT FOR IN DIVIDUAL PAYMENT WAS RS.20 000/- AND WAS INCREASED TO RS.30 000/- BY FINANCE ACT 2010 W.E.F. 1.7.2010 AND LIMIT FOR AGGREGATE PAYMENT IN A FINANCIAL YEAR WAS RS.50 000/- TILL AMENDMENT WAS MADE BY FINANCE ACT 2010 W.E.F. 1.7.2010 MAKING THE LIMIT TO RS.75 000/-. ACCORDING TO THE LD. AR THE AO HAS NOT DISALLOWED ANY SUM OUT OF PAYMENTS MADE TO OTHERS ON THE GROUND THAT PAYMENT IN AGGREGATE DID NOT EXCEED RS. 50 000/-. EARLIER ACCORDING TO HIM THERE WAS NO LIMIT FOR AGGREGATE A MOUNT. THE LIMIT WAS ONLY OF RS.20 000/- TILL FY 2003-04. THE LD. AR HAS RELIED ON SEVERAL JUDGMENTS AS UNDER :- (1) KAVITA CHUG (MRS.) VS. ITO (2010) 45 DTR 146 (KOL) (TRIB). (2) MYTHRI TRANSPORT CORPORATION VS. ACIT CIR-1(1) VISAKHAPATNAM (2010 124 ITD 40. (3) ITO VS. INDIAN ROAD LINES (2010 45 DTR 49 (ASR) (TR IB). ITA NO.809/AHD/2009 ASST. YEAR 2005-06 4 (4) DCIT VS. SATISH AGGARWAL & CO. (2010) 122 ITR 35. (5) M/S SIDDHI VINAYAK VS. ITO IN ITA NO.2233/AHD/2009 ITAT ABENCH AHMEDABAD ORDER DATED 18.02.2011. (6) CITY TRANSPORT CORPN. VS. ITO (TDS)-2(5) MUMBAI (2 007) 13 SOT 479(MUM). (7) ITAT AHMEDABAD D BENCH M/S PRAMUKH JUTE TRADERS V S. ITO WARD-2 ANAND ITA NO.3422/AHD/2008 ASST. YEAR 2005- 06 ORDER DATED 18.09.2009 (PARA 3). (8) ITAT AHMEDABAD B BENCH M/S PRAGATI TRADING CO. VS . ITO WARD-2 ANAND ITA NO.3478/AHD/2008 ASST. YEAR 2005 -06 ORDER DATED 26.11.2010 (PARA 4). 6. THE LD. DR ON THE OTHER HAND SUBMITTED THAT IT H AS NOT BEEN CLARIFIED BY THE ASSESSEE AS TO WHO HAS DRAWN THE W AY-BILLS WHAT IS THE AGREEMENT BETWEEN THE ASSESSEE AND THE TRUCK OWNERS AND WHETHER PAYMENTS WERE MADE TO TRUCK OWNERS FOR MERELY HIRIN G THE TRUCKS OR FOR CARRYING GOODS ALSO. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THE AGREEMENT BET WEEN THE ASSESSEE AND THE TRUCK OWNERS HAS NOT BEEN EXAMINED. WHETHER ASSESSEE HAS ACTUALLY PASSED ON THE WORK TO THE TRUCK OWNERS OR HE HIMSELF EXECUTED THE WORK IS NOT CLEAR. IT IS NOT CLEAR WHO HAS DRA WN WAY-BILLS AND ON WHOSE WAY-BILLS GOODS TRANSPORTED ARE INSURED. FUR THER WHETHER HIRE CHARGES ARE PAID ON THE BASIS OF DISTANCE COVERED O R ON THE BASIS OF GOODS TRANSPORTED. IN OTHER WORDS IT HAS TO BE SEEN WHETH ER ANY WORK TAKEN BY THE ASSESSEE FROM HIS CLIENTS WAS TRANSFERRED TO TH E TRUCK OWNERS OR THE ASSESSEE HAD TAKEN THE ENTIRE RESPONSIBILITY OF TRA NSPORTING THE GOODS OF THE CLIENTS. IF THERE WAS ANY LOSS IN BETWEEN WHO HAS BORNE THE LOSS WHETHER THE ASSESSEE OR THE TRUCK OWNERS. IF NO WOR K WAS ENTRUSTED TO THE ITA NO.809/AHD/2009 ASST. YEAR 2005-06 5 TRUCK OWNERS THEN ASSESSEE IS CERTAINLY NOT LIABLE FOR DEDUCTION OF TAX BUT IF WORK TAKEN FROM THE CLIENTS IS TRANSFERRED TO TH E TRUCK OWNERS ALONG WITH RISK AND LIABILITIES THEN IT WOULD BE A SUB CO NTRACT. THE ISSUE NEEDS TO BE EXAMINED AFRESH AND CLEAR FINDING IS TO BE GIVEN AS TO THE NATURE OF AGREEMENT BETWEEN THE ASSESSEE AND TRUCK OWNERS. AC CORDINGLY FOR RE- EXAMINATION OF THE ISSUE WE RESTORE THE MATTER TO T HE FILE OF AO. AS A RESULT APPEAL IS ALLOWED BUT FOR STATISTICAL PURPO SES. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED BUT FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN OPEN COURT ON 18.3.11. SD/- SD/- (BHAVNESH SAINI) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMB ER AHMEDABAD DATED : 18.3.11. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD 1.DATE OF DICTATION 14/3/2011 ITA NO.809/AHD/2009 ASST. YEAR 2005-06 6 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 15/3/ 2011 MEMBER.OTHER MEMBER. 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.. 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 ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..