ITO, Ward - 36(2), Kolkata, Kolkata v. M/s. S.S. Impex, Kolkata

ITA 977/KOL/2011 | 2006-2007
Pronouncement Date: 23-09-2011 | Result: Dismissed

Appeal Details

RSA Number 97723514 RSA 2011
Assessee PAN ABBFS7153A
Bench Kolkata
Appeal Number ITA 977/KOL/2011
Duration Of Justice 2 month(s) 19 day(s)
Appellant ITO, Ward - 36(2), Kolkata, Kolkata
Respondent M/s. S.S. Impex, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 23-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 23-09-2011
Assessment Year 2006-2007
Appeal Filed On 04-07-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA ( ) . . ) [BEFORE HONBLE SRI S.V. MEHROTRA A.M. & HONBLE SRI MAHAVIR SINGH J.M.] ' ' ' ' / I.T.A NO. 977/KOL/2011 #$ %& / ASSESSMENT YEAR : 2006-2007 INCOME TAX OFFICER WARD-36(2) KOLKATA -VS.- M/S. S.S. IMPEX KOLKATA (PAN : ABBFS 7153 A) ( '( /APPELLANT ) ( )*'( / RESPONDENT ) FOR THE APPELLANT : SHRI P.P. SARKAR D.R. FOR THE RESPONDENT : SHRI S.M. SURANA A.R. + / ORDER PER SHRI S.V. MEHROTRA ACCOUNTANT MEMBER/ . . :- THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMEN T YEAR 2006-07 AGAINST ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XX KOLKATA DA TED 05.04.2011 ON FOLLOWING GROUNDS :- (1) FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A.) WAS NOT JUSTIFIED IN GIVING RELIEF OF RS.69 32 084/- WHICH WAS ADDED UNDER SECTION 40(A)(IA) OF THE ACT. (2) FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A.) ERRED IN GIVING RELIEF OF RS.17 36 100/- OUT OF (1) ABOVE BY NOT CONSIDERING THE NECESSITY OF FILING FORM 15J BY THE ASSESSEE TO THE PRESCRIBE D AUTHORITY FOR NON-DUCTION OF TAX. (3) FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A.) ERRED IN GIVING RELIEF OF RS.51 95 984/- OUT OF (1) ABOVE BY OVERLOOKING THAT THE WHOLE PAYMENT WAS MADE TO TRANSPORT AGENCIES AND NOT THE INDIVIDUAL TRUCK OWNER. (4) FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A.) ERRED IN OBSERVING THAT THERE WAS NO ANY CONTRACT BETWEEN TH E ASSESESE AND TRANSPORT AGENCIES. 2. THE ASSESSEE-FIRM IN THE RELEVANT ASSESSMENT YE AR WAS ENGAGED IN THE BUSINESS ACTIVITIES AS TRANSPORTER AND CLEARING AND FORWARDI NG AGENT. IN THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSING OFFICER NOTICED THAT ASSESSE E HAD MADE FREIGHT PAYMENTS TO VARIOUS TRANSPORT ORGANIZATIONS AMOUNTING TO RS.51 95 984/- AND TO INDIVIDUAL TRUCK OWNERS AMOUNTING TO RS.17 36 100/-. ASSESSING OFFICER NOTICED THAT A SSESSEE HAD MADE PAYMENTS TO THE ABOVE ITA NO.977/KOL./2011 2 SUB-CONTRACTORS WITHOUT DEDUCTING TAX AT SOURCE AS REQUIRED UNDER THE PROVISIONS OF SECTION 194C FOR PAYMENTS EXCEEDING RS.50 000/-. HE THEREF ORE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE AMOUNT OF RS.69 32 084/- BE NOT DISALLOWED AND ADDED BACK UNDER SECTION 40(A)(IA) FOR NON-DEDUCTION OF TDS UNDER SECTION 194C. THE ASSESE SE IN ITS SUBMISSIONS STATED THAT IT WAS NEW ENTRANT IN THE TRANSPORT BUSINESS AND HAD LITTL E KNOWLEDGE OF INCOME TAX ACTS AND RULES. ASSESSING OFFICER HOWEVER DID NOT ACCEPT THE ASSE SSEES CONTENTION AS THE ACCOUNTS HAD DULY BEEN AUDITED UNDER SECTION 44AB. HE THEREFORE MAD E THE DISALLOWANCE OF RS.69 32 084/-. 3. BEFORE THE LD. CIT(APPEALS) IT WAS SUBMITTED TH AT AS REGARDS THE PAYMENTS OF RS.17 36 100/- MADE TO TRUCK OWNERS THEY HAD SUBMI TTED FORM NO. 15I TO THE ASSESSEE AND THEREFORE THERE WAS NO OBLIGATION TO DEDUCT TAX AT SOURCE IN VIEW OF THE SECOND PROVISO TO SECTION 194C(3). IT WAS POINTED OUT THAT THE ASSESS ING OFFICER MADE DISALLOWANCE ON THE GROUND THAT FORM NO. 15J WAS NOT SUBMITTED TO THE P RESCRIBED AUTHORITY. IT WAS FURTHER CLARIFIED THAT ASSESSING OFFICER WRONGLY STATED IN THE REMAND REPORT THAT FORM NO. 15I OBTAINED FROM THE TRUCK-OWNERS WAS NOT PRODUCED AT THE ASSESSMENT STA GE. AS REGARDS PAYMENTS OF RS.51 95 984/- MADE TO TRANSPORTERS WITHOUT DEDUCTING TAX AT SOURC E UNDER SECTION 194C THE ASSESSEE INTER ALIA SUBMITTED THAT IT DID NOT ASSIGN ANY PARTICUL AR PORTION OF WORK TO THE TRANSPORT OPERATORS. NO SUB-CONTRACT AGREEMENT EITHER WRITTEN OR ORAL EXISTED BETWEEN THE ASSESSEE AND THE TRUCK- OPERATORS OR INDIVIDUAL TRUCK-OWNERS. IT WAS CLARIF IED THAT ASSESSEE WAS A TRANSPORTER AND HAD TO HIRE TRUCKS FROM OPEN MARKET AND IT WAS NOT POSSIBL E FOR THE ASSESSEE TO FIND OUT TRUCKS FOR DIFFERENT DESTINATIONS AND FOR THIS PURPOSE ASSESS EE HAD TO TAKE THE SERVICES OF DIFFERENT TRANSPORT OPERATORS WHO ARRANGED THE TRUCKS ON PAY MENT OF BROKERAGE. BUT THERE WAS NO ORAL OR WRITTEN CONTRACT WITH THESE TRANSPORT OPERATORS. TH E ASSESESE HAD MAINTAINED ACCOUNTS OF TRANSPORT OPERATORS ONLY TO KEEP TRACK OF THE TRUCK OWNERS THROUGH WHOM THE TRUCK WAS ARRANGED. THE TRANSPORT OPERATORS HAD CHARGED BROKE RAGE WHICH WAS DULY REFLECTED IN THE ACCOUNTS. IT WAS FURTHER CLARIFIED THAT THE GOODS W ERE NOT TRANSPORTED BY ANY TRANSPORT OPERATOR BUT BY THE TRUCK OWNERS AGAINST SEPARATE GRS WHICH WAS ALSO EVIDENT FROM THE BILLS RAISED BY THE ASSESSEE ON ITS PRINCIPAL. THE INDIVIDUAL TRUCK NUMBERS WERE CLEARLY MENTIONED IN EACH BILL WHICH CORROBORATED THE ASSESSEES CONTENTION THAT T HE PERSONS IN WHOSE NAME LEDGER ACCOUNT WAS OPENED WERE MERELY BROKERS THROUGH WHOM TRUCKS WERE HIRED. 4. LD. CIT(APPEALS) DELETED THE DISALLOWANCE OF RS. 17 36 100/- FOLLOWING THE DECISION OF ITAT A BENCH KOLKATA IN THE CASE OF ANURAG AGRA WAL IN ITA NO. 425/KOL./2010 BY ITA NO.977/KOL./2011 3 OBSERVING THAT PROVISIONS OF SECTION 194C ARE APPLI CABLE ONLY WHERE THE PAYMENTS ARE MADE IN PURSUANCE OF CONTRACT. BUT THE ASSESSING OFFICER HA D BROUGHT NO MATERIAL ON RECORD TO SHOW THAT THERE WAS ANY CONTRACT BETWEEN THE ASSESSEE AN D THE TRANSPORT OPERATORS OR INDIVIDUAL TRUCK- OWNER. 5. LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE RELIED ON THE ASSESSMENT ORDER AND SUBMITTED THAT BEFORE THE ASSESSING OFFICER IT WAS NOT CONTENDED THAT INDIVIDUAL TRUCK OWNERS HAD FILED FORM 15I. IT WAS PRODUCED BEFORE T HE LD. CIT(APPEALS) FOR THE FIRST TIME. LD. COUNSEL REFERRED TO PAGE 6 OF LD. CIT(APPEALS)S OR DER AND POINTED OUT THAT ASSESSEE HAD SPECIFICALLY REFUTED THE CONTENTION OF ASSESSING OF FICER THAT FORM NO. 15I WAS NOT PRODUCED AT THE ASSESSMENT STAGE. HE RELIED ON THE DECISION OF THE HONBLE KOLKATA HIGH COURT IN THE CASE OF CIT VS.- STUMM INDIA IN ITA NO. 127 OF 2009. IN REGARD TO DISALLOWANCE OF RS.51 95 984/- WHEREIN IT HAS BEEN HELD THAT IN THE ABSENCE OF EVI DENCE OF PAYMENT MADE BY THE ASSESSEE TO THE TRANSPORTERS IN PURSUANCE OF CONTRACT FOR CARRYING OF GOODS THE QUESTION OF DEDUCTION UNDER SECTION 194C DOES NOT ARISE. HE ALSO RELIED ON THE DECISION OF ITAT KOLKATA IN THE CASE OF CAPITAL TRANSPORT CORPORATION VS.- ITO IN ITA NO. 1753/KOL./2009 FOR THE ASSESSMENT YEAR 2006-07 ORDER DATED 11.08.2011 IN REGARD TO DISALL OWANCE OF RS.17 36 100/-. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. GROUND NO. 1 REFERS TO AGGREGATE OF SUM MENTIONED I N GROUNDS NO. 2 & 3. THEREFORE FIRST WE TAKE UP GROUND NO. 2 IN REGARD TO RELIEF OF RS.17 3 6 100/- GRANTED BY LD. CIT(APPEALS). THE ASSESSEES CONTENTION WAS THAT HE HAD OBTAINED FORM NO. 15I FROM INDIVIDUAL TRUCK OWNERS AND HAD PRODUCED THE SAME BEFORE THE REVENUE AUTHORITIE S. HOWEVER ASSESSING OFFICER HAD DENIED THIS CLAIM. 6.1. WE FIND THAT IN THE WRITTEN SUBMISSION FILED B EFORE LD. CIT(APPEALS) AS REPRODUCED AT PAGE 4 OF HIS ORDER THE ASSESSEE INTER ALIA STAT ED AS UNDER :- 6. THERE IS NO DISPUTE THAT THE ASSESSEE HAS OBTA INED FORM NO. 15I AS REQUIRED UNDER THE ACT AND WAS DULY VERIFIED IN THE PRESCRIBED MANNER AND WAS SUBMITTED IN THE PRESCRIBED FORM. LD. CIT(APPEALS) HAS CONSIDERED THIS ASPECT WITH RE FERENCE TO REMAND REPORT OF ASSESSING OFFICER. HE OBSERVED IN PARA 7 THAT ASSESSEE HAD CL EARLY MENTIONED IN ITS LETTER DATED 10.12.2008 FILED AT THE ASSESSMENT STAGE THAT THE TRUCK OWNERS HAD SUBMITTED FORM NO. 15I WHICH HAS ALSO ITA NO.977/KOL./2011 4 BEEN ACKNOWLEDGED IN THE REMAND REPORT. UNDER SUCH CIRCUMSTANCES IT CANNOT BE DOUBTED THAT ASSESSEE HAD OBTAINED FORM NO. 15I FROM THE TRUCK O WNER.. IN THE BACKDROP OF THIS FACTUAL POSITION WE FIND THAT THE ISSUE IS SQUARELY COVERE D BY THE DECISION OF ITAT MUMBAI BENCH IN THE CASE OF SHRI VIPIN P. MEHTA VS.- ITO IN ITA NO . 3317/MUMBAI/2010 VIDE ORDER DATED 20.05.2011 WHEREIN IT HAS BEEN HELD AS UNDER :- .ALL THESE PROVISIONS INDICATE THAT THE FAILUR E ON THE PART OF THE ASSESSEE WHO IS THE PAYER OF THE INTEREST TO FILE THE DECLARATI ONS GIVEN TO HIM BY THE PAYEES OF THE INTEREST WITHIN THE TIME LIMIT SPECIFIED IN SUB-SE CTION (2) TO SECTION 197A IS DISTINCT AND SEPARATE AND MERELY BECAUSE THERE IS A FAILURE ON T HE PART OF THE ASSESSEE TO SUBMIT THE DECLARATIONS TO THE INCOME-TAX DEPARTMENT WITHI N THE TIME LIMIT IT CANNOT BE SAID THAT THE ASSESSEE DID NOT HAVE DECLARATIONS WITH HI M AT THE TIME WHEN HE PAID THE INTEREST TO THE PAYEES. THAT WOULD BE A SEPARATE MA TTER AND SEPARATE PROOF AND EVIDENCE IS REQUIRED TO SHOW THAT EVEN WHEN THE ASS ESSEE PAID THE INTEREST HE DID NOT HAVE THE DECLARATIONS FROM PAYEES WITH HIM AND THER EFORE HE OUGHT TO HAVE DEDUCTED THE TAX FROM THE PAYMENT. NO SUCH EVIDENCE OR PROOF HAS BEEN BROUGHT BY THE DEPARTMENT. FOR THE AFORESAID REASONS WE ACCEPT THE ASSESSEES CLAIM THAT SINCE HE HAD THE DECLARATIONS OF THE PAYEES IN THE PRESCRIBED F ORM BEFORE HIM AT THE TIME WHEN THE INTEREST WAS PAID HE WAS NOT LIABLE TO DEDUCT TAX THEREFROM UNDER SECTION 194A. IF HE WAS NOT LIABLE TO DEDUCT TAX SECTION 40(A)(IA) IS NOT ATTRACTED. THERE IS NO OTHER GROUND TAKEN BY THE INCOME TAX AUTHORITIES TO DISALLOW THE INTEREST. WE THEREFORE ACCEPT THE ASSESSEES APPEAL AND DELETE THE DISALLOWANCE OF IN TEREST OF RS.7 87 291/-. 6.2. THEREFORE IN VIEW OF THE DECISION DATED 20.05 .2011 IN THE CASE OF SHRI VIPIN P. MEHTA VS.- ITO IN ITA NO. 3317/MUMBAI/2010 AS TAKEN NOTE BY ITAT KOLKATA IN THE CASE OF CAPITAL TRANSPORT CORPORATION VS.- ITO IN ITA NO. 1753/KOL ./2009 FOR THE ASSESSMENT YEAR 2006-07 ORDER DATED 11.08.2011 DISALLOWANCE WAS NOT WARRAN TED. IN THE RESULT GROUND NO. 2 OF THE APPEAL IS DISMISSED. 7. AS REGARDS GROUND NO. 3 IN WHICH THE DELETION O F DISALLOWANCE OF RS.51 95 984/- IS ASSAILED IT IS NOT DISPUTED THAT NO SUB-CONTRACT A GREEMENT EITHER WRITTEN OR ORAL EXISTED BETWEEN THE ASSESSEE AND THE TRUCK OPERATORS OR IND IVIDUAL TRUCK OWNERS. FURTHER IT IS ALSO NOT DISPUTED THAT THE SERVICES OF DIFFERENT TRANSPORT O PERATORS WERE TAKEN MERELY FOR ARRANGING THE TRUCKS ON HIRE. BUT THE PAYMENT WAS MADE DIRECTLY T O THE TRUCK OWNERS. UNDER SUCH CIRCUMSTANCES IT COULD NOT BE SAID TO BE A CASE OF SUB-CONTRACT BEING ASSIGNED TO TRANSPORT OPERATORS PARTICULARLY WHEN THEY HAD NOT TAKEN ANY RESPONSIBILITY IN REGARD TO TRANSPORTATION OF GOODS ON BEHALF OF ASSESSEE. WE FIND THAT HONBLE K OLKATA HIGH COURT IN THE CASE OF IN THE CASE OF CIT VS.- STUMM INDIA IN ITA NO. 127 OF 2009 (UN REPORTED) HAS HELD AS UNDER :- THIS APPEAL IS SOUGHT TO BE PREFERRED AGAINST THE JUDGMENT AND ORDER OF THE LEARNED TRIBUNAL IN RELATION TO THE ASSESSMENT YEAR 2005-06 DATED OCTOBER 24 ITA NO.977/KOL./2011 5 2008 BEING AGGRIEVED BY A PORTION OF THE SAME IT I S URGED BEFORE US THAT THE LEARNED TRIBUNAL OUGHT NOT TO HAVE ACCEPTED THE JUD GMENT AND ORDER OF THE CIT (APPEAL) WHO HAS QUASHED THE DISALLOWANCE OF DEDUCT ION OF RS.41 33 710/- AND ON ACCOUNT OF TAX DEDUCTION AT SOURCE. THE LEARNED TRI BUNAL HAS RECORDED THE FACT THAT THE DEPARTMENT HAS NOT BEEN ABLE TO BRING ANY MATER IAL ON RECORD TO SHOW THAT THE ASSESSEE HAS MADE THE PAYMENT TO THE TRANSPORTERS I N PURSUANCE OF CONTRACT FOR CARRIAGE OF GOODS OF THE ASSESSEE AND THE QUESTION OF DEDUCTION AT SOURCE UNDER SECTION 194C DOES NOT AND CANNOT ARISE. IN THE ABSENCE OF EVIDENCE OF PAYMENT MADE BY THE A SSESSEE TO THE TRANSPORTERS THE ASSESSEE CANNOT BE SADDLED WITH THE LIABILITY OF DE DUCTING TAX AT SOURCE. BEFORE US NO OTHER POINT HAS BEEN URGED NOT IT IS SAID THAT T HE AFORESAID FACT FINDING IS TRUTHFUL WITHOUT ANY BASIS WHATSOEVER. HENCE WE DISMISS THE APPEAL HAVING FOUND NO POINT OF LAW HAVING BEEN INVOLVED. THE TERM SUB-CONTRACT AS CONTEMPLATED UNDER SECTI ON 194C IMPLIES THAT WHATEVER RESPONSIBILITIES ARE UNDERTAKEN BY THE PRINCIPAL T HE SAME ARE BEING ASSIGNED TO SUB-CONTRACTOR. IN VIEW OF THE DECISION OF HONBLE KOLKATA HIGH COU RT (SUPRA) IN THE ABSENCE OF ANY CONTRACT PROVISIONS OF SECTION 194C COULD NOT BE INVOLVED. 8. IN THE LIGHT OF ABOVE DISCUSSION WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT (APPEALS) THEREFORE GROUND NO. 3 OF THE A PPEAL IS DISMISSED. 9. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/ 09/2011. SD/- SD/- [ MAHAVIR SINGH / ] [S.V. MEHROTRA/ ( . . )] JUDICIAL MEMBER/ ACCOUNTANT MEMBER/ DATED : 23 / 09/ 2011 COPY OF THE ORDER FORWARDED TO: 1. M/S. S.S. IMPEX 7 RED CROSS PLACE KOLKATA-1. 2 ITO WARD-36(2) KOLKATA PODDAR COURT 18 RABIN DRA SARANI KOLKATA- 700 001. 3. CIT(APPEALS)- KOLKATA 4. CIT- KOLKATA 5 . DR KOLKATA BENCHES KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR I.T.A.T. KOLKATA LAHA SR. P.S.