Income Tax Appellate Tribunal - Kolkata
Ito, Ward-2(2), Kolkata, Asansol vs M/S. Maa Tara Trasnport Co., Burnpur on 15 June, 2018
आयकर अपील य अधीकरण, यायपीठ - "D" कोलकाता,
IN THE INCOME TAX APPELLATE TRIBUNAL
KOLKATA BENCH "D" KOLKATA
Before Shri S.S.Godara, Judicial Member and
Dr. A.L. Saini, Accountant Member
ITA No.2093/Kol/2014
Assessment Year : 2010-11
Income Tax Officer V/s. M/s Maa Tara Transport Co.
W ard-2(2), Parmer Radhanagar Road, P.O.
Building, 54, G.T. Burnpur, Burdwan-713325
Road, Asansol-04 [P AN No. AAMFM 33326 M]
अपीलाथ /Appellant .. यथ /Respondent
अपीलाथ क ओर से/By Appellant Shri B. Das, Addl. CIT-DR
यथ क ओर से/By Respondent Shri Barsan Chatterjee, AR
सन
ु वाई क तार ख/Date of Hearing 07-06-2018
घोषणा क तार ख/Date of Pronouncement 15-06-2018
आदे श /O R D E R
PER S.S.Godara, Judicial Member:-
This Revenue's appeal for assessment year 2010-11 challenges correctness of Commissioner of Income Tax (Appeals)-Asansol's order dated 22.09.2014, passed in case No.142/C.I.T.(A)/Asl/W-2(2)/Asl/13-14 restricting Assessing Officer's action disallowing transport charges of₹60,68,502/- @12.5% only coming to this ₹7,58,562/-, in proceedings u/s. 143(3) of the Income Tax Act, 1961; in short 'the Act'.
Heard both the parties. Case file perused.
2. Learned Departmental Representative vehemently contends during the course of hearing that CIT(A) has erred in law as well as on facts in restricting the impugned disallowance vide following detailed discussion:-
"24. Ground 18 is against disallowance under section 40a(ia). The Assessing Officer disallowed entries transportation charge as vouchers were not produced and tax was not deducted under section 194-I. After hearing a notice was issued to Assessing Officer as under:-ITA No.2093/Kol/2014 A.Y.2010-11
ITO Wd-2(2), Asl. Vs. M/s Maa Tara Transport Co. Page 2 'In regard to disallowance of Rs.6,068,502/- under section 40a((ia), prior identification of personwise default under section 194-I is needed. This is absent. You may call for and verify the books of account and vouchers and give a report on the extent of disallowance to be made.' In reply the Assessing Officer reported as under:-
'As directed, a letter dated 23.06.2014 vide letter no. AAMFM 3326M/Wd-2(2)/Asl/2014-15/79 was issued to the assessee by seed post for verification of the fact, regarding enquiry of transactions relating to section 40a(ia) of Rs.60,68,502/- and addition of Rs.5,83,695.21 without taking views of the assessee and an opportunity was allowed to the assessee. The assessee was requested to comply on 29.06.2014 alongwith evidence in support of transactions relating to section 40a(ia) and Rs.5,83,695.21 without taking views of the assessee alaong with ledger copy of all relevant papers but the assessee has not submitted any details and not appeared till date.
The assessee or its au9thorized representative did not appear before the undersigned and did not prove the transactions relating to section 40a(ia) of Rs.60,68,502/- and addition of Rs.5,83,695.21 without taking views of the assessee along with ledger copy of all relevant papers with verification of books of account and vouchers.'
25. Analysis of above reveal that no case is made for disallowance under section 40a(ia). However, non production of vouchers prove that accounts are not correct and complete warranting assessment to best of judgment. However appellant submitted that proportionate transportation charges is coming down year after year and hence no disallowance is needed. The picture is as under:-
F.Y Transportation charges Transportation Percentage received charges paid 2007-08 Rs.2,11,81,800/- Rs.94,60,081/- 44.66% 2008-09 Rs.2,10,99,894/- Rs.69,41,277/- 32.89% 2009-10 Rs,1,88,53,303/- Rs.60,68,502/- 32.18%
26. The matter is considered. Production of vouchers is a mandatory requirement to prove correctness and completeness of accounts. Transportation charges debited depend on nature of work done, how it is executed, and other surrounding circumstances. Hence, viewing transportation charges in isolation is not a way to view correctness of accounts. In exercise of power under explanation to section 251, I hold that a disallowance is need to absorb for deficiency in accounts. The Authorised representative objected to same again by pointing to decreasing proportion of transportation charges to turnover. This is rejected since the nature of work, manner execution etc. were not established. Accordingly I estimate the disallowance to m9y best of judgment at 12.5% of sums debited and thus comes to 7,58,562/-. The Assessing Officer is directed to replace the addition of Rs.60,68,502/-
made under section 40a(i) by Rs.7,58,562/- as a disallowance to absorb deficiency in books of account and vouchers. The ground is treated as partly allowed."
3. We have given our thoughtful consideration to Revenue's above sole argument. We notice first of all that Assessing Officer had invoked u/s 40(a)(ia) of the Act on the ground that assessee had not been deducted the prescribed TDS u/s. 194-I of the Act. He sought to treat the impugned ITA No.2093/Kol/2014 A.Y.2010-11 ITO Wd-2(2), Asl. Vs. M/s Maa Tara Transport Co. Page 3 payments to be rent of the transport vehicles in question. We do not find any discussion at all either in assessment or lower appellate proceedings as to how the impugned transportation charges paid to various lorries can be held to be rental payments. There is further no finding that the same satisfied the basic threshold limit prescribed for TDS deduction in the relevant previous year.
4. Learned Departmental Representative submits at this stage that Assessing Officer had rightly disallowed assessee's claim which has been wrongly restricted 12.5% only in the CIT(A)'s order. We find in this backdrop that the Assessing Officer had not made the impugned disallowance on genuineness but on account of assessee's failure in deducting TDS. There is no reason stated in assessment order mandating the TDS deduction on the impugned transportation charges Learned DR at this stage submits that the same are in the nature of contractual payments. We do not see any liability being fastened to the payees concerned making them a party to assessee's contract. Be that as it may, the CIT(A) has exercised his statutory jurisdiction peculiar facts whilst granting part relief to the assessee. We therefore see no reason to interfere in his order under challenge.
5. This Revenue's appeal is dismissed.
Order pronounced in the open court 15/06/2018
Sd/- Sd/-
(लेखा सद%य) ( या'यक सद%य)
(Dr. A.L. Saini) (S.S.Godara)
(Accountant Member) (Judicial Member)
Kolkata,
*Dkp, Sr.P.S
(दनांकः- 15/06/2018 कोलकाता ।
आदे श क त ल प अ े षत / Copy of Order Forwarded to:-
1. अपीलाथ /Appellant-ITO Ward-2(2), Parmer Building, 54, G.T. Road, Asansol-04
2. यथ /Respondent-M/s Maa Tara Transport Co. Radhanagar Road, P.O. Burnpur Burdwan-713325
3. संबं3धत आयकर आयु4त / Concerned CIT Kolkata 4. आयकर आयु4त- अपील / CIT (A) Kolkata
5. 7वभागीय 'त'न3ध, आयकर अपील य अ3धकरण, कोलकाता / DR, ITAT, Kolkata ) 6. गाड< फाइल / Guard file.
By order/आदे श से, /True Copy/ Sr. Private Secretary, Head of Office/DDO आयकर अपील य अ3धकरण, कोलकाता ।