Income Tax Appellate Tribunal - Mumbai
Satish Carriers, Mumbai vs Ito (Tds) 3(2), Mumbai on 4 September, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH "E", MUMBAI
BEFORE SHRI P.K. BANSAL, VICE-PRESIDENT AND
SHRI PAWAN SINGH, JUDICIAL MEMBER
ITA No.992/Mum/2014 (Assessment Year- 2005-06)
M/s Satish Carriers ITO (TDS) -3(2),
30, Kasturi Building, 10th Floor, K.G. Mittal Ayurvedic
Popat Wadi, Kalbadevi Road, Vs. Hospital Building, Charni Road,
Mumbai-400002 Mumbai-400002.
PAN: AAAFS7344D
(Appellant) (Respondent)
Assessee by Shri Uttam Chand Bohra
:
(AR)
Revenue by : Shri V. Justin (Sr. DR)
Date of hearing : 01.08.2017
Date of Pronouncement : 04.09.2017
Order Under Section 254(1) of Income Tax Act
PER PAWAN SINGH, JUDICIAL MEMBER:
1. This appeal by assessee u/s 253 of the Income-tax Act (the Act) is directed against the order of ld. CIT(A)-14, Mumbai dated 09.12.2013 for the AY 2005-06. The assessee has raised the following grounds of appeal.
1. THAT the ld. Income Tax Officer has erred in law as well as under the circumstances of the case in determining the TDS payable u/s. 194C of the Income tax Act, 1961 at Rs. 16,58,717/-.
2. THAT the learned Commissioner of Income tax (Appeals) has erred in law as well as under the circumstances of the case in confirming the order of Income Tax Officer in determining the TDS payable u/s. 194 of the Income Tax Act, 1961 at Rs. 16,58,717/-
3. THAT the learned Income tax Officer has erred in law as well as under the circumstances of the case in charging interest or Rs. 11.19.268/- u/s. 201 (1A) the Income tax Act. 1961.
4. THAT the learned Commissioner of Income tax (Appeals) has erred in law as well as under the circumstances of the case in confirming the order of the ITA No.992/M/2014- M/s Satish Carriers Income tax Officer in respect 01' charging of interest of Rs. 11.19,268/- u/s. 201(1A) of the Income tax Act. 1961.
5. THAT the Commissioner of Income tax (Appeals) has erred in law as well as under the circumstances of tax in determining the TDS payable on Truck Hire Charges in spite of the fact that provisions for TDS on hire charges were not applicable during the assessment year 2005-06.
6. THAT the Commissioner of Income tax (Appeals) has not considered the details filed before him during the course of appellate proceedings.
7. THAT the Commissioner of Income tax (Appeals) has erred in law as well as under the circumstances of tax in determining the TDS payable on Truck Hire Charges in spite of the fact that provisions for TDS on hire charges were not applicable during the assessment year 2005-06.
2. Brief facts of the case are that the Income -Tax Officer -TDS [ITO (TDS)] received information from ACIT-14(1) vide letter dated 11.01.2006 that in the return of income for AY 2005-06, the assessee has made a suo moto disallowance under section 40a (ia) of Rs. 45,00,000/-. On receipt of such information the ITO- TDS issued a notice dated 25.09.2008 to the assessee about failure to comply with the TDS provisions with regard to payment of Truck Hire Charges of Rs. 6,44,80,006/- , Labour Contract Charges of Rs. 17,21,135/- and Commission payment of Rs. 6,25,000/-. The assessee was also asked to furnish the documentary evidence regarding the compliance of TDS provision. The assessee filed its reply dated 20.10.2008 and furnished the copy of details of TDS in case of Provisional charges, Brokerage Commission and Labour Contract for the year ended on 31.03.2005. After considering the submission and reply of the assessee, the AO concluded that the provision of Chapter XVII is applicable. The ITO - TDS further observed that the real expenditure on this account is Rs.7,39,17,850/- and not Rs.6,44,80,005/-. The ITO-TDS passed order under section 201(1) holding that provisions of section 194C are applicable in respect of payment on account of Truck Hire Charges of Rs. 7,39,17,850/- and calculated TDS of 2 ITA No.992/M/2014- M/s Satish Carriers Rs.16,58,717/- ( including surcharge and edu. Cess). The AO further worked out the interest u/s 201(1A) of Rs. 11,19,268/- in its order dated 29.03.2011. On appeal before the ld. CIT(A), the order of AO was upheld. Thus, further aggrieved, the assessee has filed the present appeal before us.
3. We have heard the ld. Authorized Representative (AR) of the assessee and ld.
Departmental Representative (DR) for the Revenue and perused the material available on record. The ld. AR of the assessee argued that assessee owned his own Vehicle/Truck and also hire Truck Charges. Details of all the vehicles owned by the assessee and hired during the period were provided to the AO. With regards to discrepancies in the figures of Truck Hire charges it was submitted that Charges of Rs. 6,44,80,006/- pertains to the period from 14 June 2004 till 31 March 2005 and the amount of Rs. Rs.94,37,844/- pertains for the period from 1st April 2004 till 13 June 2004, thus the total amount mentioned in the ledger account of Truck hire charges of Rs.7,39,17,850/- is correctly mentioned therein. This fact was completely overlooked by ITO. It was further argued that there was no written contract between assessee and the Truck owner which were hired. The Freight Charges were paid to the Hirer in accordance with the engagement on some definite terms and conditions for carrying the goods. The assessee was not liable to deduct the tax from the payment made to other transporter and the same could not be disallowed. It was further argued that in the assessment order no disallowance was made by the AO while passing the assessment order u/s 143(3) dated 12.12.2007. In support of his submission, the ld. AR of the assessee relied upon the following decision:
3 ITA No.992/M/2014- M/s Satish Carriers
1. CIT vs. UNITED RICE LAND LTD. (2008) 217 CTR 0332 (P&H)
2. R.R.CARRYING CORPORATION vs. ACIT (2009) 126 ITJ 240 (Ctk)
3. MRS. KAVITA vs.ITO (2010) 134 ITJ 103 (Kol)
4. ADHARSH TRANSPORT vs. ITO (ITA NO. 161/CTK/2012)
5. CHANDRAKANT THACKAR vs. ACIT (2010) 129 ITJ (Ctk).
6. BHAIL BULK CARRIERS vs. ITO (2012) 50 SOT 0622MUM)
7. MYTHRI TRANSPORT CORPORATION vs. ACIT (2009) 124 ITJ 0970(Mad)
8. SAIYAD SAUKATALI SAIYDAMIYA VS.ITO (2013) 156 ITJ 19 (AHD)
9. DCIT VS. SATISH AGGARWAL & CO (2009) 124 ITJ (ASR) 542
10. CIT VS. SHARK ROADWAYS (P) LTD.(2017) 1 NYPCTR 475(ALL) On the other hand, ld. DR for the Revenue supported the order of authorities below. The ld. DR for the Revenue further argued that the assessee while filing the return of income suo moto made the disallowance u/s 40A(ia). Further, there was a difference in real expenditure on account of Lorry Charges. It was further argued by ld. DR for the Revenue that the assessee has not provided party wise details despite asking repeatedly. The ld. DR for the Revenue prayed that order of authorities below may be upheld or may be restored to the file of AO for party wise verification. In rejoinder argument, the ld. AR of the assessee argued that all details were filed before the AO and all those details are available before the Tribunal at page no. 26 to 46 of the Paper Book (PB).
4. We have considered the rival submission of the parties and have gone through the orders of authorities below. The ITO-TDS while passing the order under section 201(1) observed that the assessee has not filed documentary evidences regarding the details of TDS in case of professional charges, Commission and labour charges despite the repeated opportunities. On repeated persuasions the assessee filed ledger account of Truck hire charges. On perusal of such ledger account the ITO observed that Truck hire charges is shown at Rs.7,39,17,850/- as against the Rs. 6,44,80,006/- which is debited to P/L account. Accordingly, the ITO adopted 4 ITA No.992/M/2014- M/s Satish Carriers the figure of Rs. 7,39,17,850/- as against the Rs. 6,44,80,006/-. On the basis of the above observation the ITO concluded that the provisions of section 194C are applicable on payments made on account of Truck hire charges and passed the order under section 201(1) and 201(1A) of the Act. The ld CIT(A) confirmed the action of ITO holding that for the purpose of payment for carrying out any 'work' in pursuance of a 'contract' the deduction of tax at source applies under section 194C.
The Hon'ble Allahabad High Court In CIT Vs Shark Roadway (P) Ltd supra held that when the assessee paid lorry hire charges to the transporters or truck owners directly, without there being any written or oral contract, vis-à-vis its principlas; the payments to lorry hire charges to individual transporters is the direct costs attributable to the receipts of the assessee company; and section 194C is therefore not applicable.
Further, Hon'ble Punjab & Haryana High Court in CIT Vs United Rice Lands Ltd. supra held that there being neither any oral or written agreement between the assessee and the transporters for carriage of goods nor it is proved that any freight charges were paid to them in pursuance of a contract for a specific period, quality or price, assessee was not liable to deduct tax under section 194C from the payments made to the transporters.
5. Now coming to the facts of the present case, it is not in dispute that assessee is a transporter and carrying its business by its own vehicles as well as by hiring the from other persons/ trucks owners. The assessing officer passed the order under section 201 (1), 201 (1A) holding that the provisions of section 194C is applicable 5 ITA No.992/M/2014- M/s Satish Carriers without making any inquiry from the owners, whose vehicles were hired. There is nothing on record to suggest that any contract executed between the assessee and the so-called persons from whom the truck were hired. The ITO-TDS has not brought on record any material to prove that there was a written contract between the assessee and the persons from them the trucks were hired. Thus, we may conclude that the revenue has not brought any material on record to establish that the hiring of Truck by the assessee transporter from the truck owner and the payments thereof were in consequences of any written or oral agreement, hence, the provision of section 194C is not applicable. Similar view was taken by Hon'ble Allahabad High Court in CIT Versus Shark Roadways (P)Ltd and Hon'ble Punjab and Haryana High Court in United Rice Land Ltd. Thus, respectfully following the above referred decisions the appeal of the assessee is allowed.
6. In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on 4th day of September 2017.
Sd/- Sd/-
(P.K. BANSAL) (PAWAN SINGH)
VICE-PRESIDENT JUDICIAL MEMBER
Mumbai; Dated 04/09/2017
S.K.PS
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent.
3. The CIT(A), Mumbai.
4. CIT BY ORDER,
5. DR, ITAT, Mumbai
6. Guard file.
स या पत त //True Copy/
(Asstt.Registrar)
ITAT, Mumbai
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