Income Tax Appellate Tribunal - Kolkata
Four Star International, Kolkata vs Department Of Income Tax
अधीकरण Ûयायपीठ - "बी", कोलकाता,
आयकर अपीलीय अधीकरण, कोलकाता
IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH-"B": KOLKATA
सम¢)
सम¢ ौी बी.
(सम¢ बी आर.
आर िमƣल,् Ûयायीक सदःय,
सदःय एवं ौी सी.
सी डȣ.
डȣ राव,
राव लेखा सदःय,)
सदःय
[Before Hon'ble Shri B.R. Mittal, J.M. & Hon'ble Shri C.D. Rao, A.M]
आयकर अपील संÉया /I.T.A. No. 428/Kol./2011
िनधॉरण वषॅ/Assessment Year : 2007-2008
Deputy Commissioner of Income Tax, -vs.- M/s. Four Star International, Kolkata
Circle-49, Kolkata (PAN : AAAFF 9456 D)
(Appellant) (Respondent)
Appellant by : Shri A.K. Pramanik, D.R.
Respondent by : Shri A.K. Bhattacharya, A.R.
आदे श/O R D E R
Per Shri B. R. Mittal, Judicial Member / ौी बी.
बी आर.
आर िमƣल,् Ûयायीक Ûयायीक सदःय :
The Department has filed this appeal for assessment year 2007-08 against the order of ld. Commissioner of Income Tax (Appeals) dated 24.09.2010 on following grounds :-
i) "That on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of Rs.25,68,252/- & Rs.17,06,781/- under the heads Labour charges and Loading &Unloading charges.
ii) That on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in holding his decision on the basis of submission of the assessee only without considering the facts of noncompliance by the labours for justifying the claims of the assessee.
iii) That on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in holding his decision considering the plea of political interference for non-compliance of the labours which cannot be the ground for deleting the addition.
2. The assessee is a partnership firm engaged in the business of export of raw cotton and cotton yarn to Bangladesh. During the assessment year under consideration, the assessee debited a sum of Rs.17,06,781/- under the head "loading and unloading charges" and of 2 ITA No. 428/Kol./2011 Rs.25,68,252/- under the head "labour charges". Assessing Officer stated that the assessee was required to deduct TDS as per provisions of section 194C of the Act. Since the assessee failed to deduct TDS, Assessing Officer disallowed the above claim of the assessee under section 40(a)(ia) of the Act. Being aggrieved, assessee filed appeal before the first appellate authority.
3. On behalf of assessee, it was contended that the above payments were made by the asseessee to individual labourers, which were hired directly. Therefore, the assessee was not required to deduct TDS in respect of the expenditure incurred under the head "labour charges"
of Rs.25,68,252/- and under the head "loading & unloading" of Rs.17,06,781/-. During the course of appellate proceedings, assessee produced evidence in support of its claim that payments were made directly to individual labourers and not to any contractor. Ld. CIT(Appeals) asked the Assessing Officer to submit his remand report. Ld. CIT(Appeals) has stated that after issue of two reminders, Assessing Officer submitted his report. Ld. CIT(Appeals) obtained rejoinder to the said remand report from the assessee and thereafter held that there is nothing to show that the impugned payments were made by the assessee to any contractor(s) under a contract for which reason provision of section 194C was applicable. Therefore, the provisions of section 40(a)(ia) of the Act cannot be applied to those payments. Hence, ld. Commissioner of Income-tax (Appeals) deleted the disallowances of labour charges and loading and unloading expenses of Rs.25,68,252/- and Rs.17,06,781/- respectively made by the Assessing Officer. Hence, Department is in appeal before the Tribunal.
4. During the course of hearing, ld. DR relied on the order of Assessing Officer. He further mentioned pages 3 to 25 of the paper book and submitted that these were the vouchers towards labour charges and the amounts exceeded Rs.50,000/-. He further referred pages 123 to 128 of the paper book, and submitted that these are the vouchers for loading & unloading expenses and the amounts also exceeded Rs.50,000/- against each voucher. He submitted that the order of Assessing Officer is justified to apply provision of section 40(a)(ia) of the Act as the assessee failed to deduct TDS.
5. On the other hand, ld. AR submitted that these are the consolidated vouchers of the expenses prepared by the assessee but every payment was made on the particular date to individual labourers and no payment was made exceeding Rs.20,000/- at a time and Rs.50,000/- in aggregate. He submitted that the vouchers placed at pages 3 to 25 of the paper 3 ITA No. 428/Kol./2011 book and pages 123 to 128 of the paper book are not the vouchers for making all amounts to a particular person, but these vouchers were prepared for internal purposes by the assessee towards total expenses incurred on a particular date. To substantiate his submission, ld. AR referred pages 26 to 121 of the paper book relating to payment of labour charges and pages 129 to 152 of the paper book relating to labour charges for loading & unloading. He submitted that each of the payments was made to individual labourers after taking their signature. He further submitted that assessee also filed requisite details before the first appellate authority and the Assessing Officer in his remand report could not controvert the documents produced by the assessee.
6. We have carefully considered the submissions of the ld. representatives of the parties and the orders of authorities below. We have also gone through the relevant pages of the paper book. On consideration of receipted copy placed at pages 26 to 121 of the paper book relating to labour charges and pages 129 to 152 of the paper book relating to payment of labour charges under the head 'loading and unloading charges', we find substance in the submission of ld. AR that the assessee made individual payments to the labourers and not to a particular contractor. No evidence has also been placed on record by the Department to substantiate that assessee made payments to the individual contractor and not to the labourers individually. We agree with ld. AR that the copy of the vouchers placed at pages 3 to 25 of the paper book relating to labour charges and loading and unloading charges are the vouchers prepared for a particular date and none of the vouchers is in the name of the particular person evidencing the payment of the amount to a contractor. Considering the above facts, we agree with the order of ld. CIT(Appeals) that provisions of section 194C of the Act are not applicable in respect of the above expenses debited by the assessee and consequently, no disallowance under 40(a)(ia) of the Act could be made. We uphold the order of ld. CIT(Appeals) by rejecting the grounds of appeal taken by the Department.
7. In the result, appeal of the Department is dismissed.
ORDER PRONOUNCED IN THE OPEN COURT ON 01/07/2011.
Sd/- Sd/-
सी.
सी डȣ.
[C. D. Rao (सी डȣ राव)]
राव बी.
बी आर.
[ B.R. Mittal /बी आर िमƣल ् ]
Accountant Member/ लेखा सदःय Judicial Member/ Ûयायीक सदःय ]
Dated : 01/ 07/ 2011
4 ITA No. 428/Kol./2011
Copy of the order forwarded to:
1. M/s. Four Star International, Narayanpur, P.O. Rajarhat, Gopalpur, Kolkata-136.
2. DCIT, Circle-49, Kolkata, Uttarapan Building, Manicktala Civic Centre, Ultadanga, Kolkata-54.
3 Commissioner of Income-tax (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.