Income Tax Appellate Tribunal - Chandigarh
M/S The Nabha Primary Co-Op ... vs Dcit, Circle , Mandi Gobindgarh on 25 February, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCHES, 'SMC', CHANDIGARH
BEFORE SHRI N.K. SAINI, VICE PRESIDENT
ITA No.755/Chd/2018
Assessment Year: 2014-15
M/s The Nabha Pri mary Co-op Vs. The DCI T,
Agricultural Development Bank Mandi,
Ltd., Basantpura Mohalla Gobindgarh
Nabha
PAN No. AAATN6364Q
(Appellant) (Respondent)
Assessee By : Sh. Dipinder Singh, Advocate
Revenue By : Smt. Chandrakanta, Sr. DR
Date of hearing : 25/02/2019
Date of Pr onouncement : 25/02/2019
ORDER
This is an appeal by the Assessee against the order dt. 23/03/2018 of Ld. CIT(A)-3, Ludhiana.
2. In the present appeal Assessee has raised the following grounds:
1) That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the addition of Rs. 1,83,452/- for alleged on account of cash Payments exceeding Rs. 20,000-00 to the vehicle owners paid applying the provisions of section 40(a) (3) which are not applicable and as such the addition is illegal, arbitrary and unjustified.
2) That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the addition of Rs. 1,83,452/- ignoring the fact that the appellant society is not covered U/S 40 (a) (3) of the Income Tax Act, 1961 because it is a agricultural cooperative society not a financial institutes.
3) That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the disallowance of deduction equal to the assessed income u/s 80 P (2) (a) (i) of the ACT.
4) That the appellant Craves leave to add, delete or amend any ground of the appeal before the appeal is finally disposed of.
3. The only grievance of the assessee in this appeal relates to the sustenance of addition of Rs. 1,83,452/- made by the Assessing Officer under section 40A(3) of the Income Tax Act, 1961 (hereinafter referred to as 'Act').
4. Facts of the case in brief are that eth assessee e-filed return of income declaring NIL income after claiming exemption under section 80P(2)(a)(i) of the Act. later on the case was selected for scrutiny.
25. During the course of assessment proceeding the Assessing Officer noticed that the assessee had claimed vehicle charges at Rs. 2,40,224/- which included payments on various dates exceeding Rs. 20,000/- and such discrepancy was pointed out in the audit report also. The Assessing Officer pointed out that the assessee had made payments amounting to Rs. 1,83,452/- to Shri Sarup Chand and Shri Anokh Singh, details of such expenses had been given in para 2 of the assessment order (for the cost of repetition the same is not repeated herein). The Assessing Officer disallowed the said amount of Rs. 1,83,452/- under section 40A(3) of the Act.
6. Being aggrieved the assesee carried the matter to the Ld. CIT(A)and submitted as under:
The above appeal stands fixed for hearing on today the 22nd of March 2018. Brief history of the case:
That the assesses is a Co-op Society and its income is exempted U/S 80 (P) (2) of the Income Tax Act, 1961. The disallowance of expenses U/S 40 a(3) of the Income Tax Act, 1961, made by assessing officer also comes under exempted income and the Ld. assessing officer at the time of assessment proceedings has erred in law as well as on facts in upholding the disallowance of deduction equal to the assessed income u/s 80 P (2) (a) (i) of the ACT in this regard.
The assessee (Co-op Society) gave loan to famers and mostly the farmer did not repay the loans in time and become defaulters. The bank authorities in order to recover the loan amount from farmers, visits the place of farmers where they reside time to time. The bank authorities mostly visits off time to catch the farmers. They sometimes visits early morning, or in the evening or as may suitable to them to catch the farmers for recovery. For this purpose the authorities has to hire car (charges are including petrol / diesel expenses) in off time as stated above and paid cash to the drivers, so to enable them to get fuel for the car. They paid hire charges in cash because mostly the payments to the vehicle owners are in off time. Moreover, car drivers /vehicle owners conditionally called cash and mostly they are villagers and don't have bank accounts.
There are so many cases in which Hon'ble Courts gave relief to the assessee who are defaulters U/S 40 a(3) of the Income Tax Act, 1961 and these are:
1) IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH "C"KOLKATA, Before Shri Mahavir Singh, Judicial Member and Shri Waseem Ahmed, Accountant Member ITA No.391/Kol/2014 Assessment Year :2010-U In the case ofNirmal Kumar Das, Midnapore vs Assessee on 11 December, 2015.
2) IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH "C" KOLKATA, Before Shri Waseem Ahmed, Accountant Member and Shri S.S.Viswanethra Ravi, Judicial Member ITA No.l603/Kol/2011 Assessment Year :2008-09, in the case of Prabir Kumar Mullick V/s. Income Tax Officer, Searsol C.S.Shop, Ward-3(1), G.T. Roadshisubagan (Kalali Gali) (West), Asansol Ranigunj (Burdwan) [ P A N N o.
AJEPM 7142 G].
Keeping in view of above stated facts and submission, it is, respectfully prayed that the appeal of assessee society may please be allowed.
7. The Ld. CIT(A) after considering the submissions of the assessee observed that the assessee had filed very vague and general submissions without any 3 documentary evidence and made the payments to only one person namely Shri Anokh Singh exceeding Rs. 20,000/- throughout the year under the vehicle hiring charges, he therefore sustained the disallowance made by the Assessing Officer.
8. Now the assessee is in appeal.
9. The Ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the payments were made to the Drivers for hiring of vehicles and none of the payment on a single day exceeded Rs. 20,000/-. It was further submitted that the payments were made for hiring of vehicles on different dates and TDS was deducted on the said payments, reference was made to page no. 36 of the assessee's paper book which is the copy of the details of the payments on which TDS was deducted.
10. On her rival submissions the Ld. Sr. DR submitted that the documents referred by the Ld. Counsel of the assesee were not produced either before the Assessing Officer or before the Ld. CIT(A) therefore this issue may be set aside to the file of the Ld. CIT(A) for verification.
11. I have considered the submissions of both the parties and carefully gone through the material available on record. In the present case admittedly the details of the expenses on which TDS has been deducted placed at page no. 36 of the assessee's paper book was not available to the Ld. CIT(A). It is also not clear as to whether the single payment had not exceeded Rs. 20,000/- for hiring of the vehicles. I therefore considering the totality of the facts, deem it appropriate to set aside this issue back to the file of the Ld. CIT(A) to be adjudicated afresh in accordance with law after considering the evidence furnished by the assessee first time before the ITAT.
12. In the result, appeal of the assessee is allowed for statistical purposes.
(Order pronounced in the open Court on 25/02/2019.) Sd/-
(N.K. SAINI) VICE PRESIDENT Place: Chandigarh Dated : 25/02/2019 AG Copy to: The Appellant, The Respondent, The CIT, The CIT(A), The DR