EAGLE HOME APPLIANCES P. LTD (FORMLERY TRADE TEAM P. LTD,PUNE vs. DCIT 7(3),

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ITA 1066/MUM/2011Status: DisposedITAT Pune18 March 2019AY 2006-075 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The tribunal held that disallowance for non-deduction of TDS on transporter payments was justified due to lack of evidence. However, Provident Fund payments made before the due date of filing the return were allowed as deduction, following Supreme Court and High Court precedents. Interest charges were upheld as mandatory.

What were the facts?

The assessee challenged disallowances related to non-deduction of TDS on transporter payments and denial of deduction for Provident Fund payments made before the due date of filing the return. The assessee also challenged charging of interest under sections 234A, 234B, and 234C.

What were the issues?

Whether disallowance under Section 40(a)(ia) is justified for non-deduction of TDS on transporter payments, and whether Provident Fund payments made before the due date of filing the return are deductible.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 234A,Section 234B,Section 234C

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Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM

For Appellant: Shri M.K. Kulkarni
For Respondent: Shri Sanjeev Ghei

आदेश / ORDER

PER VIKAS AWASTHY, JM :

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-13, Mumbai dated 29-10-2010 for the assessment year 2006-07.

2 ITA No.1066/MUM/2011

2.

The assessee in appeal has raised 7 grounds. Shri M.K. Kulkarni appearing on behalf of the assessee submitted at the outset that the ground Nos. 1 to 3 of the appeal are not pressed. Thus, the effective grounds assailing the additions are ground Nos. 4 and 5.

2.1 In ground No. 4 the assessee has assailed disallowance of Rs.1,24,91,463/- u/s. 40(a)(ia) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), in respect of non deduction of tax at source on the payments made to the transporters. The ld. Counsel for the assessee contended that the assessee had made payments to the transporters for movement of goods to the godowns. The transportation of goods were finally recovered at the time of sale of goods as reimbursement of expenditure. Therefore, the assessee was not liable for deducting tax at source on such payments to the transporter.

2.2 In respect of ground No. 5 of the appeal the ld. Counsel for the assessee submitted that the authorities below have erred in making addition by denying deduction of Rs.10,88,887/- in respect of payment of Provident Fund before due date of filing of return of income. The ld. Counsel submitted that the issue is squarely covered in favour of the assessee by the decision of Hon’ble Supreme Court of India in the case of Commissioner of Income Tax Vs. Alom Extrusions Ltd. reported as 319 ITR 306. The ld. Counsel fairly pointed that though the addition was made during assessment proceedings the issue was not raised before the Commissioner of Income Tax (Appeals) in the grounds of appeal. However, the ground was orally mentioned during First Appellate proceedings but the Commissioner of Income Tax (Appeals) has not taken cognizance of the same.

3 ITA No.1066/MUM/2011

3.

Shri Sanjeev Ghei representing the Department vehemently defended the impugned order and prayed for dismissing the appeal of assessee.

4.

Both sides heard. Orders of the authorities below perused. The ld. Counsel for the assessee has sated at the Bar that he is not pressing ground Nos. 1, 2 and 3 of the appeal. Thus, in view of the statement made, the ground Nos. 1 to 3 of the appeal are dismissed as not pressed.

5.

The ground No. 4 of the appeal is directed against disallowance of Rs.1,24,91,463/- made u/s. 40(a)(ia) of the Act. The disallowance has been made for non-compliance of TDS provisions in respect of payments made to the transporters. The ld. Counsel for the assessee has argued that the payments made to the transporters were subsequently recovered as reimbursement of expenditure from the dealers, therefore, no TDS was required to be deducted. We do not find substance in such arguments, as the assessee has not furnished any documentary evidence to substantiate his contentions. The assessee was under obligation to comply with the provisions of Chapter XVIIB on the payments made to the transporters. We do not find any cogent reason for non-deduction of TDS on the payments made by the assessee to transporters. Accordingly, ground No. 4 of the appeal by the assessee is dismissed being devoid of any merit.

6.

In ground No. 5 of the appeal, the assessee has assailed disallowance of deduction of Rs.10,88,887/- on account of Provident Fund payments made before the due date of filing return of income. It is no more res integra that Provident Fund payments made before due date of filing return of income are to be allowed as deduction. The Hon’ble Bombay High Court in the case of Commissioner of Income Tax Vs. Ghatge

4 ITA No.1066/MUM/2011

Patil Transports Ltd. reported as 368 ITR 749 and the Hon’ble Supreme Court of India in the case of Commissioner of Income Tax Vs. Alom Extrusions Ltd. (supra) have held that the payments on account of Provide Fund made before due date of filing return of income are to be allowed as deduction. The Department has not disputed the payment of Provident Fund by the assessee before due date of filing return of income. Thus, in view of the well settled law and undisputed facts, the assessee’s claim in ground No. 5 of the appeal is allowed.

7.

In ground No. 6 of the appeal, the assessee has assailed charging of interest u/s. 234A, 234B and 234C of the Act. Charging of interest u/s. 234A, 234B and 234C is consequential and mandatory, hence, ground No. 6 raised in appeal by the assessee is dismissed being devoid of any merit.

8.

The ground No. 7 is general in nature, hence, requires no adjudication.

9.

In the result, the appeal of assessee is partly allowed in the terms aforesaid.

Order pronounced on Monday, the 18th day of March, 2019.

Sd/- Sd/- (डी. करुणाकरा राव/D. Karunakara Rao) (ववकास अवस्थी / Vikas Awasthy) ऱेखा सदस्य / ACCOUNTANT MEMBER न्याययक सदस्य / JUDICIAL MEMBER ऩुणे / Pune; ददनाांक / Dated : 18th March, 2019 RK

5 ITA No.1066/MUM/2011

आदेश की प्रयिलऱवऩ अग्रेवषि / Copy of the Order forwarded to : अऩीऱाथी / The Appellant. 1. प्रत्यथी / The Respondent. 2. आयकर आयुक्त (अऩीऱ) / The CIT(A)-13, Mumbai 3. आयकर आयुक्त / The CIT-7, Mumbai 4. ववभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, “ए” बेंच, 5. ऩुणे / DR, ITAT, “A” Bench, Pune. गाडड फ़ाइऱ / Guard File. 6. //सत्यावऩत प्रयत // True Copy// आदेशानुसार / BY ORDER,

यनजी सधचव / Private Secretary, आयकर अऩीऱीय अधधकरण, ऩुणे / ITAT, Pune

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