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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI S.S.GODARA
PER S.S. GODARA, JM :
This assessee’s appeal for AY 2007-08 arises against the CIT(A)-9, Pune’s order dated 23-05-2019 passed in case No. CIT(A),Pune-9/10226/2017-18/30 involving proceedings under Section 143(3) of the Income Tax Act, 1961 in short the Act.
Heard both the parties. Case file perused.
Coming to the assessee’s first and foremost substantive ground that both the lower authorities have erred in law and on facts in invoking section 40(a)(ia) disallowance of Rs.16,62,422/-, it transpires during the course of hearing that the same pertains to his freight and transportation charges in wholesale activity. Both the lower authorities held him to have made contractual payments to transporters requiring TDS
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deduction u/s.194C of the Act. The Revenue also vehemently contended that even an oral agreement is suffice to attract the foregoing TDS deduction provision. It also concluded by the hon’ble apex court’s recent decision in Shree Chaudhary Transport Co. Vs. ITO - 2020 SCC Online 610 (SC) in support of the impugned disallowance.
I have given my thoughtful consideration to the pleadings and find no merit in the Revenue’ stand. There would be hardly any dispute in contractual payment u/s.194C indeed attracts TDS deduction subject to all the terms and conditions therein. The vexed question herein is that of contractual relation between the assessee and the payees herein. The latter are found to have only transported assessee’s goods without having undertaken any contractual liability demurrage etc. That being the case, I quote Bhail Bulk Carriers Vs. ITO in ITA No.3536/Mum/2011, dated 07-03-2012 that Section 194C itself does not apply in the given facts and circumstances. The impugned disallowance stands deleted thereby. The assessee succeeds in his instant former substantive ground.
Next comes similar 40(a)(ia) disallowance on assessee’s advertisement expenses of Rs.1,44,020/-. He first of all contended to have only claimed an amount of Rs.42,308/- wherein no payment exceeding the statutory limit of Rs.20,000/- had been made to the payee(s) concerned. I am of the view that the same requires AO’s factual verification and 3 Satish I. Agrawal
fresh adjudication. I order accordingly. This latter substantive ground is set aside to the Assessing Officer accordingly.
No other ground has been pressed.
This assessee’ appeal is partly allowed in above terms. Order pronounced in the Open Court on 30th May, 2022. (S.S.GODARA) JUDICIAL MEMBER पुणे Pune; "दनांक Dated : 30th May, 2022 Satish
आदेश क" ""त"ल"प अ"े"षत / Copy of the Order is forwarded to : 1. अपीलाथ" / The Appellant;
""यथ" / The Respondent;
The CIT(A)-9, Pune
The Pr.CIT-6, Pune
"वभागीय ""त"न ध, आयकर अपील!य अ धकरण, पुणे “SMC” / DR ‘SMC’, ITAT, Pune; 6. गाड" फाईल / Guard file.
आदेशानुसार/ BY ORDER,
//// Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
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Date
Draft dictated on 26-05-2022 Sr.PS
Draft placed before author 30-05-2022 Sr.PS
Draft proposed & placed before -- JM the second member
Draft discussed/approved by -- JM Second Member.
Approved Draft comes to the Sr.PS Sr.PS/PS
Kept for pronouncement on Sr.PS
Date of uploading order Sr.PS
File sent to the Bench Clerk Sr.PS
Date on which file goes to the Head Clerk
Date on which file goes to the A.R.
Date of dispatch of Order.