P S APARTMENTS PVT. LTD.,KOLKATA vs. I.T.O.,WARD-12(3), KOLKATA

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ITA 655/KOL/2019Status: DisposedITAT Kolkata18 September 2019AY 2013-142 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the lower authorities wrongly treated outright sales invoices as contractual payments. Therefore, the disallowance made on account of non-deduction of TDS was incorrect.

What were the facts?

The assessee claimed business promotion expenses. The lower authorities disallowed these expenses for non-deduction of TDS, treating them as contractual payments. The payments were for outright purchases of 'Sarees' and 'Classic Bonsai'.

What were the issues?

Whether payments for outright purchases of goods can be treated as contractual payments requiring TDS deduction under Section 194C, leading to disallowance under Section 40(a)(ia).

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 194C,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A-SMC” BENCH : KOLKATA

Before: Hon’ble Shri S.S. Godara, JM ]

ORDER Shri S.S. Godara, JM:

1.

This assessee’s appeal for assessment year 2013-14 arises against the CIT(A), 4, Kolkata’s order dated 22-02-2019 passed in case no. 688/CIT(A)-4/2016-17 involving proceedings u/s 143(3) of the Income-tax Act, 1961 ( in short ‘Act’).

Heard both the parties. Case file perused.

2.

The assessee’s sole substantive ground/grievance challenges correctness of both the lower authorities’ action disallowing the alleged business promotion expenses of Rs. 1,94,233/- for non deduction of TDS u/s. 194C giving rise to application of section 40(a)(ia) of the Act.

3.

It transpires during the course of hearing both the lower authorities held that assessee had made payments of Rs. 1,33,230/- and Rs.61,003/- to M/s. Suman Creations & M/s. Arham Dealcom Pvt. Ltd. Case file suggests these two instances are of outright sale/purchases relating to “ Sarees” and “Classic Bonsai” as per corresponding invoice dt. 26-07-2012 & 16-11-2012; respectively. I conclude in this fact that both the lower authorities have wrongly treated outright sales invoices as contractual payments. I therefore direct the Assessing Officer to delete impugned disallowance.

4.

This Assessee’s appeal is allowed. Order pronounced in the Court on 18 -09-2019 Sd/- [ S.S.Godara ] Judicial Member Dated : 18 -09-2019 **PRADIP, Sr. PS Copy of the order forwarded to:

1. 1. Appellant/Assessee: M/s. P S Apartments Pvt. Ltd 122C, Chakberia Road, North Chakraberia, Kolkata.

2. Respondent/Department: The I.T.O. Ward 12(3), Kolkata. P-7 Chowringhee Sq., Kolkata 3..C.I.T(A).- 4. C.I.T.- Kolkata.

5. CIT(DR), Kolkata Benches, Kolkata.

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