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Income Tax Appellate Tribunal, ‘A’ BENCH, KOLKATA
Before: Shri P.M.Jagtap, & Shri S.S.Viswanethra Ravi
This appeal filed by the assessee is directed against the order of Commissioner of Income Tax (Appeals), Kolkata dated 12-03-2012 for the assessment year 2008-09 on the following effective ground:-
That on facts and circumstances of the case the ld. CIT(Appeals) was not justified to confirm the addition partly u/s. 40(a)(ia) where the payment exceeds Rs.20,000/- for a single trip of hire charges when the transactions do not tantamount to any contract u/s. 194C of the I.T Act 1961. The reasons adduced by him against such addition are vageue and arbitrary.
The assessee, Shri Lal Behari Shaw is an individual and in the transport business. The assessee filed his return of income on 22.09.2008 for the assessment year 2008-09 vide acknowledgement no. 5355000031 declaring total income of Rs.10,73,844/. During the scrutiny proceeding, the AO noticed that the assessee had claimed a sum of Rs.89,37,395/- and booked it under the head ‘Transportation Charge’. The AO called upon the assessee to furnish details in support of the same. In response the A/R of the assessee furnished the books of accounts and ledger of transportation charges paid. On going through the records the AO noticed that the assessee had made payments in the `nature of hire charges for goods carriage vehicles to the following parties:
NAME TANKER NO. PAYMENT Chanchal Das WB 39 7883/ WB 15 4583 Rs 1392983 Usha Shaw WB 192475 Rs 197117 Shanti Das & Mohan Das WB 19 4569 Rs 639481 Pratap Shaw WB 191473/ WB 19 25111WB 19 1139 Rs. 557635 Sunder Shaw WB 73 4154 Rs. 86286 Raju Shaw WB 19 4098 Rs.157,502 Uttam Ghosh WB 194774, WB 03B 2046, Rs.1013103 WB 41 C 7902, WB 41 C 6384 Madhu Das WB 03A 1118/WB 235561 Rs 972236 Abhijit Ganguly WB 73 A 68881 WB 19 0298 Rs.514759 Swapan Das WB 73A 5352 Rs.527265 S.K.Panja WB 154772 Rs.584612 Putul Das WB 03A 1667 Rs.428908 Rina Bose WB 19 2547/WB 196387 Rs.368333 Manoranjan Adhikary WB 73 A 7870 Rs.617206
S.P Dixit WB 19A0399 Rs.571031 A.K.Das WB 190881/6386 Rs.562041 Robin Sardar WB 190840 Rs.576860 Surendra Mishra WB 73A 5602 Rs.570385 F.K Dave WB 19 1140 Rs. 56210 Bisu Das WB 25 A 3485 Rs.160513 Jayanti WB 23 5937 Rs.728974 Unspecified Parties Rs.62,6478 Total Rs.1,19,09,918/- 3. The AO called upon the Assessee to show cause why the expenditure apparent from his books of accounts which was in excess of the expenditure as per his Profit & Loss A/c should not be treated as unexplained expenditure and added back to his income. According to the AO, in response the assessee did not bring any fact into light and merely stated that his expenditure was Rs. 89,37,395/-. According to the AO, the assessee was unable to provide any explanation for the amounts in excess of what was reflected in his Profit & Loss account and which were booked as payments to various parties on various dates of the financial year as per his books of accounts. As the assessee was unable to reconcile or substantiate the unexplained difference between his books of accounts and his Profit & Loss account, an amount of Rs.29,72,523 was treated as unexplained expenditure u/s 69C of the Income Tax Act and included in the income of the assessee.
4, Further, the AO called upon the assessee to show cause as to why despite the fact that the assessee had made payments in the nature of hire charges for goods carriage vehicles, which were within the purview of Sec. 194C of the Income Tax Act, 1961, there was no evidence for deduction of TDS for the same. The assessee could not give any satisfactory reply. Since the said payments in aggregate were above Rs 50,000/- the whole amount should have been subjected to TDS u/s. 194C. Hence, an amount of Rs 89,37,395/- was added back to the income of the assessee due to violation of Sec. 40(a)(ia).
The CIT-A partly confirmed the addition made u/s. 40(a)(ia) of the Act by the AO on account of truck hire charges. The assessee and revenue both filed their respective appeals separately against the same order of the CIT- A, Kolkata dated 12-03-2012 for the A.Y 2008-09. The assessee questioned the order of CIT-A in respect of confirming the addition in part where the payment was made exceeding Rs.20,000/- for a single trip towards transportation charges. Whereas the Revenue has also filed appeal questioning the order of the CIT-A in directing the AO to restrict the disallowance, where the payment of Rs.20,000/- was made for a single trip towards transportation charges.
The ld. DR submits that the appeal filed by the revenue was allowed for statistical purpose on 15-05-2015 in for the A.Y 2008-09 and that of the assessee was allowed on 05-08-2016 in ITA No. 981/Kol/2012 for the A.Y 2008-09 and argued that both the orders of the Tribunal dated 15-05-2015 & 05-08-2016 suffered from difference of opinion in pronouncing the result where the assessee and the issue involved therein is same. Copy of Tribunal orders are placed on record. Thus, he urged to remand the appeal of the assessee in ITA No. 981/Kol/2012 for the AY 2008-09 to AO.
7. In reply, the ld.AR submits that the view taken by the Tribunal in favour of assessee holds good by relying on various case laws and in view of decision of the Hon’ble Supreme Court in the case of CIT Vs. Vegetable Products reported in ( 1973) 88 ITR 192(SC) and argued that when two views are available in different orders dated 15/05/2015 & 05/08/2016 of the Tribunal in the both the appeals by the assessee and revenue in their Sri Sundar Shaw 4 respective appeals, in such circumstances, the rule of judicial precedence demands the view favourable to assessee must be adopted. In support of this contention, he also relied on the order of Co-ordinate bench of ITAT Chennai in the case of Sri Narayana Moorthy Travels Vs. ITO and referred to para 5 of said order. Ld. AR further argued that this Tribunal has taken a view in favour of assessee in accordance with law laid down by the Hon’ble Supreme Court in the case of supra.
8. Heard rival submissions and perused the material available. We find that both the revenue and assessee have filed their respective appeals in this Tribunal against common order of the CIT-A dated 12-03-2012 separately, wherein the issue was identical and similar. We find that at the time of hearing of the said appeal neither of the parties brought to our notice that appeal filed by the revenue was allowed for statistical purpose on 15-05-2015. We also find that difference of opinion in both the appeals i.e assessee’s appeal was allowed vide order dated 05-08-2016 and that of the revenue was allowed for statistical purpose vide order dated 15-05- 2015 and the said two decisions had been created a confusion in giving effect to orders of Tribunal.
We find as pointed out by the ld.DR that the Tribunal in in the case of ACIT, Cir-53, Kolkata Vs. Lal Behari Shaw vide its order dated May 15, 2015 allowed the appeal of revenue for statistical purpose by observing as under:-
A plain reading of this Section makes it clear that "any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person” is required to deduct tax at source under section from the amounts so" paid or payable. There is no doubt that the assessee in this case has made the payments as transportation charges in the nature of hiring charges for goods carried vehicles. The main contention of the assessee is, however, that the payments have not been made in pursuance of a contract between the assessee and the transporters. Now the question arises before us, whether there is contractual relationship between the assessee and the persons to whom the assessee had made the payments in the nature of hiring charges for goods carried vehicles. In our opinion a contract need not be in writing; even an oral contract: is good enough to invoke the provisions of Section 194 C. As Hon'ble Karnataka High Court has observed in the case of Smt. J. Rama Vs. CIT (236 CTR 105), "Law does not stipulate the existence of a written contract as a condition precedent for ( invoking the provisions of Section 194 C with respect to) payment of TDS". The transporters have received the ITA No. 981/Kol/12
Sri Sundar Shaw 5 payments from the assessee towards the transportation charges, therefore, the presumption normally be that one would proceed on the basis that there was a contract for hiring of goods carried vehicles. Therefore, if the assessee has made the payment for hiring the goods carried vehicles, the provisions of section 194C are clearly applicable. In our opinion, the ld, CIT(Appeals) was not correct in law that the assessee will be liable to deduct the TDS if the amount of a single contract exceeds Rs.20,000/-. The contract has to be looked into party-wise not on the basis of the individual GR. In our opinion, all the payments made to a truck owner throughout the year are to be aggregated to ascertain the applicability of the TDS provision a~ all the payments pertain to a contract. Contract need not be in writing. It may infer from the conduct of the parties. It may be oral also. Our aforesaid view IS duly supported by the decision of ITAT. 'A' Bench, Kolkata in the case of DCIT -vs.- Kamal Kr. Mukherjee & Co in ITA No. 199/Kol/2010. We also noted that under section 194C, sub- section (5) proviso thereto, the aggregate amount of all the payments or credited should exceed only Rs.50,000/-, then the assessee shall be liable to deduct income-tax at source. No doubt, we, therefore, set aside the order of the ld.CIT(Appeals) and direct the Assessing Officer to restrict the disallowance by working out the that the assessee shall be liable to deduct TDS under section 194C in respect of the each party if the total payment made or credited to each of the parties exceeds Rs.50,000/- during the impugned year.
In the result, the appeal filed by the Revenue is allowed for statistical purposes. "
In view of above discussion, we remand the issue to the AO to decide same.
In the result, the appeal of the assessee is allowed for statistical purpose
THIS ORDER IS PRONOUNCED IN OPEN COURT ON 05 /05 /20176