SRI SUNIL KUMAR BANIK,KOLKATA vs. INCOME TAX OFFICER-WARD-50(1), KOLKATA, KOLKATA

This appeal by the assessee is against the order dated 04.09.2013 passed by Commissioner of Income Tax (Appeals)-XXXII, Kolkata for assessment year 2009- 10. 2. Only issue in this appeal is to be decided is as whether the CIT(A) is justify in confirming the disallowance as made by the Assessing Officer on account of non- deduction of Tax Deducted at Source (TDS for short) u/s 40(a)(ia) of the Income Tax Act, 1961 (herein referred to ‘the Act’) in the facts and circumstances of the case.

Briefly stated facts are that assessee is an individual engaged in the business of trading of wheat and rice under the name & style M/s Sunil Kumar Banik. The A.Y. 2009-10 Sh S.K. Banik Vs. ITO Wd-50(1) Kol. Page 2 assessee filed his return declaring total income of ₹4,96,521/- on 28.09.2009 and scrutiny notice u/s. 143(2)/ 142(1) of the Act were issued. In response thereto, assessee was represented through his advocate and filed tax audit report in Form 3CB, profit and loss account, balance sheet, bank account details of sundry debtors and creditors and bank loan statement.

During the course of assessment proceedings AO found that assessee had incurred expenditure of ₹13,55,509/- on account of payment towards freight charges and in explanation for non-deduction of TDS assessee submitted that he did not obtain TAN. AO was of the view that assessee should have deducted TDS u/s 194C of the Act and for non-deduction of TDS by invoking the Sec.40(a)(ia) of the Act added ₹12,20,705/- to the income of assessee.

In challenge before CIT(A) assessee submitted that there is no such provision for deduction of TDS from the payment which were paid towards freight charges and deduction of TDS does not arise that the assessee produced PAN as required u/s. 194C(6) of the Act. CIT(A) sought remand report from AO relevant to submission as made by assessee and considering the remand report rejected both submissions as discussed above and confirmed the addition made by AO u/s 40(a)(ia) of the Act.

Before us Ld. AR submits that there was no written contract between assessee and the truck owners and whenever the occasion arise assessee used to engage trucks in open market and as such the amount were paid to the truck owners as referred to page No.1 of the paper book and argued that all the payments were below ₹50,000/- and the addition made u/s. 40(a)(ia) does not attract at all. Ld. AR also relied on the decision of Hon'ble High Court of Calcutta in the case of CIT Vs. M/s Stumm India in of 2009 and argued the Revenue did not bring on record anything to show existence of contract between assessee and the transport owners. Ld. AR also place on reliance on the decision of this Tribunal in the case of ACIT Vs. M/s Bells Advertising Syndicates in ITA No.395/Kol/2013 dated 10.02.2016 and argued that Tribunal in both case deleted the addition made thereon by relying on the decision of Hon'ble ITA No.2567/Kol/2013 A.Y. 2009-10 Sh S.K. Banik Vs. ITO Wd-50(1) Kol. Page 3 jurisdictional High Court of Calcutta in the case of M/s Stumm India (supra) and prayed to allow the appeal and also argued alternatively to remit the issue to the file of AO.