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Income Tax Appellate Tribunal, “B” BENCH: KOLKATA
Before: Shri Mahavir Singh, JM & Shri Waseem Ahmed, AM]
ORDER
Per Shri Mahavir Singh, JM:
This appeal by revenue is arising out of order of CIT(A), Durgapur vide Appeal No. 272/CIT(A)/ASL/ACIT/Cir-2/BWN/2011-12 dated 08.03.2013. Assessment was framed by ACIT, Circle-2, Burdwan u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for Assessment Year 2009-10 vide his order dated 21.12.2011.
The only issue in this appeal of revenue is against the order of CIT(A) in deleting the disallowance made by AO on account of non-deduction of TDS u/s. 194C of the Act on payment made to transporters by invoking the provisions of section 40(a)(ia) of the Act. For this, revenue has raised following ground no.1: “1. That on the facts and in the circumstances of the case Ld. CIT(A) was not correct in law as well as on fact in holding that there was not contract between the assessee and the transporter.”
3. Briefly stated facts are that the assessee is a merchant exporter. The assessee produced complete books of account including cash book, ledger etc. which were test checked and verified. The AO noted that the assessee has made payment on account of freight charges amounting to Rs.43,63,718/- but has not deducted any tax at source despite the fact that it is obligatory on the part of the assessee to deduct the same u/s. 194C of the Act. According to AO, it is a contractual payment and it attracts the provisions of section 194C of the Act. Therefore, he disallowed a sum of Rs.43,63,718/- by invoking the provisions of section 40(a)(ia) of the Act. Aggrieved, assessee preferred appeal before CIT(A), who deleted the disallowance by observing that the assessee did not engage such transporter as he was purchasing raw material which includes transportation/freight charges as per invoices. Therefore, there is no question of Amar Bandhu Saha, AY 2009-10 any contract between assessee and such transporters and, therefore, he deleted the disallowance. Aggrieved, now revenue is in appeal before us.
We have heard rival submissions and gone through facts and circumstances of the case. We find that this is a case of engagement of transporters and payment made to them. It is a fact that the assessee has claimed payment of transportation charges/freight expenses in its P&L Account from where the AO came to know that he has paid separate freight charges i.e. separate from sales. We find that the CIT(A) has not gone into the details and simply on the submissions of the assessee has deleted the addition by a non-speaking and cryptic order. When a query was put to Ld. Counsel for the assessee, he stated that the issue can be remitted back to the file of AO to examine the following two aspects: Applicability of 2nd proviso to section 40(a)(ia) of the Act as brought in by Finance (i) Act, 2012 which is held as retrospective by Hon’ble Delhi High Court in the case of Ansal Land Mark Township (P) Ltd., & 161/Kol/2015. (ii) Whether the payments made on sale of export item which includes freight or not. This issue has not been examined either by AO or by CIT(A). In view of the above two aspects, we are of the view that the matter can be remitted back to the file of the AO to decide afresh in term of the above. On this Ld. Sr. DR has not objected rather he agreed for setting aside of the issue to the file of AO. Accordingly, we remit the matter back to the file of AO on these two above aspects. The appeal of revenue is allowed for statistical purposes.