ACIT 25(3), MUMBAI vs. BHAVARLAL C. SUTHAR, MUMBAI

During hearing of this appeal, Shri Prakash L. Pathade, ld. DR, advanced arguments which is identical to the ground raised. On the other hand, nobody was present for the assessee in spite of issuance of registered notices on various dates. Even on 20/09/2012, the hearing was adjourned at the request of the assessee. It seems that the assessee is not interested to respond, therefore, we have no option but to proceed ex-parte, qua the assessee, and tend to dispose of this appeal on the basis of material available on record.

2.1. We have considered the submissions of the ld. DR and perused the material available on record. The facts, in brief, are that the assessee, an individual, engaged in carpentry contract work, declared income of Rs.10,22,327/- in his return filed on 03/10/2007, accepting the same u/s 143(1) of the Act. Case of the assessee, subsequently, was selected for scrutiny, and the assessment was completed u/s 143(3) of the Act determining the total income at Rs.1,09,02,510/-. The ld. Assessing Officer noted that the assessee did not deduct tax at source in respect of payments made to labour contractors to the extent of Rs.97,92,917/- as required u/s 194C(2) of the Act. Before the ld. Assessing Bhavarlal C.Suthar Officer as well as before the ld. Commissioner of Income Tax (Appeals), the explanation of the assessee is that the assessee duly deducted the tax at source and deposited in the government account in subsequent year. It was also asserted that the respective parties paid their taxes, therefore, there was no liability to deduct tax by the assessee. Reliance was placed upon the decision in Hindustan Coca Cola Beverages (P.) Ltd. 293 ITR 226 (SC) by contending that section 40(a)(ia) of the Act is not applicable. Without going into much deliberation, it is noted that the requirement of the Act is that the taxes has to be paid and deduction of tax is one of the mode of payment. Undisputedly, tax has already been recovered/paid either by the assessee or by the recipient, therefore, there is no loss of the Revenue. The assessee debited labour charges of Rs.97,92,917/- to the profit & loss account out of the which the amount of Rs.64,16,212/- was debited before the end of February 2007 and Rs.33,76,705/- was debited in the month of March 2007. The assessee paid the amount of Rs.64,16,212/- before the end of the previous year and the assessee deducted TDS in respect of all the amount towards labour charges and remitted into the government account on 07/08/2007 i.e. before due date of filing of return. In view of this factual matrix, we find no infirmity in the conclusion of the ld. Commissioner of Income Tax (Appeals), consequently, there was no question of disallowing Rs.33,76,705/- ignoring the retrospective amendment made by the Finance Act, 2008.