ACIT 13(1), MUMBAI vs. BHIWANDIWALA & SONS, MUMBAI

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ITA 7753/MUM/2010Status: DisposedITAT Mumbai01 February 2016AY 2005-063 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the Karnataka High Court had decided an identical issue against the assessee. To examine the parity of facts, the matter was restored to the CIT(A) for fresh adjudication.

What were the facts?

The assessee, a transport commission agent, hired tankers and made payments without deducting TDS. The AO disallowed the expenditure under Section 40(a)(ia) as it was considered sub-contracting attracting Section 194C.

What were the issues?

Whether payments made for hiring tankers constitute sub-contracting attracting TDS provisions, and if the disallowance under Section 40(a)(ia) is justified.

Which sections of the Income-tax Act were involved?

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

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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI

Hearing: 1.2.2016Pronounced: 1.2.2016

स्थधमी रेखध सं./जीआइआय सं./PAN. :AAAFB0736E अऩीरधथी ओय से / Appellant by Shri Sachchidanand Dube प्रत्मथी की ओय से/Respondent by None सुनवधई की तधयीख / Date of Hearing : 1.2.2016 घोषणध की तधयीख /Date of Pronouncement: 1.2.2016 आदेश / O R D E R Per B R Baskaran, AM: Both the appeals filed by the revenue are directed against the two separate orders passed by the ld.CIT(A)-24, Mumbai and they relate to the assessment years 2005-06 and 2007-08.

2.

None appeared on behalf of the assessee even though the hearing was adjourned on the last occasion at the instance of the assessee. Hence, we proceed to dispose of the appeals ex-parte, without the presence of the assessee.

3.

We heard the ld. DR and perused the record. The facts in brief are that the assessee is a Transport Commission Agent and also owned certain

2 7 75 3 / M/ 2 01 a nd 77 5 4 / M/ 2 01 0 number of tankers. The assessee has also hired tankers from the market and has made payments to them without deducting tax at source. Since the assessee did not deduct tax at source on the payments made to the hired tanker lorries, the AO disallowed the expenditure relating to the same u/s 40(a)(ia) of the Act, by taking the view that the payment was made by the assessee for sub-contracting the work and hence the provisions of section 194C of the Act is attracted. The ld. DR submitted that the ld. CIT(A) has followed the decision rendered by the Vishakhapatnam Bench of the Tribunal in the case of Mythri Transport Corporation V/s ACIT (2009) 124 TTJ (Visakha) 970 in deleting the disallowance made u/s 40(a)(ia) of the Act. However, the Karnataka High Court has decided an identical issue against the assessee in the case of Smt.J Rama V/s CIT (2010) 194 Taxman 37 (Kar). When a specific query was raised to the ld.DR as to whether there is a parity of facts between the case decided by the Hon’ble Karnataka High Court and that of the assessee, the ld. DR submitted that the matter may be restored to the file of the ld.CIT(A) for examining the issue afresh.

4.

According to the ld. DR, on the identical set of facts, the Hon’ble Karnataka High Court has decide an identical issue against the assessee in the case of Smt.J Rama(supra). Since the facts prevailing in the instant case and that existed in the case decided by Hon’ble Karnataka High Court needs to be brought on record, we are of the view that this issue requires fresh examination at the end of the ld.CIT(A). Accordingly, we set aside the orders passed by the ld.CIT(A) for both the years under consideration and restore the same to his file for adjudicating the same afresh.

3 7 75 3 / M/ 2 01 a nd 77 5 4 / M/ 2 01 0

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