TMI Blog2014 (10) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses which have been actually paid during the previous year without deduction of TDS - the order of the CIT(A) is upheld – Decided against revenue. Non-deduction of TDS on payments for Sign Boards - Whether the payment is towards a works-contract or not - Held that:- s decided in assessee’s own case for the earlier assessment year, it has been held that the CIT(A) has rightly observed that there is no evidence on record to show that these payments are not for 'contract for sale' and are for 'contract for work' - the finding of the CIT(A) is cursory and he has mainly relied on the narration on the bills but he has not gone into the real aspect of the controversy - this issue has not been correctly investigated into and examined by the AO – thus, the matter is to be remitted back to the AO for fresh adjudication – Decided in favour of revenue. Cancellation of order u/s 201(1) – Held that:- ITO (TDS), Udaipur created the demand u/s 201(1) of the Act only on the basis that the AO while passing the assessment orders for the assessment years held that the assessee was liable to deduct TDS on account of plant shifting charges, consultancy charges, hire charges etc. However, thos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9; in short) on account of non-deduction of TDS on consultancy charges. 4. Learned counsel for the assessee submitted that this issue has already been adjudicated by this Bench of the Tribunal for the A.Y. 2008-09 in I.T.A.No. 205/Jodh/2013 vide order dated 22/11/2013 wherein by following the earlier order dated 22/03/2013 for the A.Y. 2006-07 2007-08 in I.T.A.No.206 207/Jodh/2012, the issue has been decided in favour of the assessee. 5. Learned D.R. in his rival submissions although supported the order of the Assessing Officer, but could not controvert the aforesaid contention of the learned counsel for the assessee. 6. After considering the submissions of both the parties and the material on record, it is noticed that an identical issue having similar facts has been decided in favour of the assessee and against the Department in I.T.A.No. 205/Jodh/2013 for the A.Y. 2008-09 wherein vide order dated 22/11/2013 it has been held as under:- 4. After considering the submissions of both the parties and the material on record, it is noticed that an identical issue was subject matter of the departmental appeal for the A.Y. 2007-08, wherein the issue has been decided in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 18, which reads as under:- In assessee's appeal ground No. (1) is in relation to additions of two amounts, i.e. ₹ 1,98,000/- and ₹ 3,31,564/- u/s Sec. 40(a)(ia) r.w.s 194C of the Act. The assessee made entire payment before 31/03/2007 towards hiring of trucks for the shifting of plant from one place to another place. The above facts are not in dispute. In such circumstances provisions of section 194C are not applicable in view of the Special Bench's decision in the case of Merilyn Shipping Transports VS. ACIT reported in 136 ITD 23 (Visakhapatnam) wherein it has been held that provisions of section 40(a)(ia) of the Act are applicable only to amounts of expenditure which are payable as on 31st March of every year and it cannot be invoked to disallow expenses which have been actually paid during the previous year without deduction of TDS. Accordingly, Ground No.(1) of assessee's appeal is allowed. 8. In the present case also, learned CIT(A) made the addition by following the decision of the ITAT, Special Bench in the case of Merilyn Shipping Transport Vs. ACIT reported in 136 ITD 23. Therefore, the view taken by the learned CIT(A) is in consonan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase order was received from the customer, same were delivered to the party after charging necessary VAT/CST thereon, hence, it was not a work contract, but purchase of material from various parties on which provisions of section 194C were not applicable. It was further stated that on the balance amount of ₹ 1,87,700/-, (Rs. 31,10,739/- (-) ₹ 29,23,039/-) TDS was deducted on ₹ 1,49,400/- amounting to ₹ 3,217/-, but no TDS was deducted on the cost of material purchased amounting to ₹ 38,300/-. Therefore, the provisions of section 194C were not applicable. However, the Assessing Officer did not find merit in the submissions of the assessee and held that the payments made by the assessee amounting to ₹ 29,40,805/- were in the nature of contract and therefore, TDS on such payments were liable to be deducted as per the provisions of section 194C of the Act, which the assessee failed to deduct. He, therefore, disallowed the said amount u/s. 40(a)(ia) of the Act and added it to the income of the assessee. 14. Being aggrieved, the assessee carried the matter to the ld. CIT(A) and submitted as under:- That the ld. A.O. deal with the aspect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng their identification, sales tax/TIN number and are registered dealer. They issued bill which further speak that in fact they have charged sales tax as applicable, payment has been made through account payee cheque etc. So in view of the finding given by the CIT(A) in all these years appeal order particularly in A.Y. 2007-08 and Hon'ble ITAT also allowed the same for A.Y. 2006-07 where the total expenditure incurred is of ₹ 13082370/- which also include capitalization of expenditure amounting to ₹ 12866535/-. The Hon'ble ITAT sent back the file to A.O. For certain direction. He has principally agreed that if it is case of purchase, no TDS are required to be deducted. Therefore it is prayed that entire addition so made at ground No. 1, ground No. 2 and ground 3 which are subject matter of appeal, assessee is entitled for the complete relief. PRAYER Respected Sir, having regard to the material on record i.e. written submission and details failed on all the aforesaid grounds of appeal coupled with the decision of the CIT(A) Udaipur for the A.Y. 2006-07, A.Y. 2007-08, A.Y. 2008-09 and recent decision of Hon'ble ITAT for the A.Y. 2006-07, A.Y. 2007-08, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal is allowed. Now the Department is in appeal. 16. Learned D.R. strongly supported the order of the Assessing Officer and reiterated the observations made in the assessment order dated 28/12/2011. 17. In his rival submissions, learned counsel for the assessee strongly supported the order of the ld. CIT(A) and further submitted that the similar disallowance made by the Assessing Officer for the A.Y. 2008-09 amounting to ₹ 59,54,199/- was deleted by the Ld. CIT(A) in appeal No. 121/IT/UDR/2010-11 order dated 22/10/2012 and the Department has not filed any appeal against the said order. It was further stated that similar addition was deleted by the ITAT in assessee's own case for the A.Y. 2006-07. Therefore, on account of principles of consistency, the Department ought not to have filed appeal on this issue. 18. We have considered the submissions of both the parties and carefully gone through the material available on record. It is relevant to point out that in the oral as well as in written submissions, the contention of the learned counsel for the assessee that Department has not filed appeal against the order of the Ld. CIT(A) for the A.Y. 2008-09 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard to the assessee. Ground No. 4 of the revenue's appeal is therefore, allowed for statistical purposes. 19. Since the facts for the year under consideration relating to this issue are similar to the facts involved for the A.Y. 2006-07, so respectfully following the aforesaid referred to order dated 22/03/2013 in I.T.A.No. 206/Jodh/2012, this issue is set aside to the file of the Assessing Officer to be decided as directed for the A.Y. 2006-07. 20. In I.T.A.No. 528/Jodh/2013, the grounds raised by the Department are as follows:- 1. The Ld. CIT(A) has erred in law and on facts in holding that the assessee is not liable to deduct TDS on payment of Plant Shifting Charges of ₹ 1,98,000/- and ₹ 3,31,564/- without going into the nature of expenses. 2. The Ld. CIT(A) has erred in law and on facts in holding that the assessee is not liable to deduct TDS on payment of hire charges of ₹ 62,43,096/- without going into the nature of expenses. 3. The Ld. CIT(A) has erred in law and on facts in holding that the assessee is not liable to deduct TDS on payment of expenses on sign board of ₹ 15,43,097/- without going into the nature of expenses. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii Hire Charges ₹ 38,19,669/- iii. Payment of Sign Board Charges ₹ 59,54,199 Subsequent to the completion of the assessments of the above said assessment years, the Assessing Officer referred the issue of non-deduction of tax at source from the above payments to the ITO (TDS), Udaipur for taking action under the TDS provisions. Thereafter, the ITO (TDS) Udaipur issued notice to the assessee to show-cause as to why it should not be held as the assessee in default within the meaning of section 201(1) of the Act for non-deduction of TDS u/s. 194C, 194I 194J of the Act. In response to this, the assessee submitted that the assessment orders for both the years were subject matter of appeal before the Ld. CIT(A) and therefore, the issue should be kept abeyance till the order of the appeal, but the Assessing Officer did not exceed to the request of the assessee and treated the assessee as an assessee in default within the meaning of section 201(1) of the Act for both the assessment years i.e. A.Y. 2007-08 2008-09 and created a demand of ₹ 12,91,245/- by passing the order u/s. 201(1) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 3,31,564 so made by the A.O. and subsequently confirmed by CIT (Appeals). That in view of the fact of the case, so far A.Y. 2007-08 is concerned it is submitted that addition so made as mentioned herein above opening paragraph no more survive after the order of the Tribunal. So question of treating of assessee as defaulter u/s.201(1) of the Act does not arise at all and penalty imposed for this assessment year deserves to be deleted. That so A.Y. 2008-09 is concerned, recently order was passed by Hon'ble CIT (Appeals), Udaipur Range, Udaipur in appeal No.121/IT/UDR/2010-11 and CIT (Appeals) has deleted the entire addition which has been made by invoking provision of section 40(a)(ia) of the I.T Act. since the addition which is subject matter of 201(1) order has been deleted and not survive order so passed u/s.201(1) also not survive in the eye of law. So, in the light of this fact of the case, it is humbly prayed that entire penalty imposed u/s.201(1) aggregating to ₹ 12,91,245 treating assessee as defaulter for non deducting of TDS on certain payment not survive in the eye of law. 26. The learned CIT(A), after considering the submissions of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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