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2015 (10) TMI 1757 - ITAT PUNE

2015 (10) TMI 1757 - ITAT PUNE - TMI - Disallowance u/s 40(a)(ia) - whether TDS disallowance applies only to amounts ‘payable’ as on 31st March and not to amounts already paid during the year - CIT(A) deleted the disallowance - Held that:- The issue of paid or payable as envisaged under section 40(a)(ia) of the Act has been considered by Pune Bench of Tribunal in various decisions and ait has been held that in view of the decisions of various Hon’ble High courts on this issue, the provisions of .....

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penditure u/s 194C - plea raised by the assessee that it had made individual payments to the truck owners, which were less than ₹ 20,000/-, even in some cases, whether the payments were more than one, the aggregate of payments during the year did not exceed ₹ 50,000/- Held that:- s. The payments shown against such numbers cannot be allowed as a deduction, where the assessee has failed to furnish the information. Similarly, the verification exercise carried out by the Assessing Office .....

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the above said facts and circumstances, we deem it fit to restore this issue back to the file of Assessing Officer, who shall confront the assessee with the results of verification exercise carried out and as referred in the assessment order and after considering the reply of assessee, to decide the issue as per facts and in accordance with law.

We find that though the assessee had received Form No.15I from the transporters for non-deduction of tax at source, but the same were not fi .....

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i Mankad (2012 (12) TMI 413 - GUJARAT HIGH COURT). The assessee claims that it had furnished the said Form No.15I with the Assessing Officer and he has failed to consider the same. We direct the Assessing Officer to verify the assessment records and allow the claim in line with the directions of Hon’ble High Court of Gujarat. - Decided in favour of assessee by way of remand.

Addition u/s 68 - receipt of gifts - Held that:- The concept of receiving gift from wife is acceptable. However .....

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ce there is no liability in transaction of gift.

Secondly, onus is upon the assessee to establish that the person who had given the said gift has the capacity to give the gift. The perusal of return of income filed by the wife of the assessee, reflects that for assessment year 2006-07, net income of the wife of assessee was ₹ 1,20,650/-, for assessment year 2007-08, it was ₹ 1,25,040/-and for assessment year 2008-09, it was ₹ 1,43,350/-. For the instant assessment y .....

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e same, we uphold the addition of ₹ 5,00,000/- on account of two aspects of the issue as discussed above. - Decided against assessee. - ITA No.1794/PN/2012, C.O. No.58/PN/2013 - Dated:- 11-9-2015 - MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM For The Assessee : Shri C.V. Chitale For The Department : Shri Dheeraj Kumar Jain ORDER PER SUSHMA CHOWLA, JM : The captioned appeal filed by the Revenue is against the order of CIT(A)-V, Pune, dated 19.06.2012 relating to assessment year 200 .....

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e Ld.CIT(A) was justified in deleting the disallowance u/s 40(a)(ia) by holding that TDS disallowance applies only to amounts payable as on 31st March and not to amounts already paid during the year ?. 2. The appellant craves leave to add, amend or alter any of the above grounds of appeal. 4. The assessee in CO No.58/PN/2013 has raised the following grounds of objections:- a) Without considering the fact that in a number of cases payments made to the transport subcontractors do not exceed ₹ .....

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g goods carriages and therefore TDS is not attracted under subsection (6) Of section 194 C of the Act, the Assessing Officer has erred in disallowing payments made to transport contractors under provisions of section 40(a)(ia) of the Act. c) Without considering the facts of the case, business of the assessee and nature of transportation expenses incurred and provisions of section 28 of the Income Tax Act, 1961 (the Act), the Assessing Officer has erred in disallowing expenditure under section 40 .....

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ficer has erred in making disallowance under section 68 of the Act of an aggregate amount of ₹ 5,00,000/- and the Commissioner of Income tax (Appeals) - V, Pune has erred in not confirming the same. f) Without considering the facts and circumstances of the case, the assessing officer has erred in making disallowance under section 68 of the Act of an aggregate amount of ₹ 5,00,000/- and the CIT (A) - V, Pune has erred in not appreciating the assessee s case. g) The appellant craves le .....

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Dudh Utpadak and Prakriya Sangh Maryadit Vs. TRO in ITA No.1752/PN/2013, relating to assessment year 2007-08, dated 20.02.2015, wherein it has been held that the provisions of section 40(a)(ia) of the Act are to be applied irrespective of the amount being paid during the year or being payable as on 31st March. 7. The learned Authorized Representative for the assessee pointed out that in the alternate to its claim of deduction on account of expenditure, the grounds of appeal have been raised by w .....

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The Assessing Officer noted that the assessee had debited sum of ₹ 17,51,627/-under the head Other /Miscellaneous expenses which include transport charges of ₹ 15,60,000/- in respect of M/s. Deejay Enterprises. As regards the other firms i.e. M/s. Deesha Cargo Movers and M/s. Shivam Transport Co. are concerned, an amount of ₹ 1,50,77,123/- and ₹ 2,61,887/- respectively have been debited to the respective P & L account under the head Transport Charges . The assessee wa .....

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es only the names of truck drivers and the truck numbers and PAN numbers and amount claimed to have been paid. However, complete details i.e. full name, address, etc. were not furnished. The Assessing Officer in order to verify the correctness of the claim, made certain PAN verifications from the computer system, which revealed that in some cases the PAN given were invalid and in some cases, PAN given did not tally with the names given in the list. The Assessing Officer at page 2 of the assessme .....

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RTO office. The local enquiries revealed that the truck numbers given by the assessee in some cases belongs to some other parties and not to the names given by the assessee. Such parties could not confirm / quantify the transport charges received by them from the assessee. Further, the enquiries made from the RTO authorities revealed that some of the truck numbers were in fact car numbers and scooter numbers, which are enlisted under para 7 at page 3 of the assessment order. The Assessing Offic .....

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s against the vehicles, however, the enquiry revealed that owner of all these four vehicles was one person and the total amount of transportation charges paid in respect of these four vehicles owned by Shri Rajkumar R Dhotre was ₹ 2,52,180/- and even then, the assessee had not deducted tax at source. Show cause notice was issued to the assessee in this regard, which is reproduced under para 10 at page 4 of the assessment order. In reply, the assessee furnished submissions which are reprodu .....

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ssue. The plea of the assessee that it had not made payments exceeding ₹ 20,000/- on any single day and the amount involved in aggregate did not exceed ₹ 50,000/-, was rejected by the Assessing Officer since the assessee had failed to maintain party-wise / individual-wise ledger accounts of the transport charges. Hence, this claim of the assessee was rejected by the Assessing Officer. In respect of the list of truck numbers given by the assessee, the Assessing Officer noted that most .....

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ing Officer searched for addresses of the PAN holders and information was sought under section 133(6) of the Act. However, none of the parties replied till the completion of assessment except in the case of one Shri Popat Jagannath Shende, who vide reply dated 21.12.2011 said that he was owner of two trucks and had not kept any books of account during the financial year. He further stated that the assessee was unknown person and he had no business relation with him. Since the assessee had failed .....

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s Vs. ACIT (2012) 20 taxmann.com 224 (Vishakhapatnam). Since the amount of ₹ 1.69 crores was paid to the respective parties during the financial year itself, the CIT(A) held that the case was squarely covered by the Special Bench decision and no disallowance was warranted under section 40(a)(ia) of the Act. 11. The Revenue is in appeal against the said finding of CIT(A). 12. We have heard the rival contentions and perused the record. The issue of paid or payable as envisaged under section .....

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Dudh Utpadak and Prakriya Sangh Maryadit Vs. TRO (supra), wherein, vide para 10 and 11, the issue was decided against the assessee. 13. Following the same parity of reasoning, we reverse the order of CIT(A) in this regard and allow the grounds of appeal raised by the Revenue. 14. Now, coming to the alternate plea raised by the learned Authorized Representative for the assessee vide its grounds of objections. The first objection raised by the assessee was that in number of cases, the payment mad .....

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a) of the Act. The next objection raised by the assessee vide its cross objections was that the business of assessee and the nature of transportation expenses incurred and in view of the provisions of section 28 of the Act, no disallowance was warranted under section 40(a)(ia) of the Act. The plea vide ground of objection (d) is in respect of paid / payable, which we have already adjudicated while deciding the appeal of the Revenue. 15. The learned Authorized Representative for the assessee duri .....

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t though the said Form No.15I was not filed before the Commissioner, however, in view of the ratio laid down by the Hon ble High Court of Gujarat in CIT Vs. Valibhai Khanbhai Mankad (2013) 92 DTR (Guj) 267, no disallowance under section 40(a)(ia) of the Act could be made. In this regard, the learned Authorized Representative for the assessee referred to the submissions made before the Assessing Officer, copy of which is placed at page 13 of Paper Book. The learned Authorized Representative for t .....

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shing of PAN numbers of respective truck owners. 16. We have heard the rival contentions and perused the record. The issue raised in the cross objections filed by the assessee is alternate to the main issue raised in the present appeal is that whether the provisions of section 40(a)(ia) of the Act are applicable to the payments which have been made during the year or still pending to be paid at the close of year. We have already adjudicated the first issue in this regard and held in the paras he .....

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at where a person is responsible for paying any sum to any resident for carrying out any work including supply of labour for carrying out any work, in pursuance of contract between the contractor and the specified person, then, such person at the time of credit of such amount, to the account of contractor or at the time of payment whichever is earlier, deduct an amount equal to 1% in the case of advertising and in any case 2% of such sum as income tax on income comprised therein. Admittedly, in .....

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totaling ₹ 15,60,000/- and at page 58 totaling ₹ 2,00,000/-. 19. The assessee was carrying on the business of transportation under three proprietary concerns. The perusal of details reflect that the assessee has furnished the information date-wise of vehicle number, name of the party, PAN number and the amount paid to the said party. The said list was filed by the assessee before the Assessing Officer who in turn, had carried out certain investigation and had made elaborate enquiries .....

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given by the assessee in some cases belonged to some other parties and not the names given by the assessee, such parties also did not confirm or quantified the transport charges received by them from the assessee. Further enquiries were made with the RTO, which revealed that some of the truck numbers given by the assessee were in fact the car numbers and scooter numbers. The example of such incidents are reproduced under para 7 of the assessment order. Another aspect noted by the Assessing Offi .....

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urce under the provisions of section 194C(3) of the Act. Another plea raised by the assessee was that the trucks / lorries generally belonged to the drivers and they did not own more than two trucks or vehicles. In respect of various discrepancies pointed out by the Assessing Officer that the PAN numbers did not match, the assessee stated that it had complied with the said information at the request of the Assessing Officer and there might be some typographical errors, spelling mistakes or error .....

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sportation charges exceed ₹ 50,000/- or not though different PAN numbers were given by the assessee, it was explained that in view of the voluminous nature of the business it may be possible that some lorries / trucks had been allotted more than one trip. However, considering the voluminous nature of the business, it was practically impossible to keep a track of each and every truck to determine whether they had been allotted trips by the assessee previously. 20. In respect of information .....

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vehicle at time after providing transport services and there may be a possibility that the persons who bought the said vehicles from other persons might not have changed the information in the data base as available with the RTO. Another objection raised by the assessee was with regard to Form No.15I filed in respect of certain transporters, copies of which were not filed before us, but were claimed to be filed before the Assessing Officer. 21. In the totality of the above said facts and circums .....

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ot be accepted at face value, especially in a case where elaborate exercise of verification has been carried out by the Assessing Officer. The Assessing Officer has collected information and confronted the same to the assessee, which could not be explained by the assessee, except for stating that there may be errors, some mistakes in compiling the details or in writing the information, but it does not absolve the assessee of its onus. The Assessing Officer vide para 6 notes that the assessee had .....

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y 4 Bazee AHSPM4570E Kailash Meghwanshi 5 Bazee AISPT2997D Vinod Maniklal Tiwari 6 Bazee AJJPP4039Q Ghansham H Tiwari 7 Bazee AFGPB9058N Hari Krishna Bolineni 22. The Assessing Officer further noted that some of the names appeared repeatedly in the list i.e. name of S. Raju appeared 50 times, name of Bazee appeared 38 times, name of Shreenu appeared 83 times and so on. Further, the truck numbers also repeated against various names and in view thereof, the Assessing Officer was of the view that t .....

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details given by the assessee contains various truck numbers belonging to various other places (out of Maharashtra/Pune) and hence, verification was carried out in respect of some of the local parties. However, such verification revealed that the details given in the list were not correct in most of the cases; 9. Also as per the enquiries in the case of Shri Rajkumar R Dhotre (PAN AJXPD 5775B) it is revealed that, he is owner of four vehicles having Registration numbers MH14 F 7580, MH14 CP 758 .....

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pect of these 4 vehicles owned by Shri Rajkumar Dhotre is ₹ 2,52,180/- and even then the assessee has not made any TDS at all. 23. The Assessing Officer show caused the assessee and contents of show cause notice are reproduced under para 10 on page 4 of the assessment order. The perusal of show cause notice reflects that the Assessing Officer did not show cause the assessee as to the exact outcome of the investigation carried out by the Assessing Officer. The reply filed by the assessee, w .....

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the Mines and not by the assessee. It is further stated that the assessee has no say in allotment of truck/lorries as the same is done on a day to day basis by the Mines as per their list and there is no contract between the assessee and the different truck owners and hence disallowance u/s.40(a)(ia) is not warranted as held in the case of ITO vs Indian Roadlines (cited supra) since each job undertaken by a truck owner was a separate job for the same person at different rates and terms and henc .....

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ered as sub contract and section 194C was applicable. The argument of the assessee in para 1.b is more or less similar to the arguments in para 1.a and in view of the reasoning given above, i.e. in view of the decisions in the case of Shree Choudhary Transport CO. and in view of CBOT circulars 715 dated 8.8.1995, this plea of the assessee is also rejected. The arguments in para 1.c are concerned, it is pertinent to note here that the assessee was asked to give full details of all expenses claime .....

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owards transportation charges and that no TDS was liable to be deducted on the same and hence it is the responsibility of the assessee to furnish full and complete details so as to enable the Assessing Officer to complete the assessment after verifying the correctness of the claim. In the instant case, the assessee has filed only a list of more than 1200 so called truck drivers. The said list does not show full details such as the full name and addresses of the so called truck drivers, Hence it .....

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any times, PAN number given by the assessee did not tally in some case and the vehicle number given by the assessee pertains to two wheelers, cars etc in some cases as verified from local RTO. Hence the claim of the assessee cannot be accepted. The contention of the assessee in para 1.e also cannot be accepted since the assessee has not produced any proof of having submitted the so called form No15-I in the office of the CIT-V, Pune. The contention of the assessee in para 1.f, also cannot be acc .....

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the assessee has failed to establish the correctness and genuineness of the claim and hence these arguments can also be not accepted. 22. Further vide questionnaire dated 16.8.2011 the assessee was asked to produce books of accounts and other documents in support of various expenses / claim made. However, the assessee attended on 26.12.2011 and stated that books of accounts are available in his laptop on tally package. He has also given a hard copy of ledger account of Transport charges . Howev .....

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ated so called ledger account submitted by the AR do not reflect any name of the party and it only reflects datewise payments made in cash. In any case, the list given by the assessee is incomplete and on going though the list it is seen that names have been repeated and taking this aspect into consideration, the amount involved exceed ₹ 50000/-in aggregate in respect of various individual case(after taking the repeated names in to consideration) and hence the assessee was liable to make T .....

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e claim which the assessee failed to do so. 24. It is also pertinent to mention here that as per the PAN numbers given by the assessee, the address of such PAN holders were found out from the system an information u/s. 133(6) of the I.T Act, 1961 was sought for. However, none of th e parties have replied till now except in the case of Shri Popat Jagannath Shende. However, the said Jagannath Shende vide his reply dated 21.12.2011 has stated as under: I, Mr. Popat Jagannath Shende, hereby request .....

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n a particular year had paid transportation charges within ₹ 50,000/- especially in view of repetition of names and truck numbers in the list furnished by the assessee. The onus is upon the assessee to establish its claim that it had not paid the transportation charges exceeding ₹ 20,000/- on each day and also the aggregate payment to a person did not exceed ₹ 50,000/-. The assessee cannot shy away from furnishing the requisite data in view of the multiplicity of transactions. .....

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rmation against the assessee, should have confronted the assessee with the complete information in order to enable him to meet / correct defects in the verification exercise carried on. Though the proposition offered by the assessee that in case the individual payments are less than ₹ 20,000/- and aggregate payments are less than ₹ 50,000/-, no tax is to be taxed at source, is acceptable, but entire onus is upon the assessee to establish its case and especially in view of the verific .....

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ain cases and though the trucks are driven by different truck drivers, but cumulatively they belonged to one owner i.e. in the case of Shri Rajkumar R Dhotre (PAN AJXPD 5775B) and he was owner of four vehicles and the total transportation charges paid in respect of the said four vehicles was ₹ 2,52,180/-. In such cases, the provisions of section 194C of the Act were squarely attracted and hence, we find no merit in the claim of the assessee. Secondly, in respect of some of truck numbers gi .....

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case of having individually paid the amounts to different people of amounts not exceeding ₹ 50,000/- in a year. Where the assessee fails to discharge the onus cast upon him, then no benefit of provisions of the Act can be allowed to the assessee. In the entirety of the above said facts and circumstances, we deem it fit to restore this issue back to the file of Assessing Officer, who shall confront the assessee with the results of verification exercise carried out and as referred in the as .....

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ioner and in such cases, there is no requirement for deduction of tax at source. We hold that even where the assessee has failed to furnish the said Form No.15I before the Commissioner within the stipulated time, no disallowance could be made under section 40(a)(ia) of the Act, in view of the ratio laid down by the Hon ble High Court of Gujarat in CIT Vs. Valibhai Khanbhai Mankad (2013) 92 DTR (Guj) 267. The assessee claims that it had furnished the said Form No.15I with the Assessing Officer an .....

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. Briefly, in the facts of the issue, the Assessing Officer noted that the assessee had shown liability of ₹ 5,00,000/- in its accounts. When the assessee was asked to give explanation, the assessee submitted that it had received gift of ₹ 5,00,000/- from his wife on various dates. The Assessing Officer did not accept the contention of the assessee since the assessee himself had recognized the liability of ₹ 5,00,000/-. In case the assessee had received gift from his wife, ther .....

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he assessee was from his wife who in turn, had declared the same in her hands. However, by an error, the assessee had recognized the said gift as liability in its hands. Our attention was drawn to the Paper Book filed, under which the learned Authorized Representative for the assessee referred to the return of income filed by the wife of assessee and also the balance sheet as on 31.03.2009, in which she had declared the gift to her husband. 30. The learned Departmental Representative for the Rev .....

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