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M/s. Meetali Road carriers Versus ITO, Ward-9 (4) , Ahmedabad and Vica-Versa

2016 (5) TMI 760 - ITAT AHMEDABAD

Disallowance u/s 40(a)(ia) - failure to deduct TDS u/s 194C - Held that:- The details ought to have been submitted before the AO, but in the interest of justice, the ld.CIT(A) has also called for the details viz. copies of GRs. not submitted by the assessee with regard to the 11 parties. The assessee did not file their income tax details in order to determine whether these parties have paid taxes on the amounts paid by the assessee to them without deduction of taxes. Thus, a perusal of the CIT(A .....

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2016 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER For The Assessee : None For The Revenue : Shri Narendra Singh, Sr.DR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: The assessee and the Revenue are in cross-appeal against the order of the ld.CIT(A) dated 2-7-2012 passed for the Asstt.Year 2008-09. 2. In response to the notice of hearing no one has come present on behalf of the assessee. Therefore, service of notice was directed to be effected through the department. T .....

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rough the record carefully and proceeded to decide the appeal ex parte qua the assessee. 4. Solitary issue involved in both these appeals relates to quantification of disallowance, if any, required to be disallowed under section 40(a)(ia) of the Income Tax Act, on account of non-deduction of TDS. 5. Brief facts of the case are that the assessee-firm is engaged in the business of transportation. It has filed its return of income on 9.9.2008 declaring total income at ₹ 50,680/-. The case of .....

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nt order. The ld.AO has further observed that the assessee-firm failed to deduct TDS under section 194C of the Income Tax Act, therefore, it not entitled for the expenses of ₹ 71,51,715/-. After hearing the assessee, the ld.AO has disallowed the claim of the assessee. 6. Dissatisfied with the order of the ld.AO, the assessee carried the matter in appeal before the CIT(A). The assessee had raised various arguments including that it is not liable to deduct TDS because each contract is to be .....

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e disallowance under section 40(a)(ia) cannot be made. The ld.CIT(A) has segregated both these amounts. Accordingly, the disallowance to the extent of ₹ 51,65,500/- was deleted by the CIT(A). This order is being impugned by the Revenue in its appeal, whereas, the amounts which were outstanding as on 31st March, and on which TDS has not been deducted by the assessee, the ld.CIT(A) has upheld the disallowance. Thus, addition was confirmed at ₹ 19,06,615/-. The assessee is impugning thi .....

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er consideration? 2. Whether decision of Special Bench of the Tribunal in the case of M/s. Merilyn Shipping & Transports vs. ACIT (supra) lays down correct law?" The Hon ble High Court has answered both these questions in favour of the Revenue. The observation of the Hon ble High Court contained in page no.39 and 40 of the judgment reads as under: 39. We answer the questions as under:- Question (1) in the negative i.e. in favour of the Revenue and against the assessees. Question (2) als .....

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ppeals are disposed of accordingly. Thus, the Hon ble High Court has overruled the order of the Special Bench in the case of M/s. Merilyn Shipping & Transports vs. ACIT (supra). 8. In light of Hon ble High Court s decision, we have to examine the facts of the present case. We find that the CIT(A) has rejected all arguments of the assessee on merit. It is worth to note the findings recorded by the CIT(A). It reads as under: 5. I have perused the facts and submission of the appellant. I have a .....

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t of freight debited as asked by my predecessor and later on by me during appeal proceedings. Whether the appellant was having any contract with parties/persons through whom he got completed his contract with "Drive India Ent. Solution Ltd." can only be examined on the basis of terms & conditions mentioned on GRs which are duly agreed and signed by party/person of truck owner utilized by appellant. It is only verification of this all important and meaningful document, it can be det .....

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e the verification of facts. As per the verification of A.O. at para 3 of the Asstt. order there is no doubt about the payment in excess of ₹ 50,000 in aggregate to total 11 parties amounting to ₹ 71,37,065 is mentioned. Further appellant failed to offer any reply before A.O, in response to show cause, therefore verification of GRs become all crucial considering the grounds of appeal and contention of the appellant but appellant failed to show any of such GRs. The appellant in the st .....

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e any of the authority. In point no. 12 of SOF it is contended that there is no revenue loss since all the transporters to whom payments made had already filed their IT. returns and paid taxes on it and hence, relying on Hon'ble supreme court case of Hindustan coca cola, the appellant is no longer an 'assessee in default' and therefore provisions of section 194 C r.w.s. 201(1 A) shall not applied. This contention is also a self serving contention because appellant has not submitted a .....

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7; 50,000 in aggregate as discussed in earlier para are therefore upheld. But, the appellant in written submission contended that the applicability of disallowance u/s 40 (a)(ia)of the Act is applied only to the amounts remained payable as on 31st March of previous year in view of Hon'ble ITAT special bench order in the case of M/s. Marilyn Shipping & transport v/s ACIT (supra). It is in this regard appellant filed a detail showing outstanding balance being payable to these eleven partie .....

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5,000 39,950 Surya Goods Carriers 91,800 50,000 41,800 Tejas Roadways 81,500 10,000 71,500 7,072,115 5,165,500 1,906,615 I am inclined to accept this contention of the appellant following the ratio of Hon'ble special bench of ITAT. It is in this regards, the total disallowances which can be upheld being sustainable u/s 40(a)(ia) of the Act is ₹ 19,06,615 only. The disallowance and addition to this extent is therefore confirmed. For the balance amount i.e. ₹ 51,65,500 (70,72,115-1 .....

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