Dhirendra Nath Mondal Pvt. Ltd., ... vs Assessee

I . T. A . N o. 6 17 / KOL ./ 20 1 4 As ses sm e nt y e ar : 20 07 - 20 0 8

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IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA 'SM C' BENCH, KOLKATA

Before Shri George Mathan, Judicial M ember

I.T .A. No . 617 /KOL/ 2 0 14 Assess ment year : 2007 -2 00 8

M/s. Dhire nd ra N a th Mond al Pv t. Ltd .,............................ .Ap p ella nt 55, Na lini Se th Roa d, Kol ka ta -700 007 [PA N : AA BC D 0716 C ]

-Vs.- Income Ta x Offic er,........ .............................. ........ ...................Resp ond e nt Wa rd -3(4), Kolka ta, P-7, C howring hee Squa re, Kol ka ta -700 069

Appeara nces by : N o n e, f or the as sessee Shri K.L. Kanak, JCIT, Sr. D.R., for th e Department

Dat e of concluding t he hearin g : Feb ruary 23, 2015 Dat e of pr onouncing th e order : Feb ruary 23, 2015

Per Ge orge M athan:

This is an app eal filed by the assess ee a gain st th e order of ld. Commissioner of In come Tax (App eal s)-I, Kolkata in Appeal No. 267/CIT(A)-I/Wa rd-3(4)/2009-10 date d 07.01. 2014 for the ass ess men t year 2 007-08.

2. None, rep resent ed on behalf of the as sesse e and Sh ri K.L. Kanak, JCIT, Sr. D.R. rep re sen ted on behal f of the Revenu e.

3. In the asse ssee's appeal, th e as ses se e has raised the fo llo win g grounds:-

(1) That th e ld. CIT(A)-1 , Kolkata wa s not justified in confirmin g the disallowance of Rs.2,11,620/- u/s. 40(a)(ia ) of income Tax Act, 1961 .

I . T. A . N o. 6 17 / KOL ./ 20 1 4 As ses sm e nt y e ar : 20 07 - 20 0 8

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(2) Tha t the ld. CIT(A)-1 /Kolkata was err ed in co nfirmin g the disa llo wan ce u /s. 40(a)(ia) of In co me Ta x Act, 196 1 though TDS was not dedu ctable o n th e payment to Deepa k Transport Agency.

4. At the time of hearin g, it was sub mitted by the ld. Sr. D.R. that the issu e in th e app eal was relat ing to the disallowance m ade by the Assessing Of ficer by invok in g the provisio ns of s ection 40(a) (ia) of the Act on account o f the non-deductio n o f TDS in respe ct o f the p aym ents mad e to the t ran spo rt ers. It wa s th e sub mis sion by th e ld. Sr. D.R. that the as se sse e is a d ealer o f iron- she ets. Duri ng the year the assessee had mad e purcha ses f ro m Chat tri sh garh a nd payments had been m ade to M/ s. Deep ak Tran spo rt A gen cy at Bhanpuri, Raipur, Chattri shg arh toward s transpo rtat ion of th e pu rcha ses. It was the su bmi ssion that TD S had no t been deducted and consequen tly the Asse ss ing Of ficer has rightly invo ked the pro vision s of s ection 40( a)(i a) of t he Act. H e vehe mently supp ort ed the ord er of the As ses sin g Offi ce r and ld . CIT(Appe als).

5. I have con sidered the submi ssion s as al so the ass ess men t ord er and the orde r of th e ld. CIT(Appeals ). A pe rus al of the o rde r of ld. CIT(App eals) more sp ecifi cally the grounds rais ed before the ld. CIT(App eals) sh ows that the assessee h as sp ecifically men tioned that the transpo rter is not a cont racto r appointed by the assessee but a cont ractor app ointed by the supp lier comp any for ca rrying goods at the own ers (suppliers) risk and in su ran ce t erms to the destin atio n at Kolkata. The supplier is a co n si gnor wh o is sendi ng his goods through h is lorry co ntracto r to the ass es see-comp any, the consign ee. The assessee- co mpany is no way connect ed to this whole operation and the a ssess ee ca me to the pictu re when th e go ods were delivered to hi m and th ereafte r he became th e o wner of the goods. Onc e this submi ssion of the assessee is co nsidered, then it beco mes quite evident that the p ayme nt o f the transpo rt co st beco mes part of the cost o f p urch ases of th e assessee. This is in v iew of the d eci sion of the Hon'ble Supreme Court in the case of I . T. A . N o. 6 17 / KOL ./ 20 1 4 As ses sm e nt y e ar : 20 07 - 20 0 8

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India M eters Li mit ed -v s.- St ate of Ta mi lnadu in Civ il App eal No. 1032-33 of 2003 d ated 07.09.2010 wherein the Hon'ble Supreme Co u rt h as h eld that "if th e o wnership in th e goods gets transf er red a t the pr emises of the buyer and th e supplier has th e obligation of tran sporting the goo ds to the premis es of th e buyer, th en not withstan ding the fact tha t the fr eight charg es wer e r ecovered separately fro m the buyer, th e t ra nsp ortation charg es shall fo rm pa rt of turnover of th e sup plier, i.e. cos t o f purch ases for the buyer". Once this i s so, then admitt edly the provisio ns of TDS in resp ect of the sa me wo uld not apply. In thes e ci rcum st ances, resp ectfully app ly ing the pri nciples laid down by the Hon'ble Sup rem e Court in the case of Indi a Met ers limit ed, the di sall owan ce as mad e by the A ss essin g Officer and as confi rmed by th e ld. CIT(Ap peals) by invoking the provision s of s ection 40 (a)(i a) of th e Act st an ds d eleted.

6. In the result, the appeal filed by the ass essee stand s allowed.

Orde r p ronounced in th e open Co urt on 23 r d Febru a ry, 2 015.

Sd /-

George Mathan (Judicial M embe r) Kolkata, th e 23 r d day of F ebruary, 2015

Co pies to : (1) M/s. Dhire nd ra N a th Mond al Pv t. Ltd ., 55, Na lini Se th Roa d, Kol ka ta -700 007

(2) Income Ta x Office r, Wa rd -3(4), Kolka ta, P-7, C howring hee Squa re, Kol ka ta -700 069

(3) Comm iss ioner of Income-tax (Appeal s) (4) Com mis sioner of Incom e Tax (5) The Depar tmental R epr es entative (6) Guard Fil e By order

Assistant Registrar Income Tax App ellate Tribunal Kolkata ben ch es, Kolkata Laha/Sr. P.S.