M/s. Capital Transport Corporation -vs.- Income Tax Officer/Ward-56(3)
, – “ ”, ,
IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : KOLKATA
[ . . , -, ! " , - ]
[Before Hon’ble Shri S.V. Mehrotra, AM & Hon’ble Shri Mahavir Singh, JM
"# / I.T.A No. 1753/Kol/2009
!$% &/'Assessment Year : 2006-07
M/s. Capital Transport Corporation -vs.- Income Tax Officer/Ward-56(3)
Of India, Kolkata [PAN : AABFC 9559 K] Kolkata.
[ )* /Appellant] [,-)*/Respondent]
)*/ For the Appellant : Shri S. M. Surana
,-)*/ For the Respondent : Shri S. K. Roy
- ./ORDER
. . , -
Per S. V. Mehrotra, A. M.
The assessee has preferred this appeal for assessment year 2006-07 against order of Ld.
CIT(A)-XXXVI, Kolkata dated 21.08.2009. The grounds of appeal raised by the assessee read as
under :-
1. For that on the facts and in the circumstances of the case the Commissioner of
Income Tax (Appeals) has erred in disallowing lorry hire payment of
Rs.24,74,376/- U/s.40(a)(ia) of the Income Tax Act,l961 for non deduction of
TDS as the owners of lorries furnished Form No. 151 to the appellant firm before
the date of payment of lorry hire.
2. For that on the facts and in the circumstances of the case the Commissioner of
Income Tax (Appeals) has erred in disallowing lorry hire payment for non
deduction of payment, however the appellant firm has filed copy of Form No.
151 before the Assessing Officer before the completion of assessment and a copy
of the same was filed before the Commissioner of Income Tax (Appeals) on
ground that Form No.1 5J was not filed along with Form No.151 before the
Commissioner of Income Tax (Appeals), because of the lack of knowledge of the
Act.
3. For that on the facts and in the circumstances of the case the Commissioner of
Income Tax (Appeals) has erred in disallowing interest Rs.36,000/- payable to
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ITA No. 1753/Kol/2009
2
Mrs.Koshalya Devi Hada for non deduction of TDS , as Mrs.Koshalya Devi
Hada has submitted Form No.15H as her income was below taxable limit, but the
Form no. 15J was not filed before the Commissioner of Income Tax (Appeals),
because of the lack of knowledge of the Act. However Form no 15H was
submitted by Mrs.Koshalya Devi Hada before the Assessing Officer before the
completion of assessment.
4. That the appellant craves leave to supplement, cancel or otherwise amend any
of the grounds herein above before or at the time of the hearing of the appeal.
2. Brief facts apropos ground Nos.1 & 2 are that the assessee, in the relevant assessment year,
was engaged in the transportation business. The assessee was not owning any goods vehicle. After
obtaining a contract in transport of goods, assessee used to engage a sub-contractor to carry out the
job and paid him hire charges for his vehicle. Assessing Officer noticed that assessee had shown
lorry hire charges amounting to Rs.3,44,11,095/-. Assessing Officer noticed that out of this
payment assessee was under obligation to make deduction under section 194C in respect of
payments aggregating to Rs.1,54,16,846/-. Before the Assessing Officer, assessee had explained as
under :-
“……….At hearing stage the A/R stated that particulars of payments are
maintained as per the truck numbers. But, the annexure to Form 26Q may
contain only the names of persons as defined in the I.T. Act, 1961. The
assessee could not provide any reconciliation to establish whether any
TDS were made and deposited for the above discussed amount. The A/R,
in his submission dated 30.12.2008 mentioned that, ….. ‘assessee firm is
not in possession of the copy of form 26 and it will not be possible for the
assessee firm to procure the same from the efilling intermediary in such a
short notice.”
Before the Assessing Officer, it was, inter alia, submitted that assessee had received declaration in
form 15I from the truck owners. However, due to ignorance of the fact that 15J was required to be
submitted, assessee did not submit form 15J alongwith form 15I received from the truck owners.
Assessing Officer, however, did not accept the assessee’s contention and made addition of
Rs.1,54,16,846/-. Ld. CIT(A) after considering the assessee’s submission observed that it was
clear from Form 26Q that assessee had deducted TDS for lorry hire payments of Rs.1,29,42,417/-
while the TDS was not deducted on payment of lorry hire charges of Rs.24,74,376/-. After
considering the assessee’s submission that form 15I was received from the respective turn over in
respect of Rs.24,74,376/- did not accept the assessee’s plea and confirmed the disallowance to the
extent of Rs.24,74,376/-.
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ITA No. 1753/Kol/2009
3
3. Being aggrieved assessee is in appeal before us.
4. We have considered the submissions of both the parties and have perused the records of
the case. There is no dispute that assessee had received form 15I from the truck owners to whom
the payments were made without making TDS. However, the only default of assessee was nonfurnishing
of form 15J alongwith form 15I. Ld. Counsel appearing on behalf of the assessee has
relied on the following decisions for the proposition that even if form 15I/15J received are not
submitted to Ld. CIT(A), 194C will not apply :-
(i) ITO vs. Shri Chandan Gopal Shroff in ITA No. 844/Kol/2008 of Kolkata
Bench vide order dated 31.07.2009.
(ii) ITO vs. M/s. Ashabhai Babarbhai Patel & Co. in ITA
No.2195/AHD2010 of Ahmedabad Bench vide order dated 10.12.2010.
(iii) Shri Vipin P. Mehta vs. ITO in ITA No. 3317/Mum/2010 of Mumbai
Bench vide order dated 20.05.2011.
(iv) ITO vs. Rajesh Kr. Garg in ITA No.532/Kol/2011 of Kolkata Bench vide
order dated 05.08.2011.
5. We have considered the submissions of both the parties and have perused the records of
the case. ITAT, Mumbai Bench in the case of Shri Vipin P. Mehta vs. ITO in ITA
No.3317/Mum/2010 vide order dated 20.05.2011, has, inter alia, held as under :-
“………….All these provisions indicate that the failure on the part of the
assessee, who is the payer of the interest, to file the declarations given to him by
the payees of the interest, within the time limit specified in sub-section (2) to
section 197A is distinct and separate and merely because there is a failure on the
part of the assessee to submit the declarations to the income-tax department
within the time limit, it cannot be said that the assessee did not have declarations
with him at the time when he paid the interest to the payees. That would be a
separate matter and separate proof and evidence is required to show that even
when the assessee paid the interest, he did not have the declarations from payees
with him and therefore he ought to have deducted the tax from the payment. No
such evidence or proof has been brought by the department.
For the aforesaid reasons, we accept the assessee’s claim that since he
had the declarations of the payees in the prescribed form before him at the time
when the interest was paid, he was not liable to deduct tax therefrom under
section 194A. If he was not liable to deduct tax, section 40(a)(ia) is not attracted.
There is no other ground taken by the income tax authorities to disallow the
interest. We therefore accept the assessee’s appeal and delete the disallowance of
interest of Rs.7,87,291/-.”
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ITA No. 1753/Kol/2009
4
6. In the present case before the Assessing Officer assessee had submitted that form 15-I
received by him could not be deposited with the Ld. CIT. Assessee’s submissions have been
reproduced in Para-7(ii) at page-4 of Assessing Officer’s order. After considering the assessee’s
submission Assessing Officer, inter alia, observed that assessee did not submit form 15J by
30.06.2006 because he had not received form 15-I. He was of the view that 15-I was received
subsequently when the assessee was confronted with the issue of disallowance under section
40(a)(ia). The availability of form15-I, however, at the time of assessment proceedings is not
doubted. Therefore, in view of decision in the case of Shri Vipin P. Mehta (supra), Assessing
Officer is directed to delete the disallowance of Rs.24.74.376/-. In the result, ground Nos. 1 & 2 of
the appeal are allowed.
7. Brief facts apropos ground No.3 are that the Assessing Officer noticed that assessee in its
balance sheet and schedule had shown unsecured loan of Rs.17,81,763/-. He noted that in some of
the cases interest was credited without TDS. He has observed that at hearing stage the assessee’s
representative produced five Form 15G stated to be obtained from Smt. Koshalya Devi Heda for
non-deduction of TDS from interest credits/payments. Assessing Officer has, inter alia, observed
as under :-
“…………Part II of 15G form contains an item number 2 which reads
“Date on which declaration was furnished by the declarant” which is left
blank. Apart from this, the payer has to deliver to the Commissioner one
copy of the 15G declaration on or before 7th day of month next following
the month in which the declaration is furnished to him. The Assessee, in
the show cause letter dated 29.12.2008, was asked to produce/submit
evidence for such delivery. The assessee could not produce any such proof
for submission of 15G to the office of the CIT and also, he did not
mention anything in his reply dated 30.12.2008.”
Assessing Officer had disallowed interest in respect of 14 persons to whom interest had been so
credited. Ld. CIT(A) directed the Assessing Officer to restrict the disallowance to Rs.36,000/- in
respect of interest payment to Smt. Koshalya Devi Heda as against Rs.1,08,002/- made by the
Assessing Officer, inter alia, observing as under :-
“……….However no TDS was deducted in respect of payment of Rs.36,000/- to
Ms. Koshalya Devi Heda nor Form 15-J alongwith form 15-I was furnished before
the Commissioner of Income Tax concerned. Though the A/R claimed that form
15-I was obtained by the Appellant no evidences in this regard was filed before me.
The decision relied on by the A/R were not on the issue at hand. The decision in
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ITA No. 1753/Kol/2009
5
the case of Sudarshan Auto general finance referred to above was concerned with
levy of penalty. The other decisions are also not on the provisions of section
40(a)(ia). Therefore, they do not support the appellant’s case.
Accordingly, the disallowance of interest payment of Rs.36,000/- is confirmed. The
A.O. is directed to restrict the disallowance on interest payment to Rs.36,000/-.”
8. Having heard both the parties, we find that this issue is also covered by the decision in the
case of Shri Vipin P. Mehta (supra) because here also Ld. Authorised Representative of the
assessee had produced form 15H in course of assessment proceedings. This ground of the assessee
is allowed.
9. In the result, appeal of the assessee is allowed.
- . / 0 /$ 1 2 3
Order pronounced in the Court on 11. 08. 2011.
S d / - Sd/-
[ ! " , -] [ . . , -]
[Mahavir Singh] [S.V. Mehrotra]
Judicial Member Accountant Member
( 3 ) Dated : 11th August, 2011.
- . 5 ,! ! 6 7 6& /Copy of the order forwarded to:
1. )* /Appellant : M/s. Capital Transport Corpn. of India, 25, Gangadhar Babu
Lane, Kolkata-700 012.
2 ,-)*/ Respondent : Income Tax Officer/Ward-56(3), 3, Govt. Place (East),
Kolkata.
3. ! .$ / CIT,
4. ! .$ ( )/CIT(A), Kolkata.
5. !1 ,! $ /DR, Kolkata Benches, Kolkata
[ - 6 ,! /True Copy]
- . $/ / By order,
"? /Asstt Registrar
[kkc @ A !$B? !C /Sr.PS]
IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : KOLKATA
[ . . , -, ! " , - ]
[Before Hon’ble Shri S.V. Mehrotra, AM & Hon’ble Shri Mahavir Singh, JM
"# / I.T.A No. 1753/Kol/2009
!$% &/'Assessment Year : 2006-07
M/s. Capital Transport Corporation -vs.- Income Tax Officer/Ward-56(3)
Of India, Kolkata [PAN : AABFC 9559 K] Kolkata.
[ )* /Appellant] [,-)*/Respondent]
)*/ For the Appellant : Shri S. M. Surana
,-)*/ For the Respondent : Shri S. K. Roy
- ./ORDER
. . , -
Per S. V. Mehrotra, A. M.
The assessee has preferred this appeal for assessment year 2006-07 against order of Ld.
CIT(A)-XXXVI, Kolkata dated 21.08.2009. The grounds of appeal raised by the assessee read as
under :-
1. For that on the facts and in the circumstances of the case the Commissioner of
Income Tax (Appeals) has erred in disallowing lorry hire payment of
Rs.24,74,376/- U/s.40(a)(ia) of the Income Tax Act,l961 for non deduction of
TDS as the owners of lorries furnished Form No. 151 to the appellant firm before
the date of payment of lorry hire.
2. For that on the facts and in the circumstances of the case the Commissioner of
Income Tax (Appeals) has erred in disallowing lorry hire payment for non
deduction of payment, however the appellant firm has filed copy of Form No.
151 before the Assessing Officer before the completion of assessment and a copy
of the same was filed before the Commissioner of Income Tax (Appeals) on
ground that Form No.1 5J was not filed along with Form No.151 before the
Commissioner of Income Tax (Appeals), because of the lack of knowledge of the
Act.
3. For that on the facts and in the circumstances of the case the Commissioner of
Income Tax (Appeals) has erred in disallowing interest Rs.36,000/- payable to
www.lexpertsonline.com
ITA No. 1753/Kol/2009
2
Mrs.Koshalya Devi Hada for non deduction of TDS , as Mrs.Koshalya Devi
Hada has submitted Form No.15H as her income was below taxable limit, but the
Form no. 15J was not filed before the Commissioner of Income Tax (Appeals),
because of the lack of knowledge of the Act. However Form no 15H was
submitted by Mrs.Koshalya Devi Hada before the Assessing Officer before the
completion of assessment.
4. That the appellant craves leave to supplement, cancel or otherwise amend any
of the grounds herein above before or at the time of the hearing of the appeal.
2. Brief facts apropos ground Nos.1 & 2 are that the assessee, in the relevant assessment year,
was engaged in the transportation business. The assessee was not owning any goods vehicle. After
obtaining a contract in transport of goods, assessee used to engage a sub-contractor to carry out the
job and paid him hire charges for his vehicle. Assessing Officer noticed that assessee had shown
lorry hire charges amounting to Rs.3,44,11,095/-. Assessing Officer noticed that out of this
payment assessee was under obligation to make deduction under section 194C in respect of
payments aggregating to Rs.1,54,16,846/-. Before the Assessing Officer, assessee had explained as
under :-
“……….At hearing stage the A/R stated that particulars of payments are
maintained as per the truck numbers. But, the annexure to Form 26Q may
contain only the names of persons as defined in the I.T. Act, 1961. The
assessee could not provide any reconciliation to establish whether any
TDS were made and deposited for the above discussed amount. The A/R,
in his submission dated 30.12.2008 mentioned that, ….. ‘assessee firm is
not in possession of the copy of form 26 and it will not be possible for the
assessee firm to procure the same from the efilling intermediary in such a
short notice.”
Before the Assessing Officer, it was, inter alia, submitted that assessee had received declaration in
form 15I from the truck owners. However, due to ignorance of the fact that 15J was required to be
submitted, assessee did not submit form 15J alongwith form 15I received from the truck owners.
Assessing Officer, however, did not accept the assessee’s contention and made addition of
Rs.1,54,16,846/-. Ld. CIT(A) after considering the assessee’s submission observed that it was
clear from Form 26Q that assessee had deducted TDS for lorry hire payments of Rs.1,29,42,417/-
while the TDS was not deducted on payment of lorry hire charges of Rs.24,74,376/-. After
considering the assessee’s submission that form 15I was received from the respective turn over in
respect of Rs.24,74,376/- did not accept the assessee’s plea and confirmed the disallowance to the
extent of Rs.24,74,376/-.
www.lexpertsonline.com
ITA No. 1753/Kol/2009
3
3. Being aggrieved assessee is in appeal before us.
4. We have considered the submissions of both the parties and have perused the records of
the case. There is no dispute that assessee had received form 15I from the truck owners to whom
the payments were made without making TDS. However, the only default of assessee was nonfurnishing
of form 15J alongwith form 15I. Ld. Counsel appearing on behalf of the assessee has
relied on the following decisions for the proposition that even if form 15I/15J received are not
submitted to Ld. CIT(A), 194C will not apply :-
(i) ITO vs. Shri Chandan Gopal Shroff in ITA No. 844/Kol/2008 of Kolkata
Bench vide order dated 31.07.2009.
(ii) ITO vs. M/s. Ashabhai Babarbhai Patel & Co. in ITA
No.2195/AHD2010 of Ahmedabad Bench vide order dated 10.12.2010.
(iii) Shri Vipin P. Mehta vs. ITO in ITA No. 3317/Mum/2010 of Mumbai
Bench vide order dated 20.05.2011.
(iv) ITO vs. Rajesh Kr. Garg in ITA No.532/Kol/2011 of Kolkata Bench vide
order dated 05.08.2011.
5. We have considered the submissions of both the parties and have perused the records of
the case. ITAT, Mumbai Bench in the case of Shri Vipin P. Mehta vs. ITO in ITA
No.3317/Mum/2010 vide order dated 20.05.2011, has, inter alia, held as under :-
“………….All these provisions indicate that the failure on the part of the
assessee, who is the payer of the interest, to file the declarations given to him by
the payees of the interest, within the time limit specified in sub-section (2) to
section 197A is distinct and separate and merely because there is a failure on the
part of the assessee to submit the declarations to the income-tax department
within the time limit, it cannot be said that the assessee did not have declarations
with him at the time when he paid the interest to the payees. That would be a
separate matter and separate proof and evidence is required to show that even
when the assessee paid the interest, he did not have the declarations from payees
with him and therefore he ought to have deducted the tax from the payment. No
such evidence or proof has been brought by the department.
For the aforesaid reasons, we accept the assessee’s claim that since he
had the declarations of the payees in the prescribed form before him at the time
when the interest was paid, he was not liable to deduct tax therefrom under
section 194A. If he was not liable to deduct tax, section 40(a)(ia) is not attracted.
There is no other ground taken by the income tax authorities to disallow the
interest. We therefore accept the assessee’s appeal and delete the disallowance of
interest of Rs.7,87,291/-.”
www.lexpertsonline.com
ITA No. 1753/Kol/2009
4
6. In the present case before the Assessing Officer assessee had submitted that form 15-I
received by him could not be deposited with the Ld. CIT. Assessee’s submissions have been
reproduced in Para-7(ii) at page-4 of Assessing Officer’s order. After considering the assessee’s
submission Assessing Officer, inter alia, observed that assessee did not submit form 15J by
30.06.2006 because he had not received form 15-I. He was of the view that 15-I was received
subsequently when the assessee was confronted with the issue of disallowance under section
40(a)(ia). The availability of form15-I, however, at the time of assessment proceedings is not
doubted. Therefore, in view of decision in the case of Shri Vipin P. Mehta (supra), Assessing
Officer is directed to delete the disallowance of Rs.24.74.376/-. In the result, ground Nos. 1 & 2 of
the appeal are allowed.
7. Brief facts apropos ground No.3 are that the Assessing Officer noticed that assessee in its
balance sheet and schedule had shown unsecured loan of Rs.17,81,763/-. He noted that in some of
the cases interest was credited without TDS. He has observed that at hearing stage the assessee’s
representative produced five Form 15G stated to be obtained from Smt. Koshalya Devi Heda for
non-deduction of TDS from interest credits/payments. Assessing Officer has, inter alia, observed
as under :-
“…………Part II of 15G form contains an item number 2 which reads
“Date on which declaration was furnished by the declarant” which is left
blank. Apart from this, the payer has to deliver to the Commissioner one
copy of the 15G declaration on or before 7th day of month next following
the month in which the declaration is furnished to him. The Assessee, in
the show cause letter dated 29.12.2008, was asked to produce/submit
evidence for such delivery. The assessee could not produce any such proof
for submission of 15G to the office of the CIT and also, he did not
mention anything in his reply dated 30.12.2008.”
Assessing Officer had disallowed interest in respect of 14 persons to whom interest had been so
credited. Ld. CIT(A) directed the Assessing Officer to restrict the disallowance to Rs.36,000/- in
respect of interest payment to Smt. Koshalya Devi Heda as against Rs.1,08,002/- made by the
Assessing Officer, inter alia, observing as under :-
“……….However no TDS was deducted in respect of payment of Rs.36,000/- to
Ms. Koshalya Devi Heda nor Form 15-J alongwith form 15-I was furnished before
the Commissioner of Income Tax concerned. Though the A/R claimed that form
15-I was obtained by the Appellant no evidences in this regard was filed before me.
The decision relied on by the A/R were not on the issue at hand. The decision in
www.lexpertsonline.com
ITA No. 1753/Kol/2009
5
the case of Sudarshan Auto general finance referred to above was concerned with
levy of penalty. The other decisions are also not on the provisions of section
40(a)(ia). Therefore, they do not support the appellant’s case.
Accordingly, the disallowance of interest payment of Rs.36,000/- is confirmed. The
A.O. is directed to restrict the disallowance on interest payment to Rs.36,000/-.”
8. Having heard both the parties, we find that this issue is also covered by the decision in the
case of Shri Vipin P. Mehta (supra) because here also Ld. Authorised Representative of the
assessee had produced form 15H in course of assessment proceedings. This ground of the assessee
is allowed.
9. In the result, appeal of the assessee is allowed.
- . / 0 /$ 1 2 3
Order pronounced in the Court on 11. 08. 2011.
S d / - Sd/-
[ ! " , -] [ . . , -]
[Mahavir Singh] [S.V. Mehrotra]
Judicial Member Accountant Member
( 3 ) Dated : 11th August, 2011.
- . 5 ,! ! 6 7 6& /Copy of the order forwarded to:
1. )* /Appellant : M/s. Capital Transport Corpn. of India, 25, Gangadhar Babu
Lane, Kolkata-700 012.
2 ,-)*/ Respondent : Income Tax Officer/Ward-56(3), 3, Govt. Place (East),
Kolkata.
3. ! .$ / CIT,
4. ! .$ ( )/CIT(A), Kolkata.
5. !1 ,! $ /DR, Kolkata Benches, Kolkata
[ - 6 ,! /True Copy]
- . $/ / By order,
"? /Asstt Registrar
[kkc @ A !$B? !C /Sr.PS]
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