TaxTMI 
TaxTMI 
2014 (10) TMI 738
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....ayment is purely for consultancy & not reimbursement of the expenses. 1. (b) Ignoring the fact that alternatively even from assessee's contention it is the payment against contract/agreement & thus still liable for TDS. 2. Deleting the disallowance of Rs. 25,36,788/- made u/s. 40(a)(ia) of the I.T. Act, on account of non-deduction of TDS on hire charges ignoring the fact that assessee himself has debited this expenditure under the head 'hire charges' & actually also these are hire charges, thus attracting the provisions of section 194 I of the I.T. Act. 3. Deleting the disallowance of Rs. 29,40,805/- made u/s. 40(a)(ia) of the I.T. Act, on account of non-deduction of TDS on payments for Sign Boards. That the appellant craves to add, amend, alter, delete or modify any or all the above grounds of appeal before or at the time of hearing." 3. As regards to the Ground No. 1 relating to the deletion of disallowance made by the Assessing Officer u/s. 40(a)(ia) of the I.T. Act, 1961 (hereinafter referred to as 'the Act' in short) on account of non-deduction of TDS on consultancy charges. 4. Learned counsel for the assessee submitted that this issue has....
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....d in the A.Y. 2008-09, so by respectfully following the aforesaid referred to order dated 22/11/2013, we do not see any merit in this ground of the Departmental appeal. 8. As regards to the Ground No. 2 relating to the deletion of disallowance of Rs. 25,36,788/- made by the Assessing Officer u/s. 40(a)(ia) of the Act on account of non-deduction of TDS on hire charges. 9. The contention of both the parties were similar as was in respect of Ground No. 1 (supra). 10. After considering the submissions of both the parties and the material on record, it is noticed that this issue has already been adjudicated vide order dated 22/11/2013 for the A.Y. 2008-09 and the relevant findings have been given in para 7 & 8 of the said order which read as under:- 7. After considering the submissions of both the parties and material on record, it is noticed that a similar issue has already been decided in favour of the assessee by this bench of the Tribunal vide aforesaid order dated 22/03/2013, wherein relevant finding has been given in para 18, which reads as under:- "In assessee's appeal ground No. (1) is in relation to additions of two amounts, i.e. Rs. 1,98,000/- and Rs. 3,31,5....
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....s. 13. Facts relating to this issue, in brief, are that the Assessing Officer during the course of assessment proceedings, noticed that the assessee had debited a sum of Rs. 31,10,739/- under the head "payment on account of purchase of Sign Boards" and the payments had been made without deduction of tax at source. The Assessing Officer required the assessee to show-cause as to why the payment of Rs. 29,40,805/- made without deduction of tax at source, on account of Sign Boards should not be disallowed u/s. 40(a)(ia) of the Act. In response, the assessee submitted the details of purchase of the Sign Boards and stated that the material purchased amounting to Rs. 28,04,634.20 and VAT/CST thereon amounting to Rs. 1,18,405/- total aggregating to Rs. 29,23,039/- comprises of informative sign board, caution boards etc. which are universally accepted and prescribed signs and symbols by the road congress and accordingly supplier of the same kept pre-manufactured and fabricated stock of the same and whenever 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 f....
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.... Udaipur, from whom maximum purchase of sign board were made is a registered dealer having TIN number, they issued bill and charged VAT. Another VAT invoice is of Hayat Traders, Aravali Steel Fabrication, Multani Iron Suppliers etc. Respected Sir, attention is being invited that such type of addition were made in A.Y. 2006- 07, A.Y. 2007-08 and in A.Y. 2008-09 and the addition so made for all these three assessment years has been deleted by CIT(Appeals) and more particularly in appeal order of CIT(A) for A.Y. 2006-07, A.Y. 2007-08, discussed matter lengthy and on being satisfied that expenses incurred on purchase of sign board is not covered under the definition of 'works contract' as per provision of section 194-C of the I.T Act and this represent purchase of goods as per specification given by assessee. Goods were purchased from the parties having 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 a....
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....a)(ia) of the Act in these years has been deleted vide appellate order dated 12.3.2012, 14.3.2012 and 22.1.2013 in appeal No.26/IT/UDR/2008-09, 159/IT/UDR/2009-10 and 121/I/UDR/2010-11 respectively, as the facts of the case for the assessment year under appeal leading to the disallowance are exactly the same and the A.O. has not brought any new material/evidence on record which needs specific findings, I do not see any reason for deviating from the findings given in the appellate orders of earlier years mentioned supra and it is therefore held that the payments made towards sign boards is not liable for deduction of tax and therefore provisions of section 40(a)(ia) is held to be not applicable on such payments. Therefore, the disallowance of Rs. 29,40,805/- made by the A.O. U/s.40(a)(ia) deserves to be deleted and I order accordingly. This ground 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 subm....
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....e has mainly relied on the narration on the bills but he has not gone into the real aspect of the controversy. On the other hand, the A.O. has examined this issue in depth and has found that this is nothing but a 'works-contract' between the assessee and the payee. But still we are of the opinion that this issue has not been correctly investigated into and examined by the A.O. This Tribunal being the final fact-finding body, it becomes imperative to get full and final facts of this issue. For that purpose, we need to restore this issue to the file of the A.O. for fresh adjudication as per law and keeping in view the relevant Circular and the precedents which are available. Therefore, we restore this issue back to the file of the A.O. with the direction that he shall decide this issue afresh after according proper opportunity of being 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/2....
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.... Act. 24. Facts relating to this issue, in brief, are that while completing the assessment for the A.Y. 2007-08 & 2008-09, it was noticed by the Assessing Officer that the assessee company paid the following payments on account of expenditure without deduction of TDS as required by the relevant provisions of the Act:- A.Y. 2007-08 i. Payment of Plant Shifting Charge Rs. 01,98,000/- ii. Payment of Plant Shifting Charge Rs. 03,31,564/- iii Hire Charge Rs. 62,43,096/- iv Expenses on Sign Board Rs. 15,43,097/- A.Y. 2008-09 i. SQC fees for consultancy charges Rs. 26,74,200/- ii Hire Charges Rs. 38,19,669/- iii. Payment of Sign Board Charges Rs. 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. ....
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....red for plant shifting charges Rs. 1,98,000 and Rs. 3,31,564 which were confirmed by CIT (Appeals) in appeal order of A.Y. 2007-08 in appeal filed by the assessee for the A.Y. 2007-08 in ITA No.215/Jodh/2012 vide order dated 22.3.2013, the Honourable Tribunal deleted the addition of Rs. 1,98,000 and Rs. 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 o....