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TMI Blog2011 (4) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... "the Act") for Assessment Year 2007-08 vide his order dated 31.12.2009. 2. The first legal issue raised by assessee by way of additional ground is that the assessee being an individual is not liable to deduct tax u/s. 194C(1) of the Act and accordingly disallowance u/s. 40(a)(ia) of the Act is uncalled for. For this, assessee has raised following additional ground:- "I. That the Ld. A.O. and CIT(A) wrongly applied the provision of section 40(a)(ia) of the I. T. Act, 1961 to the appellant although he being an individual was not covered by the provision of section 194C prior to 01.06.2007 relevant to A.Y. 2008-09." 3. At the outset, the assessee contended that disallowance under section 40(a)(ia) of the Act which has been made on the premise that the assessee was liable to deduction of tax at source in respect of the Transport Charges paid to the Transport operators against the transport of petroleum product from the site of Bharat Petroleum to the petrol Pump. The provision of section 194C(1) of the Act, as it stood prior to its amendment w.e.f. 01.06.2007, do not apply in the case of an individual and therefore, there being no liability for deduction of tax at source by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duct TDS. Now, we have to examine this. The relevant provisions of Section 194C(1) and (2) as exist in assessment year 2006-07 and 2007-08 reads as under:- "(1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and:- (a) the Central Government or any State Government; or (b) any local authority; or (c) any corporation established by or under a Central, State or Provincial Act; or (d) any company; or (e) any co-operative society; or (f) any authority, constituted in India by or under any law, engaged either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both; or (g) any society registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India; or (h) any trust; or (i) any University established or incorporated by or under a Central, State or Provin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed to amend Sub-Section (1) in Section 194C so as to include payments made by any individual or Hindu Undivided Family whose total sales/gross receipts or turnover from the business or profession carried on by him exceed monetary limit specified under clause (a) or clause (b) or Section 44AB during the financial year or immediately preceding financial year in which such sum is credited or paid to the account of the Contractor. This amendment takes effect from 1st day of June, 2007 and is applicable for and from assessment year 2008-09. In Section 194C(1) with effect from 01.06.2007, by the Finance Act, 2007, clause as inserted, reads as under:- "(k) any individual or a Hindu Undivided Family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of Section 44AB during the financial year immediately preceding the financial year in which such sum is credited or paid to the account of the contractor, shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls or HUFs with small business turnovers or gross receipts of profession are required to deduct tax at source. An exception in such cases would be justified. Similarly the contracts awarded by an individual or a member of HUF of HUF exclusively for personal purposes merit exclusion. 54.5 Accordingly, the Finance Act, 2007, has substituted the said subsection (1) to include in its ambit such individual or a Hindu undivided whose total sales, gross receipts or turnover from the business or profession carried on exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding financial year in which sum is credited or paid to the account of the contractor. This amendment shall not apply in respect of payments made to a contractor by any individual or a member of a Hindu undivided family exclusively for their personal purposes. 54.6 Applicability - This amendment will take effect from the 1st day of June, 2007." 8. In view of the above clear provisions of Section 194(1) as existing in assessment years 2006-07 and 2007-08, i.e. relevant assessment years in the present appeals, it is clear that the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable in the case of the appellant." 8. At the outset, it is to be stated that since we have decided the issue on jurisdiction in favour of the assessee, we need not to deal on merits. Accordingly same being academic, we do not adjudicate. 9. The next issue in this appeal of the assessee is against confirmation of addition of Rs.1 lac by CIT(A) out of the total addition of Rs.3,41,582/- on account of G.P. For this, the assessee has raised the following ground nos. 4 and 5:- "4. That on the fact and circumstances of the case the Ld. CIT (A), Asansol erred in confirming the addition of Rs.1,00,000/- out of Rs.341582/- made by the A.O. on the ground of estimate of G.P. @7% as against 6.30 % disclosed by the appellant. 5. That on the fact and circumstances of the case the Ld. CIT (A), Asansol erred in not appreciating the fact that the G.P. @ 6.30% is higher than G.P. disclosed by any petrol pump dealer in the area and G.P. @ 6.30% is quite reasonable and where as the books of accounts could not be produced as the same were lost in transit and copy of FIR made before local Police station were submitted before the AO. and also before the CIT(A)." 10. The Ld. Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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