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TMI Blog2013 (11) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... in pursuance of contract and in instant case, it was solely between appellant and its principal. - There is nothing on record to suggest that the above order of the Mumbai Tribunal is brought to the notice of the learned CIT(A) - matter remanded back for reconsideration. - ITA No.375/Bang/2012 - - - Dated:- 3-5-2013 - N Barathvaja Sankar and George George K, JJ. For the Appellant : Shri Krishnaswamy, CA For the Respondent : Shri Etwa Munda, CIT-III ORDER:- PER : George George K This appeal at the instance of the assessee is directed against the CIT(A) s order dated 21/2/2012. The relevant assessment year is 2009-2010. 2. The background of the case is as follows:- This appeal was originally disposed off by the Tribunal vide its order dated 3/8/2012. Subsequently, the assessee filed a Miscellaneous Petition No.76/Bang/2012 for amending the Tribunal s order dated 3/8/12. The M.P. was disposed off by the Tribunal by order dated 18/1/2013. The Tribunal recalled its earlier order for the limited purpose of considering the assessee s grounds, namely, ground no.2(1) and 3, since the same were not adjudicated in the earlier order of the Tribunal dated 3/8/12. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Lorry hire charges 94C Jan. 09 3,21,29,110 3,63,059 3,63,059 00009 06/05/2009 Lorry Hire charges 94C Feb. 09 3,97,67,080 4,49,368 4,49,368 00010- 06/05/2009 Total 7,18,96,190 3.1.1 The Assessing Officer show-caused the assessee as to why the above sum of Rs.7,18,96,190/- being the expenditure on which the TDS were remitted late in contravention to what is provided in Chapter XVIII-B of the Act should not be disallowed by invoking the provisions of section 40(a)(ia) of the Act. The assessee s authorized representative vide his letter dated 5/9/2011, submitted that the TDS has been remitted before the due date specified in section 139(1) of the Act and therefore, it would be sufficient compliance of the provisions. For the above proposition, the assessee relied on the following orders of the Tribunal :- Vinay Kumar Shetty v DCIT in ITA No.879/Bang/08-09 assessment year 2005-06; Sri Bapusahed Navasahed Dhumal v ACIT (2010) 40 SOT 361 (Mum) Bansal Parivahan (P) Ltd. v ITO (2011) 9 ITR (Trib) 565 (Mum). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t applicable to payments amounting to less than Rs.20,000/- or Rs.50,000/- aggregate payment in a year as provided under the I T Act and hence, such items are not hit by section 40(a)(ia) of the Act, although tax has been deducted. The fourth argument that was taken was that section 40(a)(ia) is applicable to only to items referred to in sections 30 to 38 of the Act and not to business income computation because of the non-obstante clause. Lastly it was argued that the application of provisions of section 40(a)(ia) of the Act is restricted to amounts payable if they are outstanding on the last day of the accounting year. 3.4 The CIT(A), however, rejected the above contentions raised by the assessee and dismissed the appeal. The relevant finding of the CIT(A) on rejection of the above ground reads as follows:- 3.6 The main argument taken by the appellant is that the amendment to section 40(a)(ia) has retrospective effect from 1/4/2005 as the said amendment is clarificatory in nature. There is a clear date from which the said provision is applicable i.e. assessment year 2010- 11 onwards. It does not apply to the assessment year in question. This view has also been upheld by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch of the Tribunal in the case of ACIT v M K Gurumurthy (supra) has followed the judgement of the Hon ble High Court of Calcutta in preference to the Special Bench order of the Tribunal in the case of Bharathi Shipyard Ltd. reported in 11 ITR (Trib) 599 (S.B.) (Mumbai), wherein it was held that the amendment brought out by Finance Act 2010 is not clarificatory/ retrospective. The relevant finding of the Bangalore Bench of the Tribunal in the case of ACIT v M K Gurumurthy (Supra) reads as follows :- 13. As regards to the decision of Special Bench Mumbai in the case of Bharti Shipyard Ltd. v. DCIT (132 ITD 53) relied by the ld. DR is concerned, although that decision may support the revenue s case, particularly the observations in para 25 of the decision which read as under:- The amendment to s. 40(a)(ia) by the Finance Act, 2010 has been specifically made retrospectively applicable from the asst. yr. 2010-11. It has nowhere been expressly set out that the amendment is curative or merely declaratory of the previous law. The intention of the legislature as gathered from the Notes on Clauses and the Memorandum Explaining the Provisions of the Finance Bill does not parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ble High Court in the judicial hierarchy is above the Tribunal. We, therefore considering the totality of the facts as narrated hereinabove, do not see any valid ground to interfere with the findings of the ld. CIT(Appeals). 17. In the result, the appeal of the department is dismissed . 3.6.2 In the light of the judgement of Hon ble High Court of Calcutta in the case of CIT v Virgin Creations (supra) and the order of Bangalore Bench of the Tribunal in the case of ACIT v M K Gurumurthy (supra), we hold that the amendment to section 40(a)(ia) by Finance Act, 2010 is retrospective. Therefore, in the instant case, since the assessee has paid to the Government Account the tax deducted at source before the due date of filing of return of income under section 139(1), the disallowance of expenditure by invoking the provisions of section 40(a)(ia) is not called for. It is ordered accordingly. 4. Ground No.3 : The learned CIT(A) and Addl. CIT ought to have appreciated that the appellant is a goods transport service provider and had entered into written contract with large companies and such contracts were not amenable to sub-contracting; he merely took trucks on hire and the truck ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase considered by the Mumbai Tribunal in the case of Bhail Bulk Carriers v ITO (supra) are identical. The Mumbai Tribunal had held that the truck owners were not sub-contractors and did not do any work as contemplated under section 194C of the I T Act, 1961. 4.3 The learned DR relied on the findings of the Income Tax authorities. 4.4 We have heard the rival submissions and perused the materials on record. The Hon ble Mumbai Tribunal in the case of Bhail Bulk Carriers v ITO (supra), while considering the facts of that case, held that the assessee merely took trucks on hire and the truck owners were not subcontractors and did not do any work as contemplated under section 194C of the Income-tax Act, 1961; hence, the section did not apply to the payments made to the lorry/truck owners. The relevant finding of the Mumbai Tribunal reads as follows:- The appellant was solely responsible for executing the contract on behalf of its principal. For fulfilling its transportation commitment, the assessee besides using its own tankers was also hiring the tankers from outside parties as and when required. In such a case of hiring from outside, the responsibility of successful comple ..... X X X X Extracts X X X X X X X X Extracts X X X X
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