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TMI Blog2017 (3) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... in the course of making purchases. Therefore, the issue is raised in this appeal of not charging tax deducted at source u/s 194A of the Act on the interest amount of ₹ 9,00,832/- is squarely covered by the judgment of Hon. High Court in the case of CIT vs. Krishak Bharati Co-op Ltd. (supra). - Decided in favour of assessee Disallowance u/s 40A(3) - cash payment towards purchase of stamp papers - Held that:- under rule 6DD(b) refers to such circumstances where the payment is made to the Government and under the rules framed by it, such payment is required to be made in legal tender. It is an admitted fact that stamp papers are issued by State Government only and they are sold through various agents appointed by the Government. We are of the confirm view that such payments for purchase of Govt. Stamp Papers is covered under the exception provided under rule 6DD(b) of the IT Rules and, therefore, no disallowance is called for u/s 40A(3) of the Act and, we therefore, allow this ground of assessee. - ITA No. 3128/Ahd/2013 - - - Dated:- 16-3-2017 - Shri S. S. Godara, JM And Shri Manish Borad, AM Appellant by : Shri Tushar Hemani, AR Respondent by : Shri Prasoon Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 9,00,832/- and disallowance u/s 40A(3) of the Act towards cash payment ₹ 1,36,960/- assessed the income at ₹ 1,14,41,410/-. 5. Aggrieved, assessee went in appeal before ld. Commissioner of Income Tax(A) and partly succeeded. 6. Aggrieved assessee is now in appeal before the Tribunal raising following grounds of appeal :- 1. The learned CIT(A) has erred both in law and on the facts of the case in confirming the disallowance of ₹ 9,00,832/- made u/s 40(a)(ia) of the Act for non-compliance of provisions of S.I94A. On the basis of facts and circumstances of the case, provisions of S.I94A are not at all applicable and hence, no disallowance is called for u/s 40(a)(ia). 2. The learned C1T(A) has erred both in law and on the facts of the case in confirming the addition to the extent of ₹ 30,000/- made by AO purely /on the basis of estimation after holding that the appellant has incurred V / such transportation expenses for Wet Mix Paver and Soil Compactor out of its undisclosed income. 3. The learned CIT(A) has erred both in law and on the facts of the case in confirming the disallowance of ₹ 1,36,960/- made u/s 40A(3) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that assessee has not taken any loan or advance from IOCL and the payment of ₹ 9,00,832/- was purely late payment charges paid during the year at various point of time for not making the payment towards purchase of bitumen on the agreed dates. 9.1 We further observe that ld. Assessing Officer contended that assessee has not deducted tax at source u/s 194A of the Act and accordingly disallowed this expenditure of ₹ 9,00,832/-. However, Hon. Jurisdictional High Court in the case of CIT vs. Krishak Bharati Co-op. Ltd. 349 ITR 68 (Guj) relied on by the assessee has held that the transportation charges for transporting the gas by the seller to its buyer was inter alia in furtherance of contract of sale of goods and such transportation charges cannot be covered u/s 194C of the Act. It was further held that transportation charges do not depend on the consumption of quantity of gas but a fixed monthly charges to be borne by the assessee as part of the agreement between the parties and, therefore, the application of section 194C does not arise. Analyzing the facts in the light of above judgment of Hon. Jurisdictional High Court we find substance in the case relied on by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at academic at this stage. We, therefore, refrain from making any observation on merits and remit the matter to the file of Assessing Officer with our directions as above. We observe that the issue raised in this appeal is also covered by the decision of Co-ordinate Bench in the case of Janak Bhupatrai Parekh (HUF) (supra) so much so that payment has been made to a Govt. owned Public Sector Undertaking namely IOCL. However, as we have already deleted the impugned disallowance of ₹ 9,00,832/- by following the judgment of Hon. Jurisdictional High Court in the case of CIT vs. Krishat Bharat Co-op. Ltd. (supra) we find it academic to adjudicate this issue by following the Tribunal s decision in the case of Janak Bhupatrai Parekh (HUF) vs. ITO (supra) as discussed above. In the result, this ground of assessee is allowed. 10. Ground no.2- 2. The learned C1T(A) has erred both in law and on the facts of the case in confirming the addition to the extent of ₹ 30,000/- made by AO purely /on the basis of estimation after holding that the appellant has incurred V / such transportation expenses for Wet Mix Paver and Soil Compactor out of its undisclosed income. 11. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p paper is covered in the exception mentioned in Rule 6 DD of the IT Rules 1963 relating to cases and circumstances in which payment or aggregate payment of exceeding ₹ 20,000/- may be made to a person in a day otherwise by an account payee cheque drawn on bank or account payee draft. We further observe that under rule 6DD(b) refers to such circumstances where the payment is made to the Government and under the rules framed by it, such payment is required to be made in legal tender. It is an admitted fact that stamp papers are issued by State Government only and they are sold through various agents appointed by the Government. During the year under appeal assessee had made cash payment to such agents of the State Government who have the valid stamp papers and assessee paid in total ₹ 1,36,960/- on various dates and paid in cash. 16. In the given facts and circumstances we are of the confirm view that such payments for purchase of Govt. Stamp Papers is covered under the exception provided under rule 6DD(b) of the IT Rules and, therefore, no disallowance is called for u/s 40A(3) of the Act and, we therefore, allow this ground of assessee. 17. Other grounds are of ge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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