Ita/28/2015 Of Smt.prasanna Radha Krishnan Proprietrix v. The Income Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC &THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU MONDAY, THE 18TH DAY OF JULY 2016/27TH ASHADHA, 1938 I.T.A.No. 28 of 2015AGAINST THE ORDER IN I.T.A.153/2014 of I.T.A.TRIBUNAL, COCHIN BENCH, DATED 8.8.14 APPELLANT/APPELLANT/ASSESSEE: ------------------------------------------------- SMT.PRASANNA RADHA KRISHNAN, PROPRIETRIX M/S. R.K.GAS AGENCY, CALICUT. BY ADVS.SRI.P.PARAMESWARAN NAIR SRI.SOORAJ T.ELENJICKAL SMT.V.A.HARITHA SMT.SANDHYA R.NAIR SMT.P.M.MAZNA MANSOOR RESPONDENT/RESPONDENT/REVENUE: ------------------------------------------------------ THE INCOME TAX OFFICER WARD 1(2), CALICUT. R BY SRI.P.K.R.MENON, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 18-07-2016, THECOURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX PETITIONER'S ANNEXURES: ANNEXURE I: TRUE COPY OF THE ORDER OF ASSESSMENT DATED30.12.2011 FOR THE YEAR 2009-2010 ISSUED TO THE APPELLANT. ANNEXURE 2: TRUE COPY OF THE ORDER OF THE COMMISSIONER OFINCOME TAX DATED 21.11.2012. ANNEXURE 3: TRUE COPY OF THE ORDER OF THE INCOME TAXAPPELLATE TRIBUNAL, COCHIN BENCH DATED 7.6.2013. ANNEXURE 4: TRUE COPY OF THE REMAND REPORT OF THERESPONDENT TO THE COMMISSIONER OF INCOME TAX (APPEALS),CALICUT. ANNEXURE 5: TRUE COPY OF THE ORDER OF THE COMMISSIONER OFINCOME TAX (APPEALS) DATED 9.1.2014. ANNEXURE 6: TRUE COPY OF THE ORDER DATED 8.8.2014 OF THEINCOME TAX APPELLATE TRIBUNAL. // TRUE COPY // P.A. TO JUDGE ANTONY DOMINIC & DAMA SESHADRI NAIDU, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -I.T.A.No.28 of 2015 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Dated this the 18[th] day of July, 2016 Antony Dominic, J. JUDGMENT This appeal is filed by the assessee challenging the orderpassed by the Income Tax Appellate Tribunal, Cochin Bench inI.T.A.No.153/14. During the assessment year 2009-2010, on theground of non compliance of Section 194C in respect of thepayments made by the assessee to one Suresh, who was found tobe a sub-contractor, the amounts paid were disallowed underSection 40(a)(ia) of the Income Tax Act. The assessee filed appealand the Commissioner (Appeals) considered the contention of theassessee that Sri.Suresh was only an employee and not a sub-contractor for transportation of the Liquefied Petroleum Gasmanufactured and marketed by Hindustan Petroleum CorporationLimited whose distributor is the assessee. 2. In his order, the Commissioner came to the factual findingthat Sri.Suresh is a Sub Contractor of the assessee and that from outof the payments made to such a sub-contractor, deduction underSection 194C should have been made. The Commissioner,accordingly, found that since the assessee has not made deductionunder Section 194C, disallowance under Section 40(a)(ia) of theAct is legal. This order was again challenged by the assessee beforethe Income Tax Appellate Tribunal by filing I.T.A.No. 153/14 and bythe impugned order, the Tribunal dismissed the appeal. It is thisorder, which is under challenge before us. 3. We heard the counsel for the appellant and the learnedSenior Standing Counsel appearing for the Revenue. 4. The question of law that is framed for our consideration iswhether the Tribunal ought to have held that the appellant is notliable to deduct tax under Section 194C and whether the Tribunalshould have deleted the addition of income on account of 3. We heard the counsel for the appellant and the learnedSenior Standing Counsel appearing for the Revenue. 4. The question of law that is framed for our consideration iswhether the Tribunal ought to have held that the appellant is notliable to deduct tax under Section 194C and whether the Tribunalshould have deleted the addition of income on account of disallowance under Section 40(a)(ia) of the Income Tax Act.Although the contention that Sri.Suresh being only an employee ofthe assessee and that, therefore, Section 194C is not attracted, isreiterated before us, we find that, on facts, the Tribunal came to afinding that Sri.Suresh is a sub-contractor of the assessee. Thisfactual finding of the Tribunal is based on its findings that lumpsum payments were made by the assessee to Suresh and thatSuresh was entirely responsible for transportation without evenaccounting to the assessee the expenses incurred by him fordischarge of the transportation work. Tribunal further found that ifSuresh was her employee as contended by the assessee, Sureshwould have furnished to the assessee the truck numbers, namesand addresses of the truck owners, drivers and the payments madeby him to each of the trucks engaged by him. Tribunal found thatnone of these details were furnished by the assessee at any stage ofthe proceedings either before the Assessing Officer or the 1[st] Appellate Authority or the Tribunal. Such a finding of fact arrivedat by the Tribunal that Sri.Suresh was a sub-contractor, is notperverse to be interfered in an appeal under Section 260A of theIncome Tax Act. Once we accept the status of Sri.Suresh as a sub-contractor, the liability under Section 194C is automaticallyattracted. Admittedly, the assessee has not effected deductionunder the said Section. Consequence thereof is disallowance underSection 40(a)(ia) of the Income Tax Act. 5. In such circumstances, the order passed by the Tribunaldismissing the appeal of the assessee does not merit interference.Therefore, answering the question of law framed in favour of theRevenue and against the assessee, this appeal is dismissed. SD/- ANTONY DOMINIC JUDGE SD/- DAMA SESHADRI NAIDU JUDGE