CIT Vs. OPERA GLOBAL PVT. LTD.

JUDGEMENT

(1.) THESE two appeals by the Revenue pertain to assessment years 2006 -07 and 2008 -09, and impugn orders dated 13th January, 2012 and 30th September, 2011, passed by the Income Tax Appellate Tribunal ('Tribunal', for short). The appeals relate to disallowance under Section 40(a)(ia) of the Income Tax Act, 1961 ('Act' for short) in respect of charges paid to clearing and forwarding agents. The amount involved in the assessment year 2006 -07 is Rs.14,57,703/ - and Rs. 77,69,537/ - and in the assessment year 2008 -09, the amount involved is Rs.48,61,509/ -.

(2.) FOR the assessment year 2006 -07, the respondent -assessee had filed return declaring a loss of Rs.2,311/ -. The Assessing Officer held that 2% tax at source should have been deducted on the aforesaid charges under Section 194C and, therefore, the entire expenditure of Rs.14,57,703/ - and Rs. 77,69,537/ - was disallowed. Thus, addition of Rs.92,27,420/ - was made.

(3.) SECTION 194C was inserted by Finance Act, 1972 to mandate deduction of tax at source, on payments made to a contractor for carrying out any work including supply of labour. Tax was to be deducted by the stipulated payer at the rate of 1 or 2 per cent.