The Income-tax Officer,, Ujjain v. The District Forest Officer,, Dewas

ITA 502/IND/2009 | 2005-2006
Pronouncement Date: 31-05-2010 | Result: Dismissed

Appeal Details

RSA Number 50222714 RSA 2009
Bench Indore
Appeal Number ITA 502/IND/2009
Duration Of Justice 7 month(s) 1 day(s)
Appellant The Income-tax Officer,, Ujjain
Respondent The District Forest Officer,, Dewas
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 31-05-2010
Date Of Final Hearing 28-05-2010
Next Hearing Date 28-05-2010
Assessment Year 2005-2006
Appeal Filed On 29-10-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER ITA NO.502 TO 504/IND/2009 A.YS. 2005-06 TO 2007-08 INCOME TAX OFFICER TDS DEWAS APPELLANT VS DISTRICT FOREST OFFICER (PRODUCTION) DEWAS TAN BPLD02123C RESPONDENT APPELLANT BY : SHRI K.K. SINGH CIT DR RESPONDENT BY : SHRI S.S. DESHPANDE AND SHRI RAMESHWAR AS PARTNER O R D E R PER JOGINDER SINGH JM THESE APPEALS ARE BY THE REVENUE AGAINST THE ORDERS OF THE LEARNED CIT(A) DATED 25.8.2009 ON THE COMMON GROUND THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CANCE LING THE ORDER U/S 206C(6) AND (7) FOR FAILURE TO COLLECT TAX AT SOURC E FROM THE BUYERS AT THE TIME OF DEBITING THE AMOUNT PAYABLE BY THE BUYER AT THE TIME OF RECEIPT OF SUCH AMOUNT IN THE ABSENCE OF PROPER FORM NO. 27C. 2 2. DURING HEARING OF THESE APPEALS THE LD. COUNSEL FOR THE ASSESSEE STRONGLY DEFENDED THE IMPUGNED ORDER WHERE AS THE LEARNED CIT DR THOUGH DEFENDED THE ASSESSMENT ORDER BUT DID NOT CONTROVERT THE FACTUAL FINDING MENTIONED IN THE IMPUGNED ORDER . 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. SINCE IDENTICAL ISSUE IS INVOLVED IN ALL T HESE APPEALS THEREFORE THESE ARE DISPOSED OF BY THIS COMMON AND CONSOLIDAT ED ORDER FOR THE SAKE OF BREVITY. BRIEF FACTS ARE THAT ON VERIFICATI ON OF TDS/TCS OF THE OFFICE OF THE DISTRICT FOREST OFFICER (PRODUCTION) DEWAS THE ASSESSING OFFICER OBSERVED THAT THE DFO MADE SALES OF FOREST PRODUCE THROUGH AUCTION AMOUNTING TO RS.13 13.32 AND 14.70 CRORES FOR THE RESPECTIVE FINANCIAL YEARS AND DID NOT COLLECT THE TAX AT SOUR CE AND MERELY COLLECTED DECLARATION FORM IN FORM NO. 217C FROM THE BUYERS. IT WAS FURTHER OBSERVED THAT THE SAID DECLARATION FORMS WERE RECEI VED AFTER THE DATE OF AUCTION AND SOME OF THE FORMS WERE INCOMPLETE. THE LEARNED ASSESSING OFFICER WAS OF THE VIEW THAT THE SELLER (DFO) WAS L IABLE TO COLLECT TAX AT SOURCE AMOUNTING TO RS.29 38 771/- RS.37 36 697/- RS. 41 63 175/- RESPECTIVELY UNDER SECTION 206C(1) AND RS. 12.06 0 55/- RS. 10 94 336/- AND RS. 6 95 675/- AS INTEREST U/S 206C(7) OF THE A CT. THE ASSESSEE ORGANIZATION IS OWNED BY THE STATE GOVERNMENT AND I S ADMINISTERED BY THE OFFICER OF THE FOREST DEPARTMENT AND HIS DUTY INCLUDES AMONGST 3 OTHERS PRESERVATION OF FOREST AND SALE OF TIMBER A ND OTHER FOREST PRODUCTS. AT THE TIME OF SALE THE ASSESSEE ANNOUNC ES THE TERMS OF AUCTION AND ON LOT BASIS THE AUCTION IS HELD AS TH E TIMBER IS NORMALLY SOLD IN LOTS. ON THE AUCTION DATE VARIOUS BIDDERS APPEARED FOR BIDDING WHO WERE REQUIRED TO DEPOSIT 10% OF THE BIDDING PRI CE OR RS.1000/- WHICHEVER IS MORE THE HIGHEST BIDDER IS ALLOTTED A PARTICULAR LOT. AFTER THE ALLOTMENT OF A PARTICULAR LOT A LOT NUMBER/MARK IS ALLOTTED AND THE HIGHEST BIDDER IS SUPPOSED TO DEPOSIT UPTO 25% OF THE BID A MOUNT WITHIN 7 DAYS FROM THE SALE OF AUCTION. ON RECEIPT OF 25% OF THE BIDDING PRICE A SANCTION LETTER IS ISSUED DIRECTING THE BIDDER TO D EPOSIT THE REMAINING BALANCE I.E. 75% AND THE AMOUNT OF SALES TAX AND IN COME TAX. AFTER THE ISSUANCE OF SANCTION THE BALANCE 75% THE REMAININ G AMOUNT IS PAYABLE WITHIN 45 DAYS FROM THE DATE OF APPROVAL/SANCTION O F THE SALE. THE PERIOD MAY BE EXTENDED UPTO 75 DAYS ON PAYMENT OF I NTEREST AT THE RATE OF 18% PER ANNUM. THE BIDDER IS ALLOWED TO REMOVE THE GOODS/LOT ON THE RECEIPT OF FULL AMOUNT AND THEN A WORK ORDER IS PASSED AUTHORISING THE BIDDER TO REMOVE THE GOODS FROM THE SITE OF AUC TION/STORAGE. AT THE TIME OF DEPOSIT OF REMAINING 75% THE BIDDER IS REQU IRED TO FURNISH THE DECLARATION FORM 27C OR PAY THE TAX COLLECTED AT SO URCE U/S 206C(1) OF THE ACT. THIS PRACTICE IS CONSISTENTLY FOLLOWED. I F THIS PROCEDURE IS ANALYSED THE SALE IS COMPLETE ONLY WHEN THE FULL CO NSIDERATION IS PAID AND THE EARMARKED GOODS ARE ALLOWED TO BE REMOVED . IF THE PROVISIONS 4 OF SECTION 206C ARE KEPT IN JUXTAPOSITION WITH THE AFORESAID PROCEDURE/FACTS THEN THERE IS NO MUCH RELEVANCE RE MAINS TO THE OBSERVATION OF THE ASSESSING OFFICER BECAUSE MOST O F THE BIDDERS ARE INCOME TAX ASSESSEES AND HAVE FURNISHED THEIR PANS. IN THE PRESENT APPEALS THE ASSESSEE FURNISHED THE COPY OF BID SHE ETS AND SANCTION LETTERS WHEREIN THE LIABILITY OF INCOME TAX IS CLEA RLY MENTIONED WHEREAS THE SUCCESSFUL BIDDER WAS ASKED TO PREPARE SEPARATE BANK DRAFTS TOWARDS INCOME TAX AND SALES TAX LIABILITIES PAYABL E ON THE BID AMOUNT. EVEN OTHERWISE THE AMOUNT OF RS.2.52 CRORES WAS CO LLECTED AT SOURCE OUT OF THE SALE OF RS.13 CRORES DURING THE FINANCIA L YEAR 2005-06 AND DID NOT COLLECT THE TAX AT SOURCE ONLY IN THOSE CASES W HERE THE DECLARATION IN FORM NO . 27C WAS RECEIVED BY HIM THEREFORE UNDER THE EXPRESS PROVISIONS OF SECTION 206C(1)(A) SELLER WAS NOT SU PPOSED TO COLLECT THE TAX AS PER SECTION 4 OF THE SALE OF GOODS ACT WHEN THE PROPERTY IS TRANSFERRED TO THE BUYER BY THE SELLER AT THAT STA GE THE CONTRACT CYSTALISES AND IF SUCH CONTRACT TO TRANSFER IS SUBJ ECT TO CERTAIN CONDITIONS OR HAS TO TAKE PLACE ON FUTURE DATE IT IS CONSTRUE D AS AGREEMENT TO SELL. IN THE PRESENT APPEALS SINCE THE SELLER WAS TO ISS UE SANCTION LETTER TO THE BIDDER IN CONFIRMATION OF CONTRACT WHICH CAN BE TE RMED AS AGREEMENT TO SALE AND THE TRANSFER OF THE GOODS IS TO TAKE PLACE ON SOME FUTURE DATE IT CAN BE SAID THAT THE SALE HAS NOT ACTUALLY TAKEN PL ACE ON THE DATE OF AUCTION.IN VIEW OF THESE FACTS NO LIABILITY U/S 20 6C(1) AROSE TO COLLECT THE 5 TAX AT SOURCE THEREFORE THE APPLICABILITY OF INTE REST U/S 206C(7) IS CONSEQUENTIAL. IN VIEW OF THESE FACTS WE FIND NO INFIRMITY IN THE STAND OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AN D CONFIRM THE SAME. FINALLY THESE APPEALS OF THE REVENUE ARE DISMISSED . ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF L EARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF HEARING ON 31 ST MAY 2010. SD/- SD/- (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER 31 ST MAY 2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE *DBN/