TaxTMI 
TaxTMI 
2010 (1) TMI 411
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....nue has claimed that from the order of the Tribunal two substantial questions of law would emerge and are required to be adjudicated by this court which are as under : "(i) Whether on the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal was right in law in deleting the disallowance made under section 40(a)(ia) of the Income-tax Act in view of the amended provisions of section 194C(3)(i) of the Income-tax Act." "(ii) Whether on the facts and circumstances of the case the goods supplied by M/s. Tata Steel not being inclusive of freight and, there-fore, the freight charges charged separately by M/s. Tata Steel falls under the provisions of section 194C of the Income-tax Act, 1961." 2. The facts of ....
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....terial on record to prove any written or oral agreement between the assessee and the recipients of goods for transportation or carriage thereof. The Tribunal had further observed that there was no material to show that the payments of freight had been made in pursuance of a contract of transportation of goods for a specific period, quantity or price. The aforesaid fact being an essential feature to test the applicability of section 194C of the Act as considered by a Division Bench of this court in the case of CIT v. United Rice Land Ltd. [2008] 217 CTR (P&H) 332 ; [2010] 322 ITR 594. A further finding of fact is that the freight payment is Rs. 1,72,723 and none of the individual payments exceeded Rs. 20,000. It was also not disputed that th....
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....impugned parties which would make the assessee liable for deduction of tax at source under section 194C of the Act. Reliance placed by the Revenue on the proviso to section 194C(3)(i) also does not help since in this case, the assessee does not fall within the scope of sub-section (1) of section 194C following the reasoning laid down by the hon'ble High Court in the case of United Rice Land Ltd. [2008] 217 CTR (P&H) 332; [2010] 322 ITR 594. Consequently, the disallowance of such amount cannot be justified by invoking the provisions of section 40(a)(ia) of the Act. The order of the Commissioner of Income-tax (Appeals) is set aside and the Assessing Officer is directed to delete the impugned addition. The assessee succeeds on this ground."....
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....remitted to the State exchequer within the time allowed. The amount of Rs. 2,01,81,428 stood paid by the assessee/ respondent to M/s. Tata Steel as freight charges for carriage of its goods on which tax was not deducted in terms of section 194C of the Act and, there-fore, such amount is not deductible while computing the taxable income. 6. When the matter was heard by the Tribunal a copy of the distribution agreement between the assessee and M/s. Tata Steel was placed on record. According to the agreement, the assessee-respondent had been appointed distributor for marketing of products of M/s. Tata Steel which envisages purchase of production by the assessee-respondent and sale thereof. The Tribunal has quoted clauses 2.14 of the a....
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....es. This court negated the stand of the Revenue and held that if expenses incurred by a person on account of transportation and interest, etc., were added to the cost of the goods then it would not lead to an inference that such a person had paid separately for services of transportation and interest, etc., as it becomes part of the cost of the product purchase. Therefore such amount charged separately cannot be held liable to deduction of tax at source under section 194C of the Act. The view of the Tribunal is discernible from paragraph 25 of the order which reads thus : "25. Putting the aforesaid logic to the instant case, it is evident that the expenses of freight incurred by M/s. Tata Steel, which have been shown separately in ....