TaxTMI 
TaxTMI 
2006 (9) TMI 354
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.... (Act) as well as charging of interest under section 201(1A) of the Act. 3. Briefly stated the facts are these: The assessee is a firm engaged in transporting goods mainly for Asian Paints Ltd. and its sister concern Hindustan Mineral Products from their factories at Ankleshwar to any place in India, mainly south India. The assessee firm does not own any trucks but hires the same from different parts for the purpose of transporting goods of the above parties. A survey was conducted at the premises of the assessee but books of account were not found since, according to the assessee, the books were lying in their branch office in Ankleshwar. Accordingly, the assessee was asked to produce books of account along with other details for which ....
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.... vide letter dated 17-1-2003, submitted before the Assessing Officer as under: "Whenever the need arises, we approach the owners of trucks/tankers/trailers and the rates are negotiated at that point of time with the truck owners/drivers, which vary from time to time due to fluctuations in demand and supply. From the seized register you will see that the rates for the trucks supplied by the various other transporters for a particular destination on the same day vary from Rs. 100/- to Rs. 200/- per trip depending upon the market conditions because we have not entered into any specific contract for any specific period at any specified agreed rate with any of the truck owner/supplier. Further the scrutiny of the seized register will sh....
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....th such parties for any length of time, it does not make it a continuous contract in view of the fact that the rate differs every time and is renegotiated based on market conditions. In such scenarios, please note that CBDT's Circular No. 715 states that each GR is a separate contract even if payments of more that one GR are made altogether. Hence, you are requested not to treat is as a continuous contract." The assessee also relied on the CBDT Circular No. 715, dated 8-8-1995. However, the Assessing Officer was not satisfied with the explanation of the assessee. He was of the view that Board Circular was not applicable since it lays down that if the goods are transported continuously in pursuance of a contract for a specified period or ....
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....l while stating the facts. On the other hand, the Learned D.R. has reiterated the reasons given by the Assessing Officer. 5. Rival submissions of the parties have been considered in the light of the relevant provisions, Board Circular and the facts of the case. The perusal of the provisions of section 194C reveals that tax is to be deducted at source where any sum is paid for carrying out any work in pursuance of a contract between the contractor and various persons mentioned in various clauses under sub-section (1) of section 194C. Sub-section (3) provides that no deduction shall be made where the amount to be paid or credited does not exceed Rs. 20,000/-. These provisions have been explained by the Board Circular No. 715 dated 8-8-1995....
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....ore than 3,000 trips, as per the assessee, were made, out of which, few trips have been noted by the Assessing Officer where the assessee had made payments to the owner of a same lorry. The details of the same are placed in the Paper Book before us. The perusal of the same does not indicate that trips were made continuously under a contract. The Assessing Officer has not brought any material to prove that there existed any specific contract between the assessee and any of the truck owners. From the perusal of the details, we find that one truck bearing No. KA-22-A-8751 was hired five times in the financial year 1998-99 but in different months, for e.g., July, August, November, December and March. The gap is too large and it cannot be said t....