TaxTMI 
TaxTMI 
TaxTMI 
2009 (10) TMI 558
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....e Society to the truck owners who were also the members of the society, were subject to deduction at source in view of section 194C(2), being payments made to the truck owners in their capacity as Sub-Contractors." 1 Whether the reporters of the local papers may be allowed to see the Judgment? yes 2. In ITA Nos.25, 45, 46 & 50 of 2006 the following question of law is involved: "Whether under Section 194C(2) of the Income Tax Act the assessee is liable to deduct TDS." 3. Briefly stated the facts of the case are that except for the Sirmour Truck Operators Union, the assesses in these appeals are registered Cooperative Societies. The Sirmour Transport Truck Operators Union is an un-registered Association of persons. However, this diffe....
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.... contract with the sub-contractor for carrying out, or for the supply of labour for carrying out, the whole or any part of the work undertaken by the contractor or for supplying whether wholly or partly any labour which the contractor has undertaken to supply shall, at the time of credit of such sum to the account of the sub-contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income-tax on income comprised therein." 6. The Assessing Officer decided the case in favour of the Revenue. However, the Commissioner Income Tax as well as the Tribunal have decided the matter in favour of the assessee. According to the ....
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....Taxes vs. Cochin Goods Transport Association, (1999) 236 ITR 993 and Birla Cement Works vs. Central Board of Direct Taxes and others, (2001) 248 ITR 216. In our considered view these judgments have no relevance to the present case because in these cases the only question involved was the interpretation of the word 'work' in Section 194C. In the present case the question which arises before us is whether the owners of the trucks who were members of the society would fall within the purview and ambit of Section 194C(2) or not. 10. The respondents contend that in view of the law laid down by the Apex Court in Chelmsford Club vs. Commissioner of Income-tax, (2000) 243 ITR 89, the income of the society arises out of mutual transactions ....
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....Section 194C(1). The entire amount received by the assessee from the Companies after deductions was paid to the members of the truck operators who had carried the goods after deducting a nominal sum as "parchi charges". The question which arises is whether the members are sub-contractors or not. 12. The main contention of the Revenue is that since the assessee has a separate juristic identity and each of the truck operators who are members of the assessees have separate juristic identity they are covered with the meaning of Section 194C(2). It is urged on behalf of the Revenue that since the assessee being a person is paying a sum to the member truck operator who is a resident within the meaning of the Act, TDS is required to be deducted. ....
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....the truck operators on an equitable basis. A finding of fact has been rendered by the authorities that the societies were formed with a view to obtain the work of carriage from the Company since the Companies were not ready to enter into a contract with the individual truck operators but had asked them to form a society. 14. Admittedly, the society does not retain any profits. It only retain as nominal amount as "parchi charges" which is used for meeting the administrative expenses of the society. There is no dispute with the submission that the Society has an independent legal status and is also contractor within the meaning of Section 194C. It is also not disputed that the members have a separate status but there is no sub-contract betwe....