2012 (8) TMI 334

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....94C(1). 2. Briefly stated, assessee is in the business of transport arranging vehicles for transportation of goods and earning commission thereof. Assessee has shown lorry freight received at Rs.79,71,542/- and claimed lorry cartage paid at Rs.74,22,592/- showing net revenue of Rs.5,48,950/-. It returned a net profit of Rs.5,686/- from the business. Assessee claimed refund of the TDS on the basis of certificates. AO while assessing gross receipts at Rs.1,72,39,660/- on the basis of certificates and statements did not allow any payment on the reason that assessee has not given any evidence to prove the genuineness of the amount credited and debited in the Profit & Loss A/c. He was of the view that as the said certificates are in the names....

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....0,000/- and the CIT (A) holds that assessee being a sub contractor supposed to deduct the tax on payment to truck drivers. Therefore, he upheld the disallowance to the extent of Rs.1,16,38,870/- and granted a relief ofRs. 56,00,790/-.   5. We were not informed whether any cross appeal is pending on this issue. Therefore, we have proceeded to dispose of assessee's appeal on merits. 6. It was the learned Counsel's submission that AO rejected the books of account and brought total receipts of income out of statements furnished and when the books of account were rejected, other provisions of the act particularly with reference to the disallowance under section 40(a)(ia) does not arise. He relied on the proposition laid down in the ca....

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....is of the Special Bench decision in the case of M/s. Merilyn Shipping & Transports vs. ACIT in ITA No.477/Viz/08 dated 29.3.2012. It was further submitted that mere introduction of truck drivers to transporters did not amount to contract for carrying out of any work of transporters as per section 194C. The learned Counsel relied on the decision of the Hon'ble Madras High Court in the case of CIT vs. Poompuhar Shipping Corporation Ltd. (2006) 282 ITR 3 (Mad). 7. The learned DR while admitting that AO brought gross receipts to tax without allowing the expenditure and has not specifically invoked the provisions of section 40(a)(ia) and referred to the CIT (A)'s order to submit that there was a finding that assessee paid more than Rs.50,000/....

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....ITR 3 (Mad) has held that mere introduction of truck drivers to transporters would not amount to a contract for carrying out any work of transporters as admissible in section 194C. However, these principles can only be applied, if it is established that assessee is not in the business of transportation. The details filed in the form of paper book, particularly the receipts received during the year and the amounts expended which shows that assessee has earned total freight of Rs.1,72,39,660/- on which there is no dispute. However, in the written submissions as well as in the books of account, the net receipts as commission was shown at Rs.5,48,950/- whereas in the statement filed in the paper book the net commission was shown at Rs.7,95,0....