TaxTMI 
TaxTMI 
2013 (7) TMI 258
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....in its grounds of appeal for both the assessment years, raised an identical solitary issue which reads as under: "that the CIT (A) erred in deleting the additions of Rs.2,41,19,044/- and Rs.2,26,75,125/- made on disallowances of expenses u/s 40(a)(ia) of the Act in respect of freight charges for the AYs 2008-09 and 2009-10 respectively." 3. As the issues raised by the Revenue pertains to the same assessee, for the sake of convenience, both the appeals were heard, considered together and disposed of in this consolidated order. 4. Briefly stated, the facts of the issue are as under: 4.1 The assessee is an individual and she is the proprietrix of Sri Krishna Transport and Sneha Enterprises. The assessee had furnished her returns of....
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....um to the account of the sub-contractor or at the time 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. In view of the facts mentioned above and the Court judgments relied on by the assessee and there is no provision to make TDS with contract, and the addition made by the AO u/s 40(a)(ia) is dismissed............" [Courtesy: CIT (A)'s order for the AY 2009-10] 5. Aggrieved, the Revenue had come up before us with the present appeals. It was submitted by the learned D R that the CIT (A) had erred in deleting the additions made on the disallowance of expenses u/s 40(a)(ia) of the Act. Further, it ....
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.... not justified in holding that in certain cases the sums paid by the assessee to truck owners/drivers exceeded the limits specified u/s 194C of the Act; - That the proviso to s. 194C (3) provides that the contractor shall be liable to deduct tax at source, if the aggregate of the amounts of such sums credited or paid during the financial year exceeds Rs.50000/-; and that for the purpose of said proviso, the AO aggregated the payments on the basis of truck numbers; - That the aggregation has to be made on the basis of individual goods receipt raised for each trip, for the reason that each trip is a separate contract between the assessee and the truck owners/drivers; - That no single payment made by the assessee during the relevant a....
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....hat non-furnishing of Form 15-I to the CIT for the AY 2009-10 was merely a technical default which cannot be a reason for disallowance u/s 40(a)(ia) of the Act; - Relies on the following case laws: (i) Valibhai Khanbhai Mankad v. DCIT (2011) 139 TTJ (Ahd) 70; (ii) Pareek Electricals v. ACIT (2013) 55 SOT 338/(2013) 151 TTJ 526 (Cuttack) - That sections 191 and 201 of the Act provide that the assessee shall be regarded as 'an assessee in default' if (a) the payer does not deduct tax, (b) the payer, after deducting fails to pay & (c) payer does not pay. In other words, if the payer remits the tax to the Government, he/she shall not be regarded as 'an assessee in default'; - That the assessee had remitted TDS of Rs.3,03,211/- an....
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.... acknowledged that "..........The amount of TDS deducted and paid by the assessee to the Government account is Rs.3,03,211/- on the different dates during the year. The copy of ledger account under the head TDS Transportation was filed. The same is verified from the challan details available in the name of the assessee in the system and the payments are found to be made on the following dates...." [Source: Page 2 of Asst. order for 2008- 09]. As rightly argued by the learned AR, once the assessee (payer) has discharged the TDS compliance in accordance with the Ch. XVII read with s. 195 A of the Act, there cannot be any disallowance u/s 40(a)(ia) of the Act. 6.2. At this juncture, we would like to refer to the findings of the Co-ordina....
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....s. Another aspect of the issue before us is where the assessee has pad the TDS amount into the account of the Government before the due date of filing of the return, whether the disallowance u/s 40(a) (ia) is called for. In the provisions of sec. 195A, there is reference to agreement or arrangement for the payment of tax free income. However, it is not clear as to whether such an agreement or arrangement has to be in writing. In the absence of specific provision for the arrangement or agreement to be in writing, it can be presumed that the agreement or arrangement can be oral also. From the fact that the assessee has failed to deduct the tax at source and has made the provision for such payment of tax at the end of the year, it is to be pre....