AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (9) TMI 208
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....the entire expenditure of Rs. 14,57,703/- and Rs. 77,69,537/- was disallowed. Thus, addition of Rs. 92,27,420/- was made. 3. In the assessment year 2008-09, the respondent-assessee had declared income of Rs. 19,06,365/- during the previous year, but after setting off brought forward losses, the total taxable income was declared as "Nil". The assessee had declared book profits of Rs. 23,63,480/- under Section 115JB of the Act. In the order relating to the assessment year 2008-09, again the entire expenditure of Rs. 48,61,509/- was disallowed holding that there was failure to deduct tax at source under Section 194C of the Act. Accordingly, the income as declared was enhanced by the said amount. 4. Section 194C was inserted by Finance Act, 1972 to mandate deduction of tax at source, on payments made to a contractor for carrying out any work including supply of labour. Tax was to be deducted by the stipulated payer at the rate of 1 or 2 per cent. 5. The expression "carrying out any work" or the word "work" was interpreted by the Delhi High Court, for the purpose of the said Section, in S.R.F. Finance Ltd. Vs. Central Board of Direct Taxes and Ors [1995] 211 ITR 861, to exclude profe....
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....n Act, 1956 (3 of 1956) ; or (j) any firm ; or (k) any individual or a Hindu undivided family, or an association of persons or a body of individuals, whether incorporated or not, other than those falling under any of the preceding clauses whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such sum is credited or paid to the account of the contractor, shall, at the time of credit of such sum to the account of the 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- (i) one per cent. in case of advertising, (ii) in any other case two per cent., of such sum as income-tax on income comprised therein : Provided that no individual or a Hindu undivided family shall be liable to deduct income-tax on the sum credited or paid to the account of the contractor where such sum is credited or paid exclusively for personal purposes of such individual or any member of Hindu undivided family....
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....explaining Revenue"s point of view with reference to amended Section 194C w.e.f. 1st July, 1995. Question No"s. 6 and 7 are relevant for the purpose of understanding whether tax at source was required to be deducted in the present case. The said questions and opinions/answers given by CBDT in the said circular read as under: "Question 6: Whether payment under a contract for carriage of goods or passengers by any mode of transport would include payment made to a travel agent for purchase of a ticket or payment made to a clearing and forwarding agent for carriage of goods? Answer : The payments made to a travel agent or an airline for purchase of a ticket for travel would not be subjected to tax deduction at source as the privity of the contract is between the individual passenger and the airline/travel agent, notwithstanding the fact that the payment is made by an entity mentioned in section 194C(1). The provisions of section 194C shall, however, apply when a plane or a bus or any other mode of transport is chartered by one of the entities mentioned in section 194C of the Act. As regards payments made to clearing and forwarding agents for carriage of goods, the same shall be subje....
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....indings of the Tribunal being factual and the Revenue having preferred these appeals challenging the said findings, by the order dated 23rd September, 2013 passed in ITA 359/2012, it was inter alia directed :- "Learned counsel for the appellant has filed two charts along with copies of sample invoices. Initially, she had submitted that MSS-I invoices submitted by the respondent were incorrect and no break up was given. However, we find that MSS-I invoices have been also filed by the appellant themselves. Learned counsel for the respondent has drawn our attention to the assessment order and referred to paragraph 8 and 9 thereof. In paragraph 9, the assessing officer has mentioned that the expenses amounting to Rs. 1240288/- were claimed under the head clearing and forwarding and list of 31 parties was furnished. Payments to 30 parties were below the amount on which TDS was required to be deducted. In respect of one party, the assessee had furnished a certificate issued by the Department that no TDS was required to be deducted. The assessing officer thereby did not make any disallowance on the said payments. The submission of the respondent is that addition Rs. 4861509/- made by t....