TaxTMI 
TaxTMI 
2015 (12) TMI 399
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....greement between the assessee and the transporter, without considering that, the moment the transporter undertakes the task of transporting the assessee's goods from one place to another, it amounts to contract and TDS needs to be deducted." 2. The appellant prays that the order of the CIT(A) on the above ground may be set aside and that of the Assessing Officer restored. The appellant craves leave to amend or alter any ground or add new ground which may be necessary." 3. The Brief facts of the case are that the assessee is engaged in the business of transportation under the name and style of M/s Express Transport. During the course of assessment proceedings, the assessee was called upon by the A.O. to file the details of various expenses claimed and details of tax deducted at sources on these expenses and deposited with Revenue. In response, the assessee filed the following details of transportation charges paid to the respective parties:- Sr. No. Name of the party Amount 1 Anwar Merchant 23,36,000 2 Balaji Building 1,00,000 3 Bharat Motors 1,25,000 4 Ganesh Patil 5,09,525 5 Good Luck Transport 6,33,130 6 Hafi....
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....me and managed transporters for me whom I do not recognize. In fact, I have debited such persons only in my books of accounts and sum paid by me actually to the outsiders who were arranging the transport for me on SOS basis. 3. That, these persons appearing in my books of accounts had in turn handed over the sum paid by me for carriage of goods and services to various parties stranger to me but called by these persons from open market of transporters. 4. That I have no contract, written or oral with any of the persons or actual parties in transport business. 5. That I am illiterate person having passed 7th standard with much of educational hardship and unable to understand law or complexity of business. 6. That no single payment is done on any day to any person for more than Rs. 20,000/- in cash. 7. That when some actual transport did my transporter directly, though picked up from open market, he was paid through account payee cheque only. WHATEVER STATED hereinabove is true and correct to the best of my knowledge and belief." The CIT(A) accepted the contentions of the assessee and held that the A.O. has not given any finding of fact ....
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....ha in ITA no 1369/Rjt./2010 dated 13th September 2013 reported in (2013) 37 CCH 106 Rajkot Trib. 8. We have heard the ld. D.R. and perused the material placed on record including the case laws relied upon. We have observed that the assessee is engaged in the business of transportation and has made payment of transport charges of Rs. 94,61,762/- to various parties during the assessment year which was claimed as an expense by the assessee ( The details of Transport charges of Rs. 94,61,762/- paid by the assessee is produced in the chart in the preceding para's ) . As per the A.O., no tax has been deducted at source by the assessee against these payments of transport charges of Rs. 94,61,762/- made during the assessment year and no details for such default because of non-deduction of tax at source were furnished and hence addition of Rs. 94,61,762/- was made by the AO u/s 40(a)(ia) of the Act for default because of non deduction of Tax at source as covered u/s 194C of the Act on these payments of transport charges by the assessee during the assessment year. On first appeal, the CIT(A) deleted the addition of Rs. 94,61,762/- holding that the A.O. has not given any finding of fact as....
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....need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both; or (g) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India; or (h) any trust; or (i) any University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act, 1956 (3 of 1956); [or] [(j) any firm,] 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.] (2) Any person (being a contractor and not being an individual or a Hindu undivided family) responsible for paying any sum to any resident (hereafter in this section referred to as the sub-contractor) in....
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....ned paying or crediting such sum, in the prescribed form and verified in the prescribed manner and within such time as may be prescribed, if such sub-contractor is an individual who has not owned more than two goods carriages at any time during the previous year: Provided also that the person responsible for paying any sum as aforesaid to the sub-contractor referred to in the second proviso shall furnish to the prescribed income-tax authority or the person authorised by it such particulars as may be prescribed in such form and within such time as may be prescribed; or] (ii) any sum credited or paid before the 1st day of June, 1972; [or] [(iii) any sum credited or paid before the 1st day of June, 1973, in pursuance of a contract between the contractor and a co-operative society or in pursuance of a contract between such contractor and the sub-contractor in relation to any work (including supply of labour for carrying out any work) undertaken by the contractor for the co-operative society.] [Explanation.-For the purposes of clause (i), "goods carriage" shall have the same meaning as in the Explanation to sub-section (7) of section 44AE.] .....
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....for deduction of tax at source provided the stipulated conditions are fulfilled as detailed in the proviso. The Section 194C of the Act further provides that payments to sub-contractor by the contractors shall also be liable for deduction of tax at source u/s 194C of the Act. It also provide that the work shall also include carriage of goods or passenger by any mode of transport other than railways. The assessee in the instant appeal is in the business of transportation. The assessee has averred in the affidavit filed before the CIT(A) that he has made the payments as transportation charges to various parties who are not actual transporters but who have independently arranged actual transporters from open market for carriage of goods by transport for the assessee . These intermediaries to whom the assessee has made payments as transportation charges have in turn made payments to the actual transporters out of the money collected from the assessee. The main contention of the assessee is that the payments have not been made in 'pursuance of a contract' between the assessee with any of the person or the actual transporters. Now the question arises before us is that whether there is....
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....ct are not limited to written contracts and all payments made in pursuance of written, oral, implied or quasi contracts are covered u/s 194C of the Act. Thus, a contract need not be in writing; even an oral , implied or quasi contract is good enough to invoke the provisions of Section 194C of the Act. As Hon'ble Karnataka High Court has observed in the case of Smt. J. Rama v. CIT [2012] 344 ITR 608/[2010] 194 Taxman 37, "Law does not stipulate the existence of a written contract as a condition precedent for (invoking the provisions of section 194C with respect to) payment of TDS". Contract need not be in writing. It may infer from the conduct of the parties. It may be oral or implied also. Our aforesaid view is duly supported by the decision of ITAT, 'A' Bench, Kolkata in the case of Dy. CIT v. Kamal Kr. Mukherjee & Co. (Shipping) (P.) Ltd. [2012] 51 SOT 73 (URO)/20 taxmann.com 670 , DCIT v. Five Star Shipping Agency Private Limited (2015) 59 taxmann.com 369 (Kol.Trib.) and the decision of the Tribunal in the case of ITO v. Rajesh A Boricha (supra). Thus, In our considered view, the assessee has entered into contract with these intermediaries for the work of hiring of t....
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....pendently by these intermediaries . The assessee has relied upon the decision of Hon'ble Punjab and Haryana High court in the case of ITO(TDS) v. United Rice Land Limited(supra) but the facts of that case are quite different and distinguishable from the facts of the assessee as in the said case there was finding of fact recorded based on certificates of the alleged transporters which was not controverted by the Revenue that the concerns to whom payments were made were arranging the shipment i.e. arranging the vessel/ships, loading in the ship and clearing the port and similarly there was a finding of fact that other alleged transporters were not transporting the goods of the assessee but merely arranging a truck for which service charges of Rs. 250-200 was collected from the truck owners/operators . In the case of United Rice Land Limited (supra) , there was uncontoverted finding of fact that the assessee therein was instructing for payment of truck charges and whatever charges were instructed by the assessee therein was paid by these C&F agents which was later reimbursed by the assessee and these C&F agents to whom the assessee therein made the payments have not independently appo....