TaxTMI 
TaxTMI 
2013 (10) TMI 1398
X X X X Extracts X X X X
X X X X Extracts X X X X
....een confirmed by Ld CIT(A), the assessee has filed these appeals before us. All these appeals were heard together and hence they are being disposed of by this common order, for the sake of convenience. 2. The facts relating to the issues under consideration are stated in brief. The assessee is running a proprietary concern by name "Alleppey Parcel Service", wherein he is carrying on the business of transportation of goods on behalf of his clients. The assessee is having franchisees in various places. The AO noticed that the assessee has paid "Commission" in all the three years to the franchisees, but did not deduct tax at source from the said payments as required by the provisions of sec. 194H of the Act. It was also noticed that the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ities have not appreciated the "impossibility of performance" by the appellant, since it would not be possible for him to deduct tax at source. He further submitted that the relationship between him and the franchisees is on "principal to principal" basis and there is no principal-agent relationship between them. The assessee has been accounting the charges, expenses etc., deducted by the assessee under the head "Commission payments", but that does not mean that there exists "principal-agent" relationship between them. Further the assessee has been accounting all the payments, i.e., charges deducted by them, expenses incurred by them on behalf of the assessee etc. under the head "Commission payments", for the sake of convenience. If at all ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....12 in sec. 40(a)(ia) of the Act shall not apply to the provisions of sec. 201 of the Act. The Ld D.R further submitted that the contentions raised by Ld A.R have not been substantiated with evidences either before the AO or before Ld CIT(A) or before AO in remand proceedings. She further submitted that the assessee has failed to furnish any materials before Tribunal also. The Ld D.R submitted that the auditor of the assessee in his audit report has reported that the assessee has not deducted tax at source from commission payments. Accordingly she submitted that the orders passed by Ld CIT(A) should be sustained. 5. In the rejoinder, the Ld A.R submitted that the assessee would be in a position to collect the income tax details of franchi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mbursement made to the franchisees. According to the tax authorities, the assessee could not furnish exact break-up details of the expenses and further those expenses were supported by self made vouchers. We notice that the tax authorities have rejected the claim of the assessee for the reason that the expenses are supported by self made vouchers. In our view, it may not be correct on the part of the tax authorities to do so, since the veracity of expenses is a matter that is required to be looked into at the time of assessment of income. Under TDS proceedings, it is necessary to identify the payments on which there is a liability to deduct tax at source. In our view, the question whether the tax is required to be deducted at source only on....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be liable to deduct tax at source u/s 194C of the Act in respect of building construction. Thus, the AO either in the original proceedings or in the remand proceedings did not examine whether the assessee has constructed the building by giving it on contract to somebody or not. On the contrary, we notice that the assessee has submitted right from the beginning that the building was constructed by the assessee himself and he did not engage any contractor. We notice that the tax authorities did not make any attempt to controvert the said contentions of the assessee. We also notice that the Ld CIT(A) has also failed to address the above said contention of the assessee. Accordingly, we are of the view that the assessing officer has failed t....