2012 (3) TMI 491

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....n law and on facts of the case in framing an appellate order for AY 2005-06 on 22.07.2008. 2. The Learned Commissioner of Income Tax (Appeals) XV Ahmedabad has erred in confirming the addition of Rs. 7,57,740/- out of Freight Expenses U/s. 40 (1) (ia) of the I.T. Act." 2. Briefly, the facts of the case as emerged from the order of the learned CIT(A) are that the assessee is engaged in the business of goods transportation services. During the year under consideration the has shown gross freight receipt of Rs. 2,15,74,829/-. The assessee against this freight receipt, has shown lorry hire charges of Rs. 87,86,780/-. The assessee was asked by the AO to furnish details of deduction of tax on payment of lorry hire charges. The assesse....

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.... Rs. 35,30,310/- it was submitted by the assessee that (i) there were as many as 610 payments and for each payment there was separate GR/lorry challan, (ii) the amount of any single sum credited or paid to the truck driver/agent has not exceeded to Rs. 20,000/-, (iii) the aggregate of amount of such payment during the financial year did not exceed to Rs. 50,000/- and that (iv) payment was made to truck drivers for each trips and goods were transported at one time and there was no contract for a specific period or quantity for the goods to be transported and further submitted that no disallowance u/s 40(1) (ia) of the IT Act be made. 2.1 The AO also noted that out of Rs. 35,30,310/-, a sum of Rs. 24,79,780/- represented payment below Rs. ....

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....er submissions made before the authorities below and produced copy of the written submission produced before the learned CIT(A) along with a copy of the details of delivery of goods and payments made thereof. She also referred to clarifications on various provisions relating to tax deduction at source regarding change introduced through Finance Act, 1995. The learned AR further relied on the decision of the ITAT Bangalore "B" Bench in ITA No.665/Bang/2010 dated 21-01-2011. The learned AR submitted that the assessee had only hired vehicles along with driver in order to transport goods of its client. Therefore, provisions of TDS are not applicable to it. She further argued that wherever provision of TDS was applicable tax was deducted and pai....