2010 (6) TMI 796

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.... of TDS not deducted on transport expenses. 2. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in holding that due to clerical mistake, the accounts are not auditable when the assessee has shown turnover of Rs. 91,08,873/- in his duly verified return of income and claimed expenses of Rs. 88,35,698/- on the debit side. 2. Since, the facts and issue involved in all the above grounds of appeal are common they are being considered and decided together as under. 3. The brief facts of the case are that the assessee engaged in the business of tempo plying. The assessee is having three tempos in carrying out his business. The Learned Assessing Officer observed that assessee claimed transport expens....

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....and preparing Profit & Loss account. Further, transport expenses are liable to TDS and the assessee has not deducted TDS on transport expenses of Rs. 88,35,698/- and has failed to furnish partywise ledger account of the assessee. Therefore, he disallowed the transport expenses made by the assessee and made addition of Rs. 88,35,698/- to the income of the assessee. 4. In appeal before the Learned Commissioner of Income Tax(Appeals) it was claimed by the assessee that his volume of turnover and expenses of the business are actually quite low and that because of the mistake of accountant, the figure of turnover expenses etc. were projected high before the Learned Assessing Officer. It was claimed by the assessee that he has filed return on ....

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....ioner of Income Tax(Appeals) and submitted that in view of the provisions of Clause (l) of Explanation to section 194C(7), a contractor is liable to deduct TDS from payments made to contractee, where the accounts of such payer are liable to audit 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. Since, it is an undisputed fact that the turnover in the immediately preceding Assessment Year was less then Rs. 40,00,000/- therefore, the assessee was not liable to deduct TDS from the payments made for transport expenses. 7. We have heard the rival submissions and perused the materials available on record. In ....