2016 (7) TMI 745

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... 2. The only issue to be decided in this appeal of revenue is as to whether the Ld. CIT(A) is justified in deleting the addition made in the sum of Rs. 39,12,411/- u/s. 40(a)(ia) of the Act in the facts and circumstances of the case. 3. The brief facts of this issue are that the assessee owns a Trailer in the name of the firm Prestige Trading Company together with one Crane. The assessee runs the business in two names which are Prestige Trading Company and Singh Trading Company. The Ld. AO observed that the assessee paid transportation charge of Rs. 39,12,411/- which is actually the payment made to sub-contractor against his income earned from contract entered into with various parties. He also observed that the assessee received incom....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....hat unless the department brings into record any evidence that the expenditure was incurred against a verbal or written contract between the assessee and the contractor, the assessee cannot be fastened with the liability to deduct tax at source. Accordingly, he deleted the disallowance made by the Ld. AO. 4. Aggrieved, the revenue is in appeal before us on the following ground: "1. That the Ld. C.I.T.(A) has erred both in the question of Law as well as in fact by deleting the disallowance u/s 40(a)(ia) of Rs. 39,12,411/-, on account of Prestige trading Co., on the premise that in the instant case "Transportation Charges" included only expenses like fuel expenses, tyre expenses, trip expenses, Drivers Salary etc., which did not a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... 144 of the Act. He further argued that the Ld. AO had made disallowance u/s. 40(a)(ia) of the Act in the instant case. He argued that in order to make disallowance u/s. 40(a)(ia) of the Act, the Ld. AO should be fully satisfied with reference to the books of account that certain payments were indeed made beyond Rs. 20,000/- warranting deducting of tax at source towards hire charges in terms of section 194C of the Act. Admittedly, no books of account were produced before the AO by the assessee and in such an event the Ld. AO ought to have only resorted to estimated disallowance of "Transportation Charges" but could not make any disallowance u/s. 40(a)(ia) of the Act without carrying out the specific duty cast on him by bringing materials on....