TaxTMI 
TaxTMI 
2013 (12) TMI 1599
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....in nature, hence, require no adjudication. 3. In Ground Nos.(b) to (d), department has disputed the action of the CIT(A) in deleting the addition of Rs. 4,75,51,774/- on the ground that assessee has failed to comply with the second proviso to sub-section (3) of section 194C of the Act. 4. Briefly stated the facts relating to this issue are that the assessee is a partnership firm engaged in the business of transport commission. In the impugned assessment year, the assessee filed its return of income declaring total income of Rs. 7,86,047/-. During the scrutiny assessment proceedings, the AO on examination of profit and loss account, noted that the assessee debited an amount of Rs. 5,05,48,611/- being freight charges paid. On being quer....
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....ulatively as enumerated in the proviso under the said sub-section. He thus concluded that the assessee should not only obtain form No.15-I from the sub-contractors but should also submit Form No.15-J to the Commissioner of Income tax Act within the specified time and if both the conditions are satisfied then only the assessee is to be treated as the assessee in default. Though the assessee tried to explain that once the transporter furnished declaration in Form No.15-I, then there is no requirement of deduction of tax u/s.40(a)(ia) of the Act and the delay in filing the Form No.15-J before the CIT would not entail the disallowance u/s.40(a)(ia) of the Act and in support of such contention, assessee relied on certain decisions of the ITAT. T....
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....fter the owners of goods satisfied that the goods reached their destination safely and upon receiving the lorry receipts to that extent, pays the agreed price to the transport contractor, who thereupon deducts his charges and pays the remaining amount to lorry owners. Thus, there is no contract between the transport contractor/ owner of goods with owners of vehicles. While this is how a transport contractor operates, the issue before the undersigned is that the lorry owners gave him Forms No 15-I, indicating that including the lorry receipts, the total income accruing to them for the relevant year ending is below taxable limits and as such tax need not be deducted while paying lorry hire charges to them. Upon receipt of such Forms, the appe....
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....a)(ia) was justified as the provisions contained under section 194C(3)(i) r.w. Rule 29D are mandatory in nature. Whereas, it is the contention of the assessee that the issue has not only been settled in favour of the assessee by the decisions of the different benches of the Tribunal but different High Courts have decided the issue in favour of the assessee. In this context, ld A.R. relied upon the decision dated 5.7.2012 of the Hon'ble Calcutta High Court in the case of Rajesh Kumar Garg in ITAT 95 of 2012 Ga 1369 of 2012. Ld A.R. also relied upon the decision of the coordinate bench of this Tribunal in the case of Valibhai Khanbhai Mankad vs DCIT (ITA No.2228/Viz/2009). It is not disputed by the department that the transporters, who had pr....
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.... technical without affecting in substance the deductibility or non-deductibility of tax on payments made by the assessee to the sub-contractors. Therefore, in our considered view non-compliance of third proviso becomes merely a technical default, which even if, remained non-complied would not affect the operation of section 40(a)(ia)." 7 Similarly, the Hon'ble Calcutta High Court in the case of Rajesh Kumar Garg(supra) has approved the aforesaid decision of the Ahmedabad ITAT. In this view of the matter, we do not find any reason to interfere with the order of ld CIT(A) in deleting the addition of Rs. 4,75,51,774/- made by the AO. Hence, Ground No.(b) to (d) raised by the revenue are dismissed. 8. The next issue taken by the departmen....
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....ore, following the decision of ITAT Visakhapatnam Bench in the case of Mythri Transport Corporation vs ACIT, 124 ITD 40(Vis) directed the AO to delete the addition as the payments made by the assessee to lorry owners is not towards any sub-contract. 11. We have considered the submissions of the parties in the context of materials available on record. On a perusal of the order of the CIT(A), it is quite evident that on examining the nature of payment, the CIT(A) has given a categorical finding that the payments made by the assessee to the lorry owners is not in the nature of sub-contract. The assessment order is also completely silent on this aspect. Neither the AO has brought any material on record to show the existence of sub-contract b....