AI Drafter 
TaxTMI 
TaxTMI 
2011 (9) TMI 1116
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.... "1. That the Worthy Commissioner of Income Tax-III, Ludhiana has erred in assuming jurisdiction u/s 263 of the Income Tax Act and observing that the assessment is erroneous and prejudicial to the interest of revenue. 2. That the original assessment had been framed after due application of mind by the concerned Assessing Officer and the CIT-III has failed to appreciate the detailed submissions made both on merits and otherwise during the course of proceedings before him. 3. Notwithstanding the above said ground of appeal, the CIT-III has erred in holding that the assessee was liable to deduct TDS on the freight charges paid to the tune of Rs. 9,45,84,074/- and also erred in holding that the since the TDS having no....
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....caused on account of the under mentioned issues : a) Non-deduction of TDS out of freight charges paid to various truck owners and consequently application of provisions of Section 40(a)(ia) of the Act. b) In view of the provisions of Section 199 of the Income-tax Act, the credit for TDS is to be restricted to the payments credited to the Profit & Loss Account as against gross receipts reflected in the TDS certificates. c) Verification of applicability of Section 40A(3) to cash payments made to individual truck owners. 5. The CIT, in view of the facts of the case and the legal position, invoking the provisions of Section 263 of the Act, decided the issues as under : i) Since there was failure to d....
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....applicability of provisions of Section 40A(3) of the Act and the only grievance was against the enhancement ordered passed by the CIT. Ld. AR submitted that the issue in question is directly covered by the ratio laid down by the Hon'ble Punjab & Haryana High Court in the case of CIT V Truck Operators' Union (date of decision : 23.03.2011) and hence there was no merit in the enhancement of income made by the CIT. 8. Ld. DR for the Revenue placed reliance on the order of the CIT. 9. We have heard the rival contentions and perused the record. The assessee Union is 'AOP' constituted of truck operators. The said AOP was constituted mainly for taking contracts from various government agencies/companies for the transportation as it was d....
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....cted or deposited before the due dates, the assessee was held to have defaulted and in view of the provisions of Section 40 (a)(ia) of the Act, the assessee was held not entitled for deduction of the aforesaid sum of freight charges paid totaling to Rs. 9.45 Cr. The income of the assessee was enhanced by Rs. 9.45 Cr. by the CIT vide its order passed u/s 263 of the Act holding the order of the AO to be both erroneous and prejudicial to the interests of the revenue. 10. The Hon'ble Punjab & Haryana High Court in CIT V Truck Operators' Union in ITA No. 865 of 2010 vide date of decision 23.3.2011 on similar issue raised on payments to truck operators, members of truck union and the consequent disallowance u/s 40(a)(ia) of the Act had hel....
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....supra) the SLP filed against the said judgement was dismissed by the Hon'ble Supreme Court on 17.01.2011 being SLP(Civil) 2011-CC- 259/2011 in CIT, Shimla v M/s Ambuja Darla Kashlog Mangu Transport Co-operative Society. 12. Now coming to the facts of the present case, as the issue stands covered by the decision of the jurisdictional High Court and also by the Hon'ble Himachal Pradesh High Court, we find no merit in the order of CIT passed u/s 263 on the issue of deduction of freight charges paid by the assessee Union to the truck operators/owners. Following the abovesaid ratio laid down in various judgements, we hold that the provisions of Section 194C(2) are not attracted in respect of the payments made by the assessee Union to ....