TaxTMI 
TaxTMI 
2016 (11) TMI 745
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....rtner has fallen sick and therefore, due to ill-health, the memo could not be signed and appeal could not be submitted. Considering the request, we hereby condone the delay of thirteen days in filing the appeal memo. 2. Briefly stated, assessee is a lorry transport contractor and in the course of doing business, it hires lorries for transportation of goods, mostly to on the spot availability of trucks. Sometimes, brokers are also engaged by charging commission from truck drivers or owners. Assessee has paid totally an amount of Rs. 71,92,213/- towards lorry hire charges. On the reason that assessee has not deducted tax on the above amounts and the provisions of Section 40(a)(ia) are applicable, Assessing Officer (AO) issued show cause no....
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....icable in this case as the facts of the case differ. As per the books of accounts produced the payments made towards hire charges at Rs. 50,000 - or more to each lorry owner/driver during the accounting year relevant to the assessment year 2006-07 without deduction of tax are Rs. 4,38,790/-. The same is disallowed and added to the income returned". 2.1. Thus, out of Rs. 71,92,213/- debited to P&L A/c, AO disallowed an amount of Rs. 4,38,790/- stated to be paid towards hire charges at Rs. 50,000/- or more to each lorry owner/driver. 3. Before the Ld. CIT(A), the same contentions were reiterated but Ld. CIT(A) also agreed with assessee by stating as under: "5.2 I have seen carefully the facts and evidence. In the current case, the....
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....de u/s. 40(a)(ia) of the Act, as there is no contract between assessee and lorry owners/drivers. In fact, there may be an oral contract when assessee undertakes to transport the goods. What assessee receives as 'transportation charges' are entirely different from what assessee pays to lorry owner or driver which is not a 'transportation charge' but a lorry 'hire charge'. there cannot be contract, even orally, as considered by the Ld. CIT(A) for this sort of work. The same issue was considered by the Co-ordinate Bench at Visakhapatnam in the case of Mythri Transport Corporation Vs. ACIT [124 ITD 40], which was relied on by assessee before the Ld. CIT(A) as well, but Ld. CIT(A) seems to have not considered the same. 4.1. In the above refer....
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....acts and defaults committed by it and/or its employees. [Para 8.4] It was not established by the revenue that other lorry owners, from whom the vehicles were hired, had also been fastened with any of the abovesaid liabilities. In a sub-contract, a prudent contractor would include all the liability clauses in the agreement entered into by him with the sub-contractor. The assessee had also claimed before the tax authorities that the responsibility in the whole process lay with it only. Though the passing of liability was not the only criteria to decide about the existence of a sub-contract, yet this contention of the assessee, read with the liability clauses of the work order, supported its submission that the individual vehicle owners wer....