TaxTMI 
TaxTMI 
2017 (10) TMI 1342
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.... following question of law:- "Whether the Tribunal was legally justified in deleting of Rs. 80,71,910/- made on account of non deduction of TDS u/s.194C(2), 3(i) specifically when freight payments to the subcontractors above Rs. 50,000/- was to be disallowed as per Section 40(a)(ia)?" 3. Counsel for the appellant Ms Parinitoo Jain has taken us to the order passed by AO wherein it has been observed as under:- " Income From Own Trucks: During the assessment proceedings details furnished revealed that assessee I is owner of 4 trucks which have been utilized for transport by himself in his proprietary concern M/s Shree Krishan Freight Carrier as well as other transport operators namely M/s Pawan Roadlines, Gandhi Dham, Shre....
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....he concerrned parties has deduced TDS from the truck driver for which credit has been allowed to the assessee Shri Ram Niwas Yadav as per TDS certificate issued in his favour. Shri Lekh Raj Sharma in his statement has stated that the amount of TDS has not been refunded to hi. This position is also applicable in other sub-contractors. b) The above facts regarding non refund of TDS are also verifiable with the hand written note book of the witness in respect of his truck No. RJ-32-GA-676 and RJ-32-GA-946. On these papers there is specific mention of TDS deduced by the concerned parties at the time of advance to the truck driver and receipt has been taken of the full advance before making TDS. The assessee has claimed TDS of Rs. 7,20,....
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....me tax act. In the instant case, the payer (assessee) has obtained 15-I from the all 50 parties and such forms were submitted during the assessment proceedings by the and were not disputed by the assessing officer during the assessment proceedings. The payment to the subcontractor had not been doubted by the AO. Hence, as per provision of this section assessee is not liable to decut TDS on the payments of freight of Rs. 8071910/-. Since, there is no liability to deduct TDS u/s 194C(2) of the income tax act, than disallowance u/s 40(a)(ia) can not be made. Hence, the action of the AO is totally unlawful and unjustified. So far as non filing of form No. 15J with the competent authority within the stipulated period is concerned, it is a proced....
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....f TDS u/s 194C(2) of the income tax act by the assessing officer is fully unlawful and unjustified and may kindly be deleted. 3.3 I have considered the facts of the case and submission of the ld. AR carefully. I have also gone through the case laws relied upon by ld. From the fact of the case, the submissions given by the assessee and judicial decisions relied upon in this case, it is seen that AO's action for disallowance of Rs. 80,71,910/- u/s 40(a)(ia) totally unlawful and unjustified as the assessee not liable to deduct TDS u/s 194C(2) of the income tax act as (I) First year of tax audit u/s 44AB of the income tax act (Previous year assessee was not liable to tax audit because of permissible limit of gross receipts Rs. 40 Lacs)....
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....isallowance of Rs. 80,71,910/- under provisions of Section 40(a) (ia) of the Act. Assessee was not liable to deduct TDS under the provisions of Section 194C(2) of the Income Tax Act as: I. First year of tax audit u/s. 44AB of the Act (previous year assessee was not liable to tax audit because of permissible limit of gross receipt of Rs. 40 lacs), Ii. Discharging of liability for obtaining Form No. 151 before making payment to Sub-Contractor against freight to 50 parties in compliance of provisions of Section 194C(2) for non deduction of TDS. The delay in submission of form No. 15J to the competent authority was procedural formality, iii. There is no material, oral or written agreement between assessee in recipient....