TaxTMI 
TaxTMI 
2018 (10) TMI 857
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.... of goods. (ii) That the payment made are in respect of hire of transport" 3. Brief facts of the case limited to the issue raised before us are that the assessee is an individual engaged in the business of transport booking. Assessment u/s 143(3) of the Act was completed on 23.12.2011 assessing income of Rs. 11,63,710/-. Subsequently Ld. CIT-II, Indore under the powers of Section 263 of Act passed order on 3.6.2013 directing the Assessing Officer to examine the applicability of the provisions of 194C as well as 194I of the Act on the payments to truck operators. Ld. Assessing Officer complying to the order of Ld.CIT(A) initiated the assessment proceedings and completed it on 26.3.2014 u/s 143(3) r.w..r.t Section 263 of the Act after making disallowance u/s 40(a)(ia) of the Act at Rs. 22,19,660/- for non deduction of tax at source u/s 194C of the Act. Ld. Assessing Officer observed that the assessee was not deducting tax at source u/s 194C of the Act on account of second proviso to Section 194(3) of the Act if the truck owner submits Form 15I (Rule 29d(1) of IT rules). Truck owners can give the declaration on Form 15I if they do not own more than two trucks. However in t....
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....98 (S.C) (iii) CIT Vs Valibhai Khanbhai Mankad 216 Taxman 18 (Guj.) (iv) CIT Vs Shri Marikamba Transport Co. 379 ITR 129 (Kar.) (v) CIT Vs United Rice Land Ltd 322 ITR 0594 (P&H) (vi) CIT Vs Poompuhar Shipping Corporation Ltd 282 ITR 0003 (Mad) (vii) CIT-II, Indore passed u/s 263 7. On the other hand Ld. Departmental Representative supported the order of lower authorities. 8. We have heard rival contentions and perused the records placed before us. The sole issue raised by the assessee is that both the lower authorities erred in confirming the additions/disallowance u/s 40(a)(ia) of the Act at Rs. 22,19,660/- on account of non deduction of tax at source u/s 194C of the Act. We find that the impugned disallowance was made for the reason that the assessee who is engaged in the business of transport booking, did not deduct tax at source u/s 194C of the Act in those cases where truck owners submitted Form 15I (As per Rule 29D(ii) of the Act). During the year under appeal one of the truck owner Shri Kishorilal Birla received payment for plying of truck at Rs. 13,35,253/-, Rs. 3,86,301/- and Rs. 4,98,016/- on three separate dates. Shri K....
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....l) or subsection (2) from - (i) the amount of any sum credited or paid or likely to be credited or paid to the account of, or to, the contractor or sub-contractor, if such sum does not exceed twenty thousand rupees: Provided that where the aggregate of the amounts of such sums credited or paid or likely to be credited or paid during the financial year exceeds fifty thousand rupees, the person responsible for paying such sums referred to in sub-section (1) or, as the case may be, sub-section (2) shall be liable to deduct income-tax under this section: Provided further that no deduction ball b made under sub-section (2) from the amount of any sum credited or paid or likely to be credited or paid during the previous year to the account of the sub-contractor during the course. of business of plying, hiring or leasing goods carriages, on production of a declaration to the person concerned paying or crediting such sum, in the prescribed form and verified in the prescribed manner and within such time as may be prescribed, if such sub-contractor is an individual who has not owned more than two goods carriages at any time during the previous year: Provided also th....
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.... the same bas not been paid on or before the due date. Thus for application of section 40(a)(ia) of the Act, the foremost requirement would be of tax deduction at source. 6) Section 194C, as already noticed, makes provision where for certain payments, liability of the payee to deduct tax at source arises. Therefore, if there is any breach of such requirement, question of applicability of section 40(a)(ia) would arise. Despite such circumstances existing, sub-section (3) makes exclusion in cases where such liability would not arise. We are concerned with the further . proviso to sub-section (3), which provides that no deduction under sub-section (2) shall be made from the amount of any sum credited or paid or likely to be credited or paid to the sub-contractor during the course of business of plying, hiring or leasing goods carriages, on production of a declaration to the person concerned paying or crediting such sum in the prescribed form and verified it in the prescribed manner within the time as may be prescribed, if such sub-contractor is an individual who has not owned more than two goods carriages at any timeE during the previous year. 7) The exclusion provid....
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....irement of deduction of tax at source and such requirement is either not fulfilled or having deducted tax at source is not deposited within prescribed time. 11) With respect to the Tribunal's earlier judgment in case of M/s. shree Pramukh Transport Co. Ltd., neither side could throw any light whether the Revenue had carried the same in appeal or not. However, we have examined the question independently and come to our own conclusion recorded herein above. 12} In the result, tax appeal is dismissed." 11. Perusal of the above judgments clearly states that once the condition of further proviso of Section 194C(3) of the Act are satisfied, the liability of the payee to deduct tax at source would cease. Examining the facts of the instant appeal we find that the assessee received Form 15I from the truck owner namely Shri Kishorilal Birla on various dates in which detail of only one truck was mentioned. The conditions provided in further proviso of 194C(3) of the Act was duly complied as Form 15I was received by the assessee from the truck owner who was stated to be a owner of not more than two goods carriers. Due to this reason the assessee did not deduct tax at s....