TaxTMI 
TaxTMI 
2018 (10) TMI 1494
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....ing one or more truck each. It enters into contracts for transportation of goods with several agencies, primarily government and semi-government agencies, viz. Punsup, Markfed, FCI, Punjab State Warehousing Corporation, etc. It is admittedly formed to provide optimum gain for its members, the truck operators, by avoiding internal competition between them, as well as securing a better price through collective bargaining. The contract receipt is, as claimed, reimbursed to the individual truck owners, retaining what is called 'bilty charges' at Rs. 10 per bilty (goods receipt note - GRN). In addition, it claims to receive a monthly contribution from its members, fixed by resolution, stated to be at Rs. 150/- per month for the relevant year. The same enables the Union to meet the maintenance cost of its' office, including salary to its' employees. It furnished its' return of income for the relevant year on 22.01.2009 at an income of Rs. 5,03,305/-, comprising the following (PB pg. 28): (a) Excess of receipt over expenditure : Rs. 2,83,203/- (#) (b) Interest on income-tax refund : Rs. 55,520/- (c) Sales of scrap : Rs. 1,64,582/- (#) stated to be the excess of contribution from me....
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.... being governed by the principle of mutuality. There is, however, no finding that the same is a surplus out of the contributions from the members. In fact, there could not be any such finding in the absence of the assessee producing its' account books before the Revenue authorities for verification, called for time and again; rather, it admitting (through its' counsel) to be not maintaining any books of account. In fact, a register containing the names of the members as well as the monthly subscription received, including the mode of its' acceptance, evidenced by a receipt, is the minimum, primary record that the association would, or is expected to, maintain. Further, the same would be either held in cash or banked, as are the contract receipts, requiring, at the minimum, a cash book which agrees with the collection (subscription) register. How, then, one may ask, could the admitted surplus be said to be arising out of the monthly contribution from members? The onus to show that its' income is exempt under the Act is on the assessee, and which remains completely undischarged in the present case. Even as, therefore, the assessee's argument is valid in principle, it completely fail....
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....ansal, would argue that if the assessee could show that the entire sum (contract receipt) is paid to its' members as hire charges for transportation, there is no scope for any income or for imputing the same, further submitting that the assessee be allowed an opportunity to show that the entire amount, i.e., inclusive of TDS, is paid over as hire charges. The argument, valid in principle, fails on facts. The assessee has, firstly, already been allowed more than abundant opportunity by the Revenue to exhibit its' case/claims, and which it has completely failed to. As stated by the ld. CIT(A), a dozen opportunities were provided by the AO alone. It is in fact unfortunate that the representatives (i.e., of either side) did not bring this aspect of the matter to our notice during hearing, which they ought to have so as to extend proper assistance to the Bench for arriving at the correct decision in the given facts and circumstances of the case. If the truckers are paid a fixed rate, as otherwise those of the longer routes may stand to gain, the Union stands to gain for the difference in rates. Why, in any case, would the truckers await the refund of TDS, for being paid the same? Where....
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....ses of shortfall in contract receipt on account of exigencies such as delayed delivery, shortage of goods, etc. which would require settling of claims and counter claims by the Union - all pointing to the assessee retaining a margin, albeit small. Apart from meticulous record, only the TDS refunded could be disbursed, while the refund (to the assessee) of the entire TDS itself has not been shown, as for earlier years, much less its' disbursement, even if later, holding the amount in trust for the truck operators till the same (disbursement) is complete. Again, non-receipt of the entire TDS implies cost, so that the Union would, rather, stand to loose. Why, even for the current year, the assessee, returning an income of Rs. 5.03 lacs, admits a tax liability to some extent, so that it would not be entitled to refund of the entire tax deducted at source. This loss/cost - the assessee having no other regular source of income, would entail appropriation thereof, of which there is again no whisper. The plea (of no retention by the assessee), in fact runs counter to the assessee's own declaration of an excess of income over expenditure (at Rs. 2,83,203/-) per its return of income for the....
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....226 ITR 97 (SC), that there should be dealing or relation with any outside party. Conclusion 4. The income that admittedly stands brought to tax in assessment is that arising to the assessee-AOP out of the contract receipt from different contracteecompanies. The assesee's stand before the Revenue, as before us, is with regard to the estimate of the income from the transportation work being excessive, and which in fact has found substantial acceptance by the ld. CIT(A), reducing the same from 6% to 2%, so that it is only the TDS component that finally enures to the assessee, with the assessee before us claiming even this to be excessive, raising a plea of disbursement of the entire receipt, i.e., including the TDS. The same, unsupported by any material, has yet found part acceptance by us, reducing the profit rate to 1.5%, i.e., as urged before the first appellate authority. The question, therefore, has always, and only rightly so, been one of quantum, and not of the character of the receipt, which would in fact make quantum irrelevant. The receipt arises to the assessee on the basis of transportation work undertaken by it, and which it does through its members, paying them a sum ....