AI Drafter 
TaxTMI 
TaxTMI 
2020 (12) TMI 1144
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.... in so far is prejudicial to the interests of the appellant is bad and erroneous in law and against the facts and circumstances of the case. 2. That the learned Commissioner of Income-Tax (Appeals) erred in law and on facts in confirming the disallowance of Rs. 56,19,628/- u/s. 40(a)(ia) of the Act for non-deduction of tax at source u/s. 194C of the Act on the transportation charges paid during the year. 3. That the learned Commissioner of Income-tax (Appeals) erred in law and on facts in confirming the disallowance on the ground that the appellant did not produce the declaration from the transport contractors even though the provisions of the Act does not require the appellant to get such declaration for the period prior ....
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.... before or at the time of hearing this appeal." Brief facts of the case are as under: 2. Assessee is an individual carrying business of Agarbatti and other trading goods. For year under consideration assessee filed its return of income on 12/10/2013 declaring total income of Rs. 20, 79, 920/-. Subsequently statutory notice under section 143 (2) was issued and assessment was completed by determining total income of Rs. 37, 09, 824/-. Notice under section 263 of the act was issued subsequently to assessee and Ld.AO was directed to verify; * Whether a sum of Rs. 57,61,508/- was actually paid to the owners of the vehicle or sub contractor's; and * Whether provisions of section 194C and (vii) were fulfilled. 3. Purs....
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....ters were owning not more than ten goods carriages and earning their income only from the same. In view of above the disallowance made by the AO for failure of the appellant to deduct tax at source is upheld as the conditions laid down in Section 194C(6) of the Act itself are not satisfied. Considering above the grounds of appeal 3 and 4 of the appellant are dismissed and grounds of appeal 2 and 5 are partly allowed. 4.11 There is another aspect of the issue and that is the compliance of the provisions of Section 194C(7), which is an integral part of the beneficiary provision of Section 194G(6) of the Act. As per the same the person responsible for paying to transporter is required to report the particulars of payment made to trans....
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....r and can be applied separately. In support of the he placed reliance on decision of Hon'ble Kolkata Tribunal in case of Soma Rani Ghosh vs DCIT reported in (2016) 74 Taxmann.com 90. He submitted that the view taken by Hon'ble Kolkata Tribunal in case of Soma Rani Ghosh vs DCIT (supra) has been followed by Hon'ble Jaipore Tribunal in case of Mangalam Housing and Developers vs ACIT in ITA No.324/JP/2018 by order dated 04/06/2018. 12. On the contrary, Ld.Sr.DR submitted that, provisions of section 194C(6) and 194C(7) are interdependent and given the fact that no TDS was deducted, disallowance made by Ld.AO under section 40(a)(ia) of the Act is correct. Ld.Sr.DR has filed written submission on 4/12/2020. 13. We have perused submissions a....
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.... sum is paid or credited for carrying out any work mentioned in sub-clause (e) of clause (iv) of the Explanation, tax shall be deducted at source- (i) on the invoice value excluding the value of material, if such value is mentioned separately in the invoice; or (ii) on the whole of the invoice value, if the value of material is not mentioned separately in the invoice (4) No individual or Hindu undivided family shall be liable to deduct income-tax on the sum credited or paid to the account of the contractor where such sum is credited or paid exclusively for personal purposes of such individual or any member of Hindu undivided family. (5) No deduction shall be made from the amount of any sum credited or pai....
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.... of playing, hiring or leasing goods carriages, and furnishes his permanent account number, to a person paying or crediting such sum." 16. Present year under consideration before us AE's assessment year 2013-14 and therefore unamended provision of clause 6 is to be considered. On perusal of unamended clause 6, it is clear that, if the sub contractor's have supplied their PAN to assessee in respect of hiring/leasing/of vehicles during the course of its business, then assessee shall not deduct any TDS. Thus, as per Clause 6, as it stood prior to amendment, applicable for the year under consideration, in order to get immunity from obligations of TDS, filing of PAN of payee transporter is sufficient, and no confirmation letter as required by....