TaxTMI 
TaxTMI 
2022 (11) TMI 1021
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....aid rent of Rs.3,56,782/- to one Shri Basanta Kumar Palei. It was the submission that TDS had not been made u/s.194-I of the Act. It was the submission that the Assessing Officer in the assessment order in para 5, unfortunately, made a typographical error in mentioning Section 194C of the Act. It was the submission that the ld CIT(A) on the ground that the Assessing Officer had mentioned section 194C in place of 194-I, had deleted the addition in page 2 para 4 of his order. It was the submission that the ld CIT(A) was very much aware that provisions of section 194-I was to be applied. It was the submission that the powers of the ld CIT(A) is co-terminus with that of the Assessing Officer and he had the duty to correct the typographical error. It was the submission that as no TDS has been made by the assessee on the rent paid to Shri B.K.Palei, the disallowance made by the AO and deleted by the ld CIT(A) was liable to be restored. 4. In reply, ld AR submitted that wrong mentioning of section is a wrong application of jurisdiction. The wrong application of jurisdiction cannot be corrected by the ld CIT(A). It was the submission that as the Assessing Officer had applied wrong juris....
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....47(SC) in paras 15 to 15.2 has held as follows: "15. In order to maintain that the appellant was under no obligation to make any deduction of tax at source, it has been argued that there was no oral or written contract of the appellant with the truck operators/owners, whose vehicles were engaged to execute the work of transportation of the goods only on freelance and need basis. The submission has been that the question of TDS under Section 194C(2) would have arisen only if the payment was made to a "sub-contractor" and that too, in pursuance of a contract for the purpose of "carrying whole or any part of work undertaken by the contractor". In our view, the submissions so made remain entirely baseless. 15.1. The nature of contract entered into by the appellant with the consignor company makes it clear that the appellant was to transport the goods (cement) of the consignor company; and in order to execute this contract, the appellant hired the transport vehicles, namely, the trucks from different operators/owners. The appellant received freight charges from the consignor company, who indeed deducted tax at source while making such payment to the appellant. Thereaft....
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....f the Revenue's appeal, which are the ledger account of various transporters. It was the submission that all the transporters have raised bills on the assessee and the payments have also been made by cheques and cash. It was the submission that the fact that bills have been raised shows the existence of the contract either oral or written. The bills are raised only after execution of the contract. The payments of the bills also support the execution of the contract. The payments made in the absence of any bill could lead to a situation of non-availability of a contract but then it would be on the shoulder of the assessee to prove the reasons for such payments failing which it would be a gratuitous payment which is also disallowable as not falling within the provisions of section 37(1) of the Act. It was the submission that as the bills have been raised and the payments have been made clearly shows that the contract exists and the assessee having not deducted TDS u/s.194C and having failed to produce the PAN details, the ld CIT(A) order deleting the disallowance is liable to reversed and that of the AO restored.] 8. Ld CIT DR has filed written submission as follows: "At ....
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....owners answered to the description of "sub-contractor" for carrying out the whole or part of the work undertaken by the contractor (i.e., the appellant) for the purpose of Section 194C(2) of the Act. 15.2. The suggestions on behalf of the appellant that the said truck operators/owners were not bound to supply the trucks as per the need of the appellant nor the freight payable to them was predetermined, in our view, carry no meaning at all. Needless to observe that if a particular truck was not engaged, there existed no contract but, when any truck got engaged for the purpose of execution of the work undertaken by the appellant and freight charges were payable to its operator/owner upon execution of the work, i.e., transportation of the goods, all the essentials of making of a contract existed; and, as aforesaid, the said truck operator/owner became a sub-contractor for the purpose of the work in question. The AO, CIT(A) and the ITAT have concurrently decided this issue against the appellant with reference to the facts of the case, particularly after appreciating the nature of contract of the appellant with the consignor company as also the nature of dealing of the appellan....
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....ssing Officer dated 20th December, 2011 (Annexure 1 to the memo of this tax appeal), it appears that repeatedly huge amount has been paid in cash. This is an evidence of the oral agreement between the respondent-assessee and sub contractor. Every time there is no need of written agreement. It is a prime duty of the respondent authority to look at the transactions carefully when consistently huge cash is being paid by the assessee, in breach of Section 40(A)(3) of the Income Tax Act and without deduction of tax at source. This is not the only evidence in this case. The respondent-assessee looking to the books of accounts have made the payment towards labour charges, repair and maintenance as well as towards the loading and unloading. Thus, the assessee is not a broker at all, but, is more than a broker. Broker will never pay the repair and maintenance as happened in this case. Payments have been made for spare parts, tyres and tubes, batteries, for engine, for motors auto body, for leaf spring etc. during the financial year 2008-09. Looking to this aspect of the matter, no error was committed by the Income Tax Commissioner, while dismissing the appeal preferred by the respo....
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....ptance of any promise is made in words while implied contract is one where such proposal or acceptance is made otherwise than in words. Even if there is no express contract, a contract may still exist by implication, i.e. contract consisting of obligations arising from the mutual agreement and intent to promise, which have not been expressed in words. An implied contract envisaged by section 9 of the Indian Contract Act, 1872 can be inferred from the facts and circumstances that indicate a mutual intention to contract. Circumstances may exist which, according to the ordinary course and common understanding, demonstrate such an intent that is sufficient to support the finding of an implied contract. Chapter V of the Indian Contract Act, 1872 treats certain relations resembling those created by a contract as contracts enforceable in law. The Indian Contract Act, 1872 thus envisages four types of contracts, namely (1) contracts made in writing (2) contracts made orally (3) contracts by implication or implied contracts and (4) quasi contracts. Thus, the contracts envisages in section 194C are not limited to written contracts and all payments made in pursuance of written, oral,....
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....rried out. (3) The work is to be carried through the contractor. In the present case, transportation has been done through transport agencies, who have raised bills and also through other truck drivers, who have raised bills, which clearly show that those truck drivers and transport agencies are contractor. (4) The consideration for the contract should exceed minimum amount fixed by section 194C. In the present case, it far exceeds the prescribed amount. (5) That the payment is made to the contractor for the work carried out by him. In the present case, the bills have been raised for such contracts for the work done by them, the payments have been made by the assessee against such bills, which is clearly evidenced by ledgers. Thus, applying the ratio laid down by the Hon'ble Supreme Court in the case of Birla Cement Works (supra), clearly, there is a contract between the assessee with transport agencies or truck drivers and the same is hit by provisions of section 194C. In the present case, the assessee has not produced PAN details in respect of the contractors to an extent of Rs.28.74 crores. In this regard, we are of the view that the interest of justice would be served if the as....