TaxTMI 
TaxTMI 
2025 (3) TMI 1364
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....- contract payments to transport operators and so the disallowance u/s. 40(a)(ia) was untenable in law. 4. The NFAC CIT(A) further failed to appreciate that the assessee had duly complied with the provisions of sec.194C(7) and uploaded the requisite particulars in Form 26Q and therefore the alleged non- furnishing of datils of transporters is merely an allegation on surmises and cannot be the basis for the disallowance of the amount. 5. The NFAC CIT(A) further failed to appreciate that Form 26Q contains all the particulars to be stated regarding the number of vehicles operated by the transport operator and hence there is no basis in the assessing officer stating that the transporter details are not furnished and not available in order to apply the provision of sec.194C(6). 6. The NFAC CIT(A) further failed to appreciate that the details furnished by the transport operators are imported into Form 26Q and filed by assessee and there is no failure on the part of assessee to furnish any particulars of the transporters and therefore the disallowance u/s. 40(a((ia) of the sub-contract payments is arbitrary, unjust and unsustainable in law. 7. The NFAC ....
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....ll the payment were more that Rs. 1,00,000/- Also the assessee has not produced the declaration form of parties as required to file mandatorily before the deductor while paying or crediting such sum as per Section 194C (6) of the IT Act 1961. Section 194C(6) says "No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contract or during the course of business of plying, hiring or leasing goods carriages, 4[where such contractor owns ten or less goods carriages at any time during the previous year and furnishes a declaration to that effect along with] his permanent account number, to the person paying or crediting such sum." Therefore, the total payment of Rs. 7,01,94,373/- made to 12 parties as Transport charges subtruck is disallowed u/s. 40(a)(ia) r.w.s 194C of the IT Act 1961 and the 30% of sum payable Rs. 2,10,58,312/- is disallowed and added as business income, since the assessee has failed to produce the declaration form of parties as required to file mandatorily u/s. 194C (6) of the IT Act 1961, before the deductor while paying or crediting such sum. Therefore,....
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....efore, the addition made by the AO is hereby upheld. Hence, the Grounds of appeal is dismissed". Aggrieved by the order of the ld.CIT(A), NFAC, Delhi, the assessee is before us. 3.6 The Ld.AR for the assessee stated that the ld.CIT(A) failed to appreciate fact that u/s.194C(6) of the Act there is no mandate on the assessee to deduct TDS on sub-contract payments made towards transport charges and hence the disallowance u/s.40(a)(ia) of the Act was untenable in law. Further the Ld.AR stated that the assessee has complied with the provisions of section 194C(7) and uploaded the requisite particulars in Form 26Q and therefore, non-furnishing of the entire details of transporters before the AO/Ld.CIT(A) is merely an allegation on surmises and cannot be the basis for the disallowance of the transport charges u/s.40(a)(ia) of the Act. The Ld.AR to buttress his argument filed the paper book consisting of 151 pages having the following details. Index Sl. No Particulars Page 1. Return of income & statement of income 1-17 2. Short note on the issue in appeal 18-20 3. Consolidated chart on the payments to Sub-contractors 21 4. Statement of TDS ....
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....10 Therefore the Ld.AR stated that there is a compliance by the assessee in respect of TDS u/s.194C of the Act and hence the impugned addition made by the AO which was confirmed by the Ld.CIT(A) is not justified and hence prayed for deleting the same. 4. Per contra, the Ld.DR relied on the orders of the Ld.CIT(A) and prayed for conforming the disallowance. 5. We have heard the rival contentions, perused the material available on records and gone through the orders of lower authorities. It is admitted fact that the assessee has filed the return of income within the prescribed due date along with the audit report on 01.11.2017. In the assessment proceedings the assessee has filed the details of expenditure which are liable for TDS and corresponding TDS made by the assessee before the AO. The assessee also furnished payments made to Transport sub-contractors to the tune of Rs. 7,01,94,373/- and stated that the TDS has not been deducted for these 12 sub-contractors, since these sub-contractors owned less than 10 'goods carriages' and have furnished the declaration to that effect along with their PAN. However, the AO was not convinced since the assessee has failed to produce the d....