2015 (1) TMI 1519

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....t in law in not affirming the order of the Assessing Officer and holding that the assessee paid of Rs.9,63,50,692/- under the head freight charges to truck owners/drivers on execution of carriage contract works, which are liable to deduct TDS as per Explanation III to section 194C (2) of the I.T. Act, 1961 at the time of payment made/credited but the assessee did not deduct any tax on payment of freight charges as the assessee is an individual and whose gross turnover exceeds monetary limits specified under clause (a) or (b) of section 44AB of the I.T. Act, 1961 during the financial year immediately preceding the financial year. " 2. Effective ground of appeal deals with disallowance, amounting to Rs. 9,63,50,692/-, made u/s.40(a)(ia)of ....

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....he transport activity from one place to another and loading and unloading activities were undertaken directly by the principal i.e. FCI, that the findings of the AO on engaging Sub-contractor in transportation activity was misconceived. The FAA found that the Clause - V of the terms and conditions governing contract of the Transport Contract, as entered in to by the assessee with the principal, read as under: "The contractor shall not sublet, transfer a assign the contract or any part thereof without the previous written approval of the Corporation. In the event of the contractors contravening this condition, the Corporation shall be entitled to place the contract elsewhere on the contractor's account and at their risk and t....

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....r.). 5. We find that the assessee had received Rs. 10,45,73,604/- from FCI on the execution of carriage contract and paid freight expenses of Rs. 9,63,50,692/-for carrying out the above contract, that Explanation III to Section 194C provided that any payment for carrying out work of carriage of goods by any mode of transport other than by railway in pursuance of a contract between contractor and those specified in (a) to (j) of sub-section (1) of section 194C are liable for TDS at the time of payment to the contractor, that under sub-section (2)of Section 194C payments made by a contractor to sub-contractor in pursuance of a contract is liable for TDS from each payments, that the assessee was engaged by FCI in carriage of goods in pursua....