TMI Blog2006 (9) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... there is a demand for the same. Merely because one particular truck was hired on certain occasions, it does not lead to conclusion that all the trips were made continuously under the specific contract. Admittedly, there is no specific contract brought on record. There is another important aspect which is noted from the details furnished before us that different freight is paid in respect of different trips even though the destination was the same i.e., Bangalore. Had there been a single contract, then assessee would not have paid different amounts in respect of different trips. This circumstance shows that different contract existed on different occasions when the trucks were hired. Therefore, in the absence of any material to prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvey was conducted at the premises of the assessee but books of account were not found since, according to the assessee, the books were lying in their branch office in Ankleshwar. Accordingly, the assessee was asked to produce books of account along with other details for which summons under section 131 of the Act was also issued and served on the assessee. In response to the same, some of the books of account and ledgers were produced before the Assessing Officer and requested for time to produce other details. Subsequently, assessee furnished other details called for such as ledger accounts of the parties from whom payments have been received during the year. The assessee also clarified that tax has been deducted by these companies while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Rs. 100/- to Rs. 200/- per trip depending upon the market conditions because we have not entered into any specific contract for any specific period at any specified agreed rate with any of the truck owner/supplier. Further the scrutiny of the seized register will show that the freight rate charged by us to our customers is without any variance while the rates if freight paid by us to various transporters vary each time depending upon the demand and supply conditions. In the absence of any oral/written agreement/understanding, the said truck suppliers are not bound to supply trucks for any specified period or for any specified quantity or any pre-agreed/specified rate, hence each trip is a separate contract and if the transportation cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the Assessing Officer was not satisfied with the explanation of the assessee. He was of the view that Board Circular was not applicable since it lays down that if the goods are transported continuously in pursuance of a contract for a specified period or quantity, each GR will not be a separate contract and all the GRs relating to that period or quantity will be aggregated for the purpose of TDS. According to him, the transaction between the transporters and the assessee firm were carried on throughout the year and merely because the assessee took the stand that the rate of transportation differs for each trip and the same has to be re-negotiated based on the market conditions, the case of the assessee could not be taken out from the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various clauses under sub-section (1) of section 194C. Sub-section (3) provides that no deduction shall be made where the amount to be paid or credited does not exceed Rs. 20,000/-. These provisions have been explained by the Board Circular No. 715 dated 8-8-1995. Question No. 9 and answer thereof, is relevant for this purpose. The same are being reproduced as under : Question 9: In the case of payments to transporters, can each GR be said to be a separate contract, even though payments for several GRs are made under one bill? Answer: Normally, each GR can be said to be a separate contract, if the goods are transported at one time. But if the goods are transported continuously in pursuance of a contract for a specific period or quant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the perusal of the details, we find that one truck bearing No. KA-22-A-8751 was hired five times in the financial year 1998-99 but in different months, for e.g., July, August, November, December and March. The gap is too large and it cannot be said that the transportation was made continuously under any specific contract. We also find that Truck No. 6304 was hired on many occasions in the financial year 1998-99. The frequency seems to be twice a month. It is a ground reality that where the assessee engaged in the transportation business does not own any truck, then it has to hire the truck from the market every time as and when there is a demand for the same. Merely because one particular truck was hired on certain occasions, it does not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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