TMI Blog2013 (5) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... & C.I.T (TDS) vs. United Rice Land Ltd. (2008 (5) TMI 142 - PUNJAB AND HARYANA HIGH COURT) wherein held that there was neither any oral or written agreement between the assessee or the transporters for carriage of goods nor has it been proved that any freight charges were paid to them in pursuance of a contract for a specified period. The assessee was not required to deduct tax u/s. 194C from the payments made to the transporters. Also in this case loading and unloading has been done by the persons other than the mule owners who have only carried the goods between the two points and have not loaded and unloaded the same themselves in this regard referring to decision of Bombay Goods Transport Association vs. CBDT (1994 (7) TMI 65 - BOMB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed the expenditure by invoking the provisions of sec. 40(a)(ia). iii) Ld. Commissioner of Income Tax (A) has erred in relying upon the case laws which have been rendered vis-a-vis the law as it stood before the insertion of Expl.III to sec. 194C w.e.f. 1.7.1995 and which cannot have any bearing on the present case which relates to post amendment period. iv) Ld. Commissioner of Income Tax (A) has also erred in law and on facts in not appreciating the fact that the other payments made by the assessee were also rightly disallowed by the Assessing Officer u/s. 40(a)(ia) as all such payments were contractual payments and by virtue of provisions of sec. 194C, the assessee was liable to deduct tax at source on such payments which he faile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iage' shall have the meaning assigned to it in the Explanation to Sec. 44AE(7) of the Act. 4.1 Ld. Commissioner of Income Tax (A) observed that in this case from the assessment order, it is clear that there is no evidence on of any contract between the mule owners and the assessee. Ld. Commissioner of Income Tax (A) further observed that there is no evidence of contract oral or written in this case. He opined this fact alone would straightway take this matter out of the purview of section 194C of the Act on the basis of the following cases:- i) Chandrakant Thacker vs. ACIT reported in 129 TTJ 1 (Ctk) ii) C.I.T. (TDS), Chandigarh vs. United Rice Land Ltd. reported in 322 ITR 594 (P H). iii) The case of ACIT vs. Shri Niten Shah (Ahmd) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention that assessee has subsequently deducted tax at source and deposited the same in Government Account cannot take away anything from the merits of the case. Considering the aforesaid, Ld. Commissioner of Income Tax (A) held that assessee was not liable to deduct tax at source on payment made to mule owners u/s. 194C of the Act. Thus, Ld. Commissioner of Income Tax (A) held that addition made u/s. 40a(ia) of the Act was hereby deleted notwithstanding the payment made to Government account of tax deducted at source by the assessee. Ld. Commissioner of Income Tax (A) further rejected the alternative contention of the assessee that since the amounts have already been paid they would not be hit by section 40a(ia) of the Act. 5. Against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere not applicable to the payments of freight or hiring charges made by the assessee to the truck owners and the same could not be disallowed u/s. 40(a)(ia) of the Act. 6.2 We further find that Hon'ble Punjab and Haryana High Court in the case of C.I.T (TDS) vs. United Rice Land Ltd. (Supra) has held that there was neither any oral or written agreement between the assessee or the transporters for carriage of goods nor has it been proved that any freight charges were paid to them in pursuance of a contract for a specified period. The assessee was not required to deduct tax u/s. 194C from the payments made to the transporters. 6.3 Thus, we find that it is clear from the expositions as above that there has to be a oral or written agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X
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