TMI Blog2013 (12) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Appellant : Shri Salil Aggarwal Shri Shailesh Gupta. For the Respondent : Smt. Nidhi Srivastava, Sr. DR. ORDER Per TS Kapoor, AM: This is an appeal filed by the assessee against the order of Ld CIT(A) dated 29.3.2011. The assessee has taken seven grounds of appeal. However, the crux of grounds of appeals relates to three issues consisting of action of Assessing Officer in disallowing an amount of Rs.30,41,670/- u/s 40a(ia) for non deduction of tax at source and the second issue is Assessing Officer's action in disallowing shortage of diesel and turbo amounting to Rs.85,056/-. The assessee vide ground No.7 has taken the issue of levy of interest u/s 234B 234C of the Act. Ground No.1 to 5 resolve around the first issue and ground No.6 resolves around the second issue whereas ground No.7 relates to issue of interest u/s 234B 234C of the Act. 2. The brief facts of the case are that the assessee is running petrol pump under the name and style of Rattan Fuels, Narnaul. He filed his return of income declaring a total income of Rs.7,68,260/- on 30.9.2008. During assessment proceedings, the Assessing Officer observed that assessee had made freight payment to M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer by holding as under:- "5.3. From the perusal of the terms of the agreement, it is evident that the tank owner is a sub contractor of the appellant as the risk and responsibility of transporting the goods lies with the tank owner. This is evident from the fact that the appellant had deducted an amount of Rs.1,10,376/- from Rajender Singh on account of shortage and other losses suffered due to the accident by his truck. Therefore, the argument of the appellant that he alone under his control and supervision executed the whole contract and the tank lorry owner did not carry out any part of the work undertaken by the appellant is untenable. The liabilities to the appellant in the agreement with HPCL have been transferred to the tank owners, as evident from the agreement entered with them. This being the case, the provisions of section 194C are attracted. 5.4. The case of Mythri Transport Corporation v. ACIT (supra) relied upon by the AR is entirely on different facts. In that case the assessee transport contractor besides engaging his own vehicles hired different vehicles from the market for transporting bitumen from the principals to various points without enterin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smissed." 6. Aggrieved the assessee filed appeal before this Tribunal. 7. At the outset, the Ld AR submitted that section 40a(ia) was not applicable to the assessee as the contract was between the assessee and M/s HPCL and assessee had utilized the services of lorry only which was in the name of Sujan Singh HUF. He further submitted that there was no works contract between the assessee and lorry owner and in this respect our attention was invited to paper book page 41 where an agreement between the assessee and Sujan Singh HUF was placed and on the strength of this agreement, the Ld AR argued that there was no works contract and the assessee only managed the lorry of the lorry owner and charged 2.5% as his management fee and in this respect our attention was invited to clause (vi) of the agreement. Continuing his arguments he submitted that from assessment year 2003-04 to 2007-08 the revenue had not made any addition in respect of similar payments and out of these years the assessments for two years were completed u/s 143(3). Relying upon the judgment of Hon'ble Supreme Court in the case of CIT v. JK Charitable Trust 308 ITR 161 he argued that if facts and circumstances remain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the contract which was to be executed by the lorry owner. 12. The agreement no where mentions the transfer of risk assumed by the assessee vide clause (4) of Part-E of terms and conditions of agreement entered into by the assessee with HPCL. Clause (4) of this agreement reads as under:- "Any loss/claim or damage arising out of the performance of the contract would be adjustable against the Security Deposit (SD). Any loss/claim/damage higher than security deposit will be recovered from payments due to contractor under this contract or deposits made by or payments due to the contractor under any other with the oil company." 13. This is an important clause in the agreement with HPCL which binds the assessee to make good any loss to HPCL in case of any loss arising out of performance of the contract. 14. The agreement of assessee with lorry owner does not provide for any of such obligation to be met by lorry owner. Therefore the risk assumed by assessee cannot be said to have been transferred to lorry owner and if there is no transfer of risk, the lorry owner cannot be said to have executed any part of contract. As per the provisions of section 194C the sub contractor i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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