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2014 (7) TMI 57 - HC - Income TaxLiability to deduct TDS from payment u/s 194C - assessee being merely administrator or acting as transporter - hiring of independent truck owners by the assessee – Freight expenses u/s 40(a)(ia) of the Act – Held that:- The tender for carriage of LPG from IOC Baddi was in the name of the assessee himself and that he had hired the trucks from the aforesaid three persons for the purpose of carrying out the work undertaken by him as a ‘Contractor’ from the IOC, Baddi - While insofar as the transportation work carried out by the said three persons is concerned, the assessee had no liability to provide anything such as the drivers, fuel, accessories etc. rather the truck owners had incurred all the expenses related to the transportation of the LPG and the appellant had made the payment to them not on the basis of individual trips of the trucks but for the entire deal work - The nature of transportation between the assessee and the three persons was self-explanatory as the assessee had himself submitted that the payments were made under an independent contract between him and the truck owners. The freight charges were being paid by the appellant to the three persons in respect of the sub-contract u/s 194C (2) following the assessee’s own contract with IOC, Baddi, it was evident that the assessee was trying to take undue benefit of the amendment brought about in Section 194C (1) w.e.f. 1.6.2007 by taking the plea that the transaction with the three truck owners was in the nature of a contract - the society does not retain any profits - It only retain as nominal amount as “parchi charges” which is used for meeting the administrative expenses of the society - the Society has an independent legal status and is also contractor within the meaning of Section 194C - the members have a separate status but there is no sub-contract between the society and the members - The society is nothing but a collective name for all the members and the contract entered by the society is for the benefit of the constituent members and there is no contract between the society and the members - The provisions of Section 40 (a) (ia) of the Act were applicable not only to the amount which were shown as outstanding on the closing of the relevant previous year, but to the entire expenditure which became liable for payment at any point of time during the year under consideration and which was also paid before the closing of the year – thus, no substantial question of law arises for consideration – Decided against assessee.
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