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2015 (6) TMI 170 - AT - Income TaxNon deduction of TDS on account of transportation hire charges made under section 40(a)(ia) - no oral contract existed between the assessee and the transporters - whether there is contractual relationship between the assessee and the persons to whom the assessee had made the payment s in the nature of hiring charges for goods carried vehicles? - Held that:- In our opinion, a contract need not be in writing; even an oral contract is good enough to invoke the provisions of Section 194 C. As Hon’ble Karnataka High Court has observed in the case of Smt J Rama Vs CIT (2012 (6) TMI 645 - Karnataka High Court), “Law does not stipulate the existence of a written contract as a condition precedent for ( invoking the provisions of Section 194 C with respect to payment of TDS”. The transporters have received the payments from the assessee towards the transportation charges, therefore, the presumption normally be that one would proceed on the basis that there was a contract for hiring of goods carried vehicles. Therefore, if the assessee has made the payment for hiring the goods carried vehicles, the provisions of section 194C are clearly applicable. In our opinion, the ld. CIT(Appeals) was not correct in law that the assessee will be liable to deduct the TDS if the amount of a single contract exceeds ₹ 20,000/-. The contract has to be looked into party-wise not on the basis of the individual GR. In our opinion, all the payment s made to a t ruck owner throughout the year are to be aggregated to ascertain the applicability of the TDS provision as all the payments pertain to a contract. Thus the order of the ld. CIT(Appeals) has to be reversed. Also find force in submission of the ld. A.R.that the 2nd proviso to section 40(a)(ia) as inserted by Finance Act, 2012 would apply in the case of the assesse. As relying on Santosh Kumar Kedia Versus Income-tax Officer, Wd-56 (1) , Kolkata [2015 (6) TMI 123 - ITAT KOLKATA we restore this issue to the file of the Assessing officer with the direction that the assessee shall provide all the details to the Assessing Officer with regard to the recipients of the income and taxes paid by them. The Assessing Officer shall carry out necessary verification in respect of the payment s and taxes of such income and al so filing the return by the recipient. In case, the Assessing Officer finds that the recipient has duly paid the taxes on the income, the addition made by the Assessing Officer shall stand deleted.
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