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2020 (4) TMI 22 - AT - Income TaxAddition u/s 40(a)(ia) - Default u/s 201 - non deduction of TDS on freight paid during the year - assessee filed the detailed submission stating that TDS is not attracted, as the freight payments are not contractual in nature and moreover the transporter have their PAN number and the entire freight payments were paid during the year, hence the provisions of section 40(a)(ia) of the Act is not applicable - HELD THAT:- Section 201 of the Act provides that where any person, including the principal officer of a company or an employer, who is required to deduct tax at source on any sum, in accordance with the provisions of the Act, does not deduct or does not pay such tax or fails to pay such tax, after making the deduction, then such person shall be deemed to be an assessee in default in respect of such tax. Therefore, section 201 of the Act is applicable in the case of the assessee. We do agree that the freight and cartage charges paid to the transporters are subject to deduction of tax at source, but since the transporters are income tax assessee and once they have shown the said income in their income-tax returns, the Assessing Officer cannot create demand on the assessee. Our aforesaid view is duly supported by the decision of the Hon'ble Supreme Court in ‘Hindustan Coca Cola Beverages Pvt. Ltd. vs. CIT’ [2007 (8) TMI 12 - SUPREME COURT]. We, therefore, in the interest of justice to both the parties, set aside the order of the ld. CIT(A) and restore this issue to the file of the Assessing Officer with a direction that the Assessing Officer shall re-adjudicate this issue and verify from the evidence filed by the assessee, whether transporters have shown the said income in their income-tax returns and duly paid tax thereon. In case the Assessing Officer find that the transporters have duly shown the said income in their income-tax returns and paid tax thereon, the demand raised shall get deleted, as it relates to section 201(1) of the Act. - Decided in favour of assessee for statistical purposes.
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