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TMI Blog2010 (8) TMI 756X X X X Extracts X X X X X X X X Extracts X X X X ..... charge receipts shown at Rs. 44,000 in the Profit & Loss account as against the same shown at Rs. 34,24,868 in the TDS certificate." 2. Facts in brief as emerged from the corresponding assessment order passed under section 143(3) of the Income-tax Act, 1961 dated 8-9-2006 were that the assessee-company during the year was engaged in the business of providing transportation service. 2.1 On perusal of TDS certificates it was noticed by the Assessing Officer that the amount deducted at source was a sum of Rs. 1,52,307 which had covered the income of Rs. 90,95,287. However, it has also been noticed that in the Profit & Loss account receipts shown by the assessee were only Rs. 72,70,562. The assessee was asked to reconcile the same. The Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts were reiterated and the Learned CIT (Appeals) has given his finding vide paragraph No. 3 as under :- "3. I have perused the assessment order and also carefully examined the issue with reference to the account copies and the confirmatory letter given by M/s. Supreme Roadlines Corporation which were filed before the Assessing Officer during the assessment proceedings. It is now clear from the hire charges account as well as the ledger account of M/s. Supreme Roadlines Corporation in the books of the appellant that there were contra entries as regards the amount being hire charges payable to the truck owners who were arranged by the appellant company for and on behalf of M/s. Supreme Roadlines Corporation. What was accounted as income i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, therefore, the accounts have not depicted the correct position of the income which was rightly taxed by the Assessing Officer. On the other hand, from the side of the respondent-assessee Learned Authorised Representative of the assessee Shri S.N. Divatia has drawn our attention from a Certificate issued by M/s. Supreme Roadlines Corporation dated 10-3-2004 which was stated to have been filed before the Assessing Officer to demonstrate that the said concern has actually paid Rs. 500 as a commission per truck, but the TDS was deducted on the whole amount freight of trucks supplied. He has also referred the ledger account of "truck hire charges" to explain that only the balance amount was shown as receipt from M/s. Supreme Roadlines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount had an over-riding right of the Truck-owners therefore directly diverted to their respective accounts. On careful examination of the statutory provisions to answer this legal question, it is evident that the deduction of tax at source is not a levy of tax unless and until it is followed by an assessment order making a charge of tax. Even this is also a settled position that the deduction of tax at source in no way expressly indicates that ipso facto the assessee is entitled for the refund or adjustment of tax of the TDS amount against the income mentioned therein. The deduction of tax is not a levy of tax. Deduction of tax at source is merely one of the mode of collection of tax. The amount on which TDS is deducted is subject to cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to the TDS Certificate but assessment of an income is altogether an independent exercise. With this understanding of law if we compare the facts of the case, and then it is evident that the amount which was certified on the TDS Certificate could or could not have been subject to tax in the hands of the assessee-recipient. The deductor had chosen a safe procedure of deduction of tax on the entire amount of freight. Otherwise the freight was to be paid to the truck owners and not to the assessee-company, who is only a conduit in arranging the hiring of the trucks. The freight was to be passed on to the truck owners, therefore, the freight was not subject to tax in the hands of the assessee. Nevertheless, accounts of the assessee hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has duly disclosed her income relating to the transactions represented by the said certificates for the year under appeal. There is no material on record to show that the amount of TDS was not deducted from the assessee and it was borne by somebody else. The only dispute is that the assessee instead of showing receipt of full freight and then showing the freight paid to truck operators/owners, has shown only the difference between the aforesaid two amounts as here income as because the payments of freight were directly collected by the truck drivers. In our considered opinion, this is simply a matter of presentation of accounts and merely for not presenting in the accounts, the amount of the gross freight and then freight paid to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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