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TMI Blog2012 (5) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... rrying on the business of truck, lorry and container running from and to various ports, yards, godowns, factories etc., as per the requirements of customers. 3. The assessee filed his return of income at Rs. 8,20,360/-, which was assessed at Rs. 9,86,620/-. This assessment was set aside by the CIT u/s 263 to redo the assessment afresh with certain directions. The new assessment was completed u/s 143(3) read with section 263 on 31.12.2009. Addition on account of non-deduction of TDS u/s 40(a)(ia) is the subject matter of the new assessment. In the course of assessment proceedings, the AO noticed: 4.4 From the above, it can be seen that assessee's first bifurcation statement stated that amount liable for TDS at Rs. 10,65,573/- and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egularly and continuously for assessee, the GRs of these contractors should be aggregated. Therefore, as per first proviso to clause (i) of sub section (3) of section 194C of the I.T. Act and as per Circular No. 715 assessee is liable to deduct tax on the said sum of Rs. 2,41,46,740/-. Since the assessee is covered by proviso to clause (i) of sub section (3) and sub section (2) of section 194C assessee was liable to deduct tax on the above said sum of Rs. 2,41,46,740/. Since no tax has been deducted on this sum the same is required to be added back to the total income under clause (ia) of clause (a) of section 40 of the I.T. Act, 1961. Apart from the above assessee has himself worked out an amount Rs. 9,56,750/- where bills amount are exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harged in the bills principals for transport, loading and unloading and service. It has been clarified in Circular 715 by the CBDT that "transport contracts" would in addition to contract for transportation and loading and unloading of goods also cover contracts for plying of buses, ferries, etc. along with staff. In view of the above, the total disallowance on account of non deduction of tax at source on Motor fleet Hire Charges paid will be as under :- (i) Bills below Rs. 20,000 but exceeding Rs. 50, 000 in aggregate during the previous year relevant to A.Y. 2005-06 as discussed above & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; Rs. 17,71,013/- -------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has been running lorries, trucks and container to and from ports and other destinations on behalf and instructions of its customers at pre determined rates. He further submitted that there are times, when the assessee has taken the contract from his customers but finds that he has himself to hire trucks/lorries/containers from outside parties, which he does at his own cost and peril. The AR further submitted that the assessee, bills, the customers on his own, i.e. his own bill/GR, irrespective of the fact that the lorry/truck/container had been outsourced by him. The AR submitted that neither the AO nor the CIT(A) went into the vary genesis of the business. He further submitted that the revenue authorities that each GR has to be treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. there was no contractor or sub-contractor relationship between assessee and other transporters and therefore assessee was not liable to deduct tax at source from the payments made to other transporters and, therefore, same could not be disallowed under the provisions of section 40(a)(ia). 8. The AR has also placed reliance on the decisions of ITO V/s Indian Road Lines ITA No. 80/Asr/2010 reported in 45 DTR, Chandrakant Thackar V/s ACIT (Cuttack) ITA No. 247/CTK/2009, reported in 45 SOT 13. 9. Closing the arguments, the AR pleaded that the revenue authorities, were, thus wrong in adding back the impugned amount to the income of the assessee and thus the impugned addition needs to be deleted. 10. The DR relied upon the orders of the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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