TMI Blog2012 (6) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities were justified in disallowing the said deduction and treating the said amount as the income of the assessee and claiming tax on that amount – In favor of Revenue - 418 of 2009 - - - Dated:- 19-7-2010 - KUMAR N., NAGARATHNA B. V. MRS., JJ. JUDGMENT N. Kumar J.- 1. This appeal is by the assessee challenging the orders passed by the authorities upholding the additions made by the Assessing Officer. 2. The facts of the case are that the assessee is an individual deriving income from hiring of vehicles. For the assessment year 2005-06, return of income was filed on October 30, 2005, declaring an income of Rs. 8,27,740. The return was processed under section 143(1) on March 23, 2006, and a refund of Rs. 34,619 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, she was legally bound to deduct TDS. As the said deduction was not made, section 40(a)(ia) is attracted. Accordingly, deduction on the amount paid to a sub-contractor on which tax has not been deducted at source was disallowed. Therefore, a sum of Rs. 79,45,225 representing the said payment was brought to tax. There was a discrepancy in the accounts relating to the amount covered under the TDS certificates and, therefore, a sum of Rs. 6,82,968 was also added. Thus, a sum of Rs.94,55,933 was held to be taxable. Aggrieved by the said assessment order, the assessee preferred an appeal to the Commissioner of Income-tax (Appeals). 3. After referring to the aforesaid facts and the case law on the point, the appellate authority held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed but included the receipt as per the TDS certificates and, therefore, no case for interference in the said addition was made out. Accordingly, the appeal came to be dismissed. Aggrieved by these orders, the assessee is in appeal before us. 5. After hearing the parties, this appeal is admitted to consider the following substantial questions of law : "(1) When the material on record do not disclose the contract entered into by the assessee with the sub-contractor, for supply of vehicles to perform the contract entered into with the customers, whether the liability under section 194C is attracted. (2) Whether the deduction on account of the discrepancy in the vehicles towards TDS amounts is justified that the said amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transportation of the Employees of Thomson Corporation (International) Private Limited. The material on record discloses that the assessee is owning a fleet of vehicles. That is not sufficient to meet their obligations. Therefore, the assessee hired vehicles from the owners of the vehicles. There is no written agreement entered into between the assessee and such individual owners. It is those vehicles hired in the aforesaid manner which are utilised for performing the con- tract entered into between the assessee and its customers. In the absence of any material placed by the assessee, the only inference that can be drawn from the facts of this case is that the assessee has utilised the vehi- cles taken on lease to perform the written contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 44AB. Therefore, the liability to deduct tax arises under the said proviso to the sub-contractor from whom the vehicles are hired and the said amount payable to the sub-contractor is in excess of Rs. 20,000. Therefore, the three authorities have concurrently held that the transaction in question is a transport contract. The liability to deduct out of the money paid to the sub-contractors does arise. Immediately, TDS is not deducted and the said amount is not paid to the authorities. Therefore, the claim for deduction under section 40(a)(ia) is not attracted and the authorities were justified in disallowing the said deduction and treating the said amount as the income of the assessee and claiming tax on that amount. 9. In so fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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