TMI Blog2014 (7) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... ment cannot be linked to the declaration of tax at source - any such failure therefore cannot be visualized by adverse consequences provided under section 40(a)(ia) of the Act - the assessee had collected Form15-I from different truck owners and the list was furnished for an amount totaling ₹ 3,58,61,008/- which was duly acknowledged by the AO – thus, the order of the CIT(A) is upheld – Decided against Revenue. Undisclosed receipt – treatment of income on the basis of TDS certificates - Held that:- CIT(A) rightly held that the entire receipt cannot be treated his income as per settled legal preposition - It is only the income component out of it which can be legally said to be appellant’s undeclared and undisclosed income - TDS deducted out of such receipt as appearing in ITS details has to be given credit since the same was not claimed and corresponding income is if included in total income - The same credit has to be given – thus, there is no reason to interfere in the order of the CIT(A) – Decided against Revenue. - ITA Nos.311 & 312/Ahd/2013 & CO Nos.98 & 99/Ahd/2013 - - - Dated:- 30-5-2014 - Mukul Kr Shrawat And T R Meena, JJ. For the Appellant : Shri O P Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.15-I of hirecharges paid to various individuals of ₹ 3,72,34,228/-. As per law I am not liable for deduction of TDS on such amount. Aim of TDS deduction is generate income-tax payers. 4. However, the AO was not convinced and held that in accordance of the provisions of Section 40(a)(ia) the assessee had defaulted by not deducting the TDS; hence, the expenditure was disallowed. 5. Being aggrieved the matter was carried before the First Appellate Authority. Learned CIT(A) has discussed the issue at length. A remand report has also been called for from the AO and the assessee s explanation has also been forwarded for remarks. The explanation of the assessee in respect of the nature of business the assessee has submitted as follows: In order to appreciate the issue involved in this appeal, it would be useful to point out the nature of business carried out by the appellant and accounting practice followed by him. The appellant is carrying on business as transport commission agent by arranging transport vehicles and earn simply commission, say of ₹ 300/- per truck which is credited to brokerage/commission a/c. However, there are different solutions in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, following the Hon ble Orissa high Court judgment in the case of Aloo Suply Co., 121 ITR 680 followed this principle. Alternatively, the disallowance are limited to amount remained payable out of such payments. It is therefore in totality of facts, case laws relied on and analysis as discussed above, there is no justification for any disallowance u/s. 40(a)(ia) of the Act and addition so made by AO. The appellant in his reply to AO during astt. Submitted about collection of form 15-I from the tuck owner therefore there is no issue in reference ot admission of additional evidences. Otherwise also such evidences are contemporaneous and crucial to the issue under dispute can be verified by my office for its merit and credibility. Since the AO objected for admission of such evidence, to satisfy the objection, discussed in detail in earlier para the same are admitted and considered to adjudicate the issue in dispute in judicious manner. The AO is therefore directed to allow such expenses and delete the addition so made of ₹ 3,72,34,228/- the appellant gets relief accordingly. 6. We have heard both the sides. We have carefully perused the orders of the authorities below for bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conditions of further proviso of section 194C(3) are satisfied, the liability of the payee to deduct tax at source would cease. The requirement of such payee to furnish details to the income tax authority in the prescribed form within prescribed time would arise later and any infraction in such a requirement would not make the requirement of deduction at source applicable under subsection (2) of section 194C of the Act. In our view, therefore, the Tribunal was perfectly justified in taking the view in the impugned judgment. It may be that failure to comply such requirement by the payee may result into some other adverse consequences if so provided under the Act. However, fulfilment of such requirement cannot be linked to the declaration of tax at source. Any such failure therefore cannot be visualized by adverse consequences provided under section 40(a)(ia) of the Act. 6.1 As per the provisions of Section 194C any person responsible for paying any sum to any resident for carrying out any work which includes carriage of goods by any mode of transport, in pursuance of contract then at the time of credit of such sum to the account of the contractor or at the time of payment t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o, bills and details it was noticed that the assessee had not shown the receipt from various parties. The claim of the assessee was that only commission was received. However, the AO was not convinced and taxed the amount on the ground that the impugned amount was not disclosed as income by the assessee. 9 When the matter was carried before the First Appellate Authority, part relief was granted as under: I am not inclined to accept the contention of appellant that he has nothing to do with the receipts reflected in such ITS detail and evidences in the form of unrecorded advances made to truck owner as reflected from transfer memo. The appellant was dully confronted with this fact and he do admitted in asstt. proceedings about such discrepancy. However, I am inclined to accept the contention of appellant that entire receipt cannot be treated his income as per settled legal preposition. It is only the income component out of it which can be legally said to be appellant s undeclared and undisclosed income. I am also inclined with the contention of the appellant that TDS so deducted out of such receipt as appearing in ITS details has to be given credit since the same was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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