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2015 (9) TMI 1225 - ITAT CHANDIGARH

2015 (9) TMI 1225 - ITAT CHANDIGARH - TMI - TDS u/s 194C on Freight - Assessee is booking only net profit out of the transaction - Since the assessee have got no own trucks, it was seen that freight has been received and credited to the Profit & Loss Account and at the same time, trucks are hired from open market and freight is being paid by the assessee at lesser rate, thereafter, showing the profits. - Addition on account of violation of Section 40(a)(ia) and not admitting the additional evide .....

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atory and that the provision of Section 40(a)(ia) apply to the assessees who follow the cash system as well as assessees who follow mercantile systems". The question was decided in favour of the revenue and against assessee - IT APPEAL NO. 396 (CHD.) OF 2010 - Dated:- 30-6-2015 - BHAVNESH SAINI AND T.R. SOOD, JJ. For The Appellant : Anup Kumar Jain For The Respondent : Manjit Singh ORDER Bhavnesh Saini, Judicial Member - This appeal by assessee is directed against the order of ld. CIT(Appeals)-I .....

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the case are that the Assessing Officer, on perusal of the TDS certificate attached with the return of income found that assessee made a claim of refund of ₹ 70,468/-. The return of income and balance sheet revealed that assessee firm is engaged in the business of transportation i.e. to book the orders for transportation of goods and engage trucks from market and transport the goods. The perusal of TDS certificates show that payments are received by the assessee firm on GR basis i.e. for .....

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ed freight at ₹ 81,10,852/- paid the freight amounting to ₹ 80,23,520/-. As per remarks of the auditor that TDS provisions are not applicable, the auditor has remarked, "It is not possible for us to verify whether payment has been made exceeding ₹ 20,000/- otherwise than by crossed check or DD". 5. The Assessing Officer confronted these facts to the assessee vide separate letter in which Assessing Officer clarified that assessee has been booking truck load of goods fr .....

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e of any documentary evidence, cash payment of freight to the truck owners cannot be ruled out. Therefore, proposal was made to disallow the same under section 40(a)(ia) as well as 40A(3) of the Act. 6. The assessee in the written reply explained that assessee was engaged in the business of transport commission agent and charging commission from the truck owners in consideration to the engagement of the trucks to the transport parties. The assessee has never sent goods on GR basis, instead of fr .....

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the basis of TDS certificate. Otherwise penalty under section 44AB may be levied if assessee prepare accounts only on the basis of commission income. The assessee further filed reply in which more or less same facts were reiterated and assessee relied upon certain decisions in support of the contention that it was acting as commission agent only. 7. The Assessing Officer considering the material on record in the light of the reply of the assessee noted that the perusal of the books of account sh .....

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at source on payments which form part of its income. The Assessing Officer noted that the argument of the assessee would clearly disentitle the assessee from making any claim. Since books of account of the assessee show freight received and paid, the argument of the assessee was not accepted. The Assessing Officer also noted that the decisions cited by assessee are totally on different facts because in that cases, Assessing Officer has not proved that assessee had received or made payment of fr .....

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Act and the freight exceeded ₹ 20,000/- as per consignment, therefore, the amount of ₹ 70,09,804/-was disallowed. 8. The assessee challenged the addition before ld. CIT(Appeals) and similar submissions were reiterated which were made before Assessing Officer in which assessee claimed that assessee firm has acted as an commission agent only. The assessee, however, admitted that assessee has shown ₹ 81,10,852/- as freight amount and after keeping ₹ 87,332/- as TDS, assesse .....

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to make out a case of admission of additional evidence, accordingly request for admission of additional evidence was also rejected. The findings of ld. CIT(Appeals) in para 2.4 of the appellate order are reproduced as under : "2.4 The appellant had filed an application under rule 46A for admission of additional evidence stating that due to paucity of time same could not be filed. The reason stated is very general and without pinpointing as to how the assessee's case is covered under any .....

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of these facts. If the appellant was only a commission agent then only the commission income should have been shown in its books of account. Also, the argument of the Id. AR that it had issued no GR/bilty for the trucks arranged through is of no consequence as the assessees has itself shown the receipts and payments of freight. The assertion of the Assessing Officer that payments exceeding ₹ 20,000/- have been made has not been contradicted. Therefore, the provisions of section 194C of the .....

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n the other hand, ld. DR relied upon orders of the authorities below. The Assessing Officer has specifically noted on perusal of the books of account that assessee had debited as well as credited payments in the books of account under two accounts namely 'freight received' and 'freight paid' which shows that assessee accounted for freight received from his principal as well as payments to sub-contractors. The assessee also in his submissions before ld. CIT(Appeals) admitted that .....

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ission Agent only. However, the claim of assessee was not proved through any reliable and cogent evidence. The books of account of the assessee itself falsify the claim of assessee that it has acted as commission agent only. The theory of commission agent propounded by the assessee was not proved through any evidence or material on record. The assessee also claimed that its principal has deducted tax on payment to the assessee, therefore, Assessing Officer was justified in holding that assessee .....

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taken vehicles through assessee and those parties have issued bility. However, assessee was not able to make out any case for admission of this additional evidence under Rule 46A of the IT Rules. Though the assessee has raised a ground of appeal in the present appeal challenging the order of ld. CIT(Appeals) in not admitting additional evidence, however, ld. counsel for the assessee, during the course of arguments, did not argue on this point and has not argued why this additional evidence shoul .....

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;ble Punjab & Haryana High Court in the case of CIT v. United Rice Land Ltd. [2010] 322 ITR 594. In this case, the Tribunal noted that there was neither any oral or written agreement between the assessee and the transporter for carriage of goods, nor it has been proved that any sum of money regarding freight charges was paid to them in pursuance of the contract for specific period, quantity or price. The Hon'ble High Court dismissed the appeal of the revenue confirming the finding of fac .....

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