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TMI Blog2015 (10) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... 010 declaring an income o Rs. 6,51,380/-. The return was processed u/s 143(1) and subsequently selected for scrutiny under CASS. During the course of assessment proceedings, it was noticed by the AO that the assessee had deducted an amount of Rs. 1,33,84,703/- to the P&L account, out of which Rs. 1,29,84,892/- was for transportation expanses. When asked for details of transportation expenses, it was stated that the entire money was paid to her employee Shri Suresh to meet the transportation expenses. According to the AO, while making payment, the assessee was required to deduct tax at source as per provisions of Chapter XVII-B of the I T Act, 1961. Since the assessee had failed to deduct tax at source, the AO disallowed the entire transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HPCL as per agreement. The HPCL is paying transportation charges to the assessee after deduction of tax at source, the details of amount received during the year and tax deducted at source. ii) The assessee has appointed D K Suresh to be in charge of the transportation of LPG Cylinders as per the agreement. D K Suresh is a regular employee of the assessee and he is with regular pay roll. Copy of his appointment letter was furnished before the lower authorities. The salary is paid to him by salary vouchers in every month and copy of payment vouchers were also produced before the lower authorities iii) The details of payment of salary of employees were given. The total salary paid during the year Rs. 7,50,000/- and the details were furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on their behalf by the assessee are debited in the P&L account as expenditure. In fact no expenditure is incurred by the assessee but expenditure is incurred by the HPCL, by making payment to the assessee for transportation. He further submitted that since the HPCL has deducted at source and hence there is no requirement of tax deduction at source in the hand of the assessee. 2.7 Further, he submitted that Shri D K Suresh is an employee and he is not a contractor as considered by the AO. Accordingly, he submitted that the assessee is not liable for deduction of tax at source and the disallowance u/s 40(a)(ia) is not in order and the disallowance is not justified. 2.8 According to the ld AR, the provisions of section 194(1) is applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , any person responsible for paying any sum to any contractor for carrying out any work including supply of labour for carrying out any work in pursuance of a contract between the contractor and a specified person as mentioned in clauses (a) to (k) shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct TDS at a prescribed rate of the amount so credited to the account of the contractor towards income tax. The contention of the assessee is that the provisions of sec. 194C are not applicable to as the payments are made to the employees of the assessee so as to enable them to make payments to the truck ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de to various truck owners which less than Rs. 1,20,000/- to each transporters. The material brought on record suggest that the assessee made payment of Rs. 1,29,84,892/- to Mr. Suresh on 23 occasions. Being so, as per record, the argument of the assessee's counsel is devoid of merits and contrary to the facts. Further, the operation of the judgment relied by the ld counsel for the assessee in the case of M/s Merilyn Shipping & Transports (supra) has been suspended by the Hon'ble High Court of Andhra Pradesh. In view of this, in our opinion, we are inclined to dismiss the appeal filed by the assessee.
4 In the result, the appeal filed by the assessee is dismissed..
Order pronounced in the open Court on this 8th day of Aug 2014. X X X X Extracts X X X X X X X X Extracts X X X X
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