TMI Blog2012 (6) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... NAM ] - I.T.A. No.3357/Ahd/2009 - - - Dated:- 29-6-2012 - SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER For the Respondent : Sri J.P. Jangid, Sr. D.R. For the Petitioner : Ms. Urvashi Shodhan, A.R. ORDER PER : D.K. TYAGI, JUDICIAL MEMBER This is assessee s appeal against the order of ld. CIT(A)-II, Baroda dated 08.10.2009. 2. The only effective ground taken by the assessee is as under:- Ld. CIT(A) has erred in law and on facts in confirming addition of ₹ 1,38,30,000/- made by A.O. on account of disallowance expenses u/s 40 (a)(ia) of the Act. By confirming this addition the ld. CIT(A) has failed to interpret provisions of the newly introduced section in its proper pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,0457 - and withdrawal of ₹ 1,42,80,895/- pointing towards the facts that the entire receipts are first deposited in the bank account of the assessee and then paid to the tanker/truck owners for transport of materials. This was necessary since the assessee did not own transportation vehicles to carry out the above contract, the work was done through a number of transporters. For carrying out such work the assessee credited or paid ₹ 1,38,30,000/- to different transporters exceeding ₹ 50,000/- during the year. Since the assessee did not deduct tax on the payments made for transportation of goods, the Assessing Officer sought an explanation as to why disallowance u/s. 40(a)(ia) of the Income-tax Act be not made. Before the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been deducted at the appropriate rate of 2.25% and not the rate applicable to a commission agent. The Assessing Officer also noted that the audit report classified the assessee as being in the business of transportation. In the view of the Assessing Officer, the fact that the assessee has not credited the above amount in its profit and loss account does not in any way reduce his liability of deducting TDS as per the provisions of section 194C of the Income-tax Act. The assessee was required to deduct TDS as per section 194C(2) @ 1%. Since he failed to do so the Assessing Officer invoked the provisions of section 40(a)(Ja) and disallowed the expenditure of ₹ 1,38,30,000/-. 4. In appeal this action of the A.O. has been confirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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