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2016 (7) TMI 340

g any sum to any resident for carriage of goods? the answer obviously is that it was the seller who was responsible for paying and the seller admits to have done that. Therefore, the liability to deduct tax was that of the seller. In case seller is unable to show that he had made the deduction, Section 40(a)(ia) may be applied to his case but not to the case of the buyer/assessee. - Even assuming that the supplier in transporting the goods to the assessee acted “as an agent of the assessee and the assessee has reimbursed the freight charges to the suppliers, who in turn have paid to the concerned transporters” as held by the learned Tribunal is conceptually correct, no other conclusion is possible. The agent being the supplier in this c .....

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there is no infirmity in the order of the learned CIT(A) in confirming the action of the Assessing Officer to make the disallowance of the said amount ₹ 69,57,975 as per Section 40(a)(ia) r.w.s. 194C of the Income Tax Act, 1961. The reasons which weighed with the learned Tribunal in arriving at the aforesaid conclusion are as follows : On perusal of invoices/bills placed at pages 20 to 30 of the PB, there is no dispute to the fact that freight charges payable by the assessee are separately shown in the said bills/invoices. The assessee has also paid the said freight charges as per invoices to the suppliers namely, M/s. Reliance Industries Ltd., and M/s. Gulshan Sugars & Chemicals Ltd. We also observe on perusal of the said bills/ .....

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uring the F.Yr. 2005-06, after making necessary TDS deduction which have been deposited under TAN No. BRDIOO275C. I have gone through the documents furnished before me. As seen from the invoice produced before me for the months of April, 2005 and May, 2005, the transporter s name is mentioned as Delhi, Assam Roadways Corporation Ltd. and not M/s. Reliance Logistics Ltd. This was pointed out to the Ld. Authorized Representative. However, no explanation in this regard was given by him. The objective of TDS provisions is to ensure that there is proper tax compliance by the assessees. Similarly, in the case of M/s. Gulshan Sugars and Chemicals Ltd. the freight charges have been reimbursed through sale invoices to M/s. Limra Roadways. As seen fr .....

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gards freight : i) Freight : I) For Ex-factory sales : Freight to customers destination will be paid to the GTA on their behalf and collected in the supply invoices. II)The freight rates are Exclusive of Unloading charges at Customers end. Unloading charges at Customers end will be extra and will have to borne by the Customers. III) For Ex-stock point sales, freight from Depot to the customers location will be arranged and paid by the customers themselves. IV) Octroi charges or any other local levy will be borne by customers. The stipulations appearing from the price list dated 30th December, 2006 appear to have actually been pressed into service from the following facts : There are seven invoices disclosed by the assessee-appellant appeari .....

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cal Corporation Limited merged with Reliance Industries Limited. Therefore, Reliance Industries Limited is a transferee company or in other wards, the amalgamated company and the Indian Petrochemical Corporation Limited is the amalgamating company. Therefore, the fact, which emerges, is that the amalgamating company, Indian Petrochemical Corporation Limited sold the goods to the assessee. Reliance Logistics Limited (RLL) was the main contractor of the seller for transportation of materials by road from the plant. RLL in its turn deputed various transporters for despatch of materials to various locations. Delhi Assam Roadways Corporation Limited, whose name appears in all the seven invoices, was thus deputed by RLL. According to the letter d .....

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e seller was, however, entitled to recover the same from the buyer. The question naturally in the facts of the case is as to who was liable to deduct the tax at source. Section 194C in so far as the same is material for our purpose at the relevant point of time provided as follows: Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and …………………….. 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 .....

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ble to show that he had made the deduction, Section 40(a)(ia) may be applied to his case but not to the case of the buyer/assessee. Even assuming that the supplier in transporting the goods to the assessee acted as an agent of the assessee and the assessee has reimbursed the freight charges to the suppliers, who in turn have paid to the concerned transporters as held by the learned Tribunal is conceptually correct, no other conclusion is possible. The agent being the supplier in this case has admittedly paid to the transporters and has also deducted tax at source. When the agent has complied with the provision, the principal cannot be visited with penal consequences. For one payment there could not have been two deductions. Moreover, when a .....

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