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TMI Blog2017 (5) TMI 351X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowed half of the freight payment made by the assessee during the entire year under section 40(a)(ia) of the Act and made addition of Rs. 2,02,31,972/-. 4. On appeal before the CIT(A), it was argued that the Assessing Officer has not pointed out even a single expenses of freight payment which necessitated an obligation on the assessee to make TDS u/s.194C. There is no finding of the Assessing Officer that the freight payment was made to the persons who owned more than two trucks or that the payments made exceeded the threshold limit provided u/s.194C. 5. The CIT(A) after considering the submission of the assessee deleted the addition made by the Assessing Officer, by observing as under: "9. I have carefully gone through the assessment order, written submissions of the appellant, application for additional evidence under Rule 46A, comments of the A.O on the additional evidences and counter comments of the appellant. It is seen that the disallowance has been made by the A.O by invoking provisions of Section 40(a)(ia) on account of alleged non-deduction of tax at source by the appellant from freight paid to the truck owners. Considering the totality of facts and circumstances a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oes not alter the fact that the appellant was entitled only for commission out of the freight income earned by the vehicle / truck owners. Thus, the freight payments made to lorry drivers nor the reimbursement of the freight charges from the customers / consigner / consignee constitutes any business expenses or turnover in the hands of the appellant. I am convinced that the appellant did not carry on any kind of business of transport operator but his business is primarily of a commission agent or broker. The appellant facilitated the payment of transport hire charges by users of the transport vehicles to the actual owners of the vehicles. In accordance with the provisions of Indian Contract Act or in accordance with the implication of the term agent and principal as understood in common parlance would not obliterate factual circumstances of the appellant's consistent conduct over the last several years. The manner of treatment of the freight charges received and paid regularly and consistently in its books of accounts not to be constituted its business transaction. In my considered view, when the appellant collects payment from the customers, it is basically in the nature of curren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a minor default. Taking into consideration the relevant facts of the case, the AO should not have imposed a penalty of under s. 271B. In view of the above also, no penalty under s. 271B can be imposed in this case.-Hindustan Steel Ltd. vs. State of Orissa (1972) 83 ITR 26 (SC) applied." 11. Similar view was taken in Paras Transport Company vs ITO (2005) 92 TTJ (Agra) 607, wherein it was held as under:- "Revenue having not disputed the fact that the amount received by the assessees were consisting of receipts on two accounts namely receipts on account of appellants' own trucks as well as on account of trucks owned by others but hired by the assessee, the whole of the receipts computed on the basis of TDS certificates could not be attributed as receipts on account of plying of assessees own trucks and, even if these receipts are considered as plying on assessees own account, then also the income from assessee's own trucks being liable to be computed under s. 44AE, according to which the assessees were not under obligation even to maintain the books of accounts, no contravention of provisions of s. 44AB can be alleged. One is inclined to agree with the submission of the counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e instead of showing receipt of full freight and then showing the freight paid to truck operators/owners, has shown only the difference between the aforesaid two amounts as her income as because the payments of freight were directly collected by the truck drivers. This is simply a matter of presentation of accounts and merely for not presenting in the accounts, the amount of the gross freight and then freight paid to truck operator/owner separately, the claim of TDS cannot be denied to the assessee and more so in a proceeding under s. 154 under which only an apparent mistake can be rectified. A matter in respect of which two opinions can reasonably be formed is certainly outside the jurisdiction of s. 154. Considering the full facts and circumstances of the case, the withdrawing of credit for TDS was not such an apparent mistake which could have been rectified by the Revenue in a proceeding under s. 154. Hence, the impugned order passed under s. 154 is set aside and the AO is directed to allow credit for TDS amount deducted from the assessee. b) In NASIB SINGH, HILLPATNA vs. ASSISTANT COMMISSIONER OF INCOME TAX (2012) 32 CCH 202 CuttackTrib (2012) 50 SOT 486 (Cuttack) it was hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecuting the contract when he himself is a contractor leasing out its trucks for the purpose of its business by hiring it out. There was no requirement for the assessee to obtain the details of the payees to be subjected to deduction of tax at source as they were not sub- sub-contractors. The said parties did not get substituted in the place of the assessee before the main contractor whose goods the assessee was carrying. These parties did not get burdened with any liability which the assessee had vis-a-vis his contractor. The Assessing Officer on his own has held them as contractors which is patently incorrect when the amounts were to be paid in accordance with the commercial expediency. The Assessing Officer also does not acknowledge them as sub-contractor when the provisions of sub-section (1) of s. 194C requires payment to the contractors only. In other words, the applicability of sub-section (1) of Section 194C has been done away with Assessing Officer himself in his remand report. The learned CIT(A) therefore did not give a finding to sustain the disallowance assessed by the Assessing Officer u/s.40(a)(ia) to suggest that there was any contract between the assessee and those i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of Rs. 14,89,650/- can be deemed as income within the spirit of provisions of Section 198. That on other hand appellant has made out a case by correlating facts of the case with relevant provisions of I.T. Act and judicial pronouncements that in her case addition by invoking provision of Section 198 of TDS amount related to "to pay" transportation works cannot be made. Accordingly, the addition is contrary to the provisions of the Act and hence deleted. This ground of appeal is allowed. We heard both the parties and perused the facts as well as the available information before us. It is a settled proposition that the provisions of section 198 are merely a machinery provisions and are not related to computation of income and chargeability of income as held by the Bombay Tribunal in the case of Varsa G. Salunki 98 ITD 147. In the absence of the charging provisions to tax such deemed income as the income of the assessee, the provisions of section 198 of the Act cannot by themselves can create a charge on certain receipts. Further, it is an admitted proposition that the A.O. accepted the claimed of the assessee both in earlier and later years. It is also noted that the AO refra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the counter comments of the appellant and also an affidavit of Shri Saji Pillai dated 19.09.2013. Having gone through the facts as emanating from all above, I have come to a conclusion that the additional evidence relied upon by the appellant deserves to be admitted and I am convinced that the appellant was prevented by reasonable cause from submitting Form No.15J during the course of assessment proceedings. Hence, the additional evidence is admitted. During the course of appellate proceedings, I had carefully gone through the assessment records and it was gathered that the appellant had engaged the Accountant and Counsel to represent his case, however, due to ill health of the Accountant who had in his possession of the necessary documents and records, the Counsel could not furnish the same which absolved the appellant from liability to make TDS. During the course of appellate proceedings, in order to examine the various aspects of the appellant's business and also to verify the correctness of the contents of Form No.15J, the appellant was asked to produce the books of accounts along with bills and vouchers also copies of Form No.15I furnished by the truck owners. The appellant di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that Shri Saji pillai accepted having made the affidavit dated 14.05.2013 and thus, the answer to question no.11 does not seem to support the conclusion drawn by the A.O. I find no reason to disbelieve the affidavit dated 19.09.2013 wherein Shri Saji pillai in his sworn affidavit, clarified that owing to human error, Form No.15I was incorrectly mentioned as Form No.15J in answer to question no.12, this is due to the reason that except the said statement, the A.O has not pointed out any inconsistency between the affidavit dated 14.05.2013 and statement dated 24.07.2013 and circumstantial evidences in the form of copies of Form No.15I containing complete particulars such as name, address, signature of the truck owner, copies of PAN card, copies of Registration Certificate of the vehicles and Form No.15J. In question no.13, while recording the statement on 24.07.2013, I find that the A.O did not make it clear as to the period he was referring and I do not find any inconsistency in the answer / statement of Shri Saji Pillai in his answer to question no.13 and question no.7, 8, 9 and 10. It is not the case of the A.O that Form No.15J was not supported by Form No.15I obtained from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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