TMI Blog2012 (11) TMI 1290X X X X Extracts X X X X X X X X Extracts X X X X ..... n the submission of Form 15-I to the assessee for non-deduction of tax at source u/s.194C. 2. The ground raised by the assessee reads as under : The Learned Assessing Officer as well as Learned Commissioner of Income Tax (Appeal) have applied the mischief of provision of section 40(a) (ia) of Income Tax Act, disallowing ₹ 1,66,97,428, treating the appellant in default for not deducting tax from truck owners, when there is no explicit contract between the truck owners and the appellant. And also the truck owners, to discharge their responsibility have filed declaration in Form No. 15-I, in advance, requesting the appellant for non-deduction of tax from source. 3. The appellant is carrying on business of transport contractor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities to assume that there was a contract between the appellant and the truck owners, being the subcontractor. Taking the above plea, the Assessing Officer invoked the provisions of section 40 (a)(ia) of Income Tax Act and adisallowed ₹ 1,66,97,428/-. In view of the above, the learned Counsel of the assessee submitted that now there are two issues which need to be addressed separately. The first issue is whether after receiving of Form No. 15-I from the sub-contractors who are truck owners, deduction of tax from source is required? In this context, the learned Counsel of the assessee submitted that reference was made before the learned CIT(A) citing the order of ITAT, Ahmedabaad in the case of Valibhai Khanbhai Mankad vs. Dy. Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the receipt of payment shall not construe the existence of an oral contract. In this context, the learned Counsel of the assessee relied on the decision of ITAT,Cuttack in the case of Chandrakant Thackar vs. Asst. Commissioner of Income Tax, reported in (2010), 129 TTJ (Ctk). Similarly, he relied on the decision of ITAT, Cuttack Bench in the case of R. R. Carrying Corporation vs. Asst. Commissioner of Income Tax (2009) 126 TTJ (CTK) 240. In view of the above, the learned Counsel of the assessee submitted that the conditions laid down under section 40(a)(ia) for making addition is that tax is deductible from source and such tax has not been deducted. If both the conditions are satisfied then such payment can be disallowed u/s 40(a) (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the payments made amounting to ₹ 1,69,33,015 when the payment was against material transport cost on the contract amounting to more than ₹ 5 Crores. He argued that the total amount paid including the transportation hiring charges along with the material was ₹ 5,76,82,479 therefore would not be a consideration against contract but reimbursement of expenses including transportation charges. The learned CIT(A) therefore, erred in misinterpreting these facts which are brought on record by the Assessing Officer itself when the Assessing Officer was confined to his finding whether Form 15-I had been received entitling the assessee the claim of non-deduction of tax at source whether could be further looked upon to find existen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered as have been now considered by the learned CIT(A) for distinguishing the facts of the assessees case as per the facts brought on record by the Assessing Officer vis--vis the case law cited by the learned CIT(A) in the case of provisions of Section 40(a)(ia) by immediately thereafter proceeded to disallow the entire claim, which in our view has been correlated by the learned CIT(A) to the finding that the magnitude of the trucks engaged by the assessee for transporting material not belonging to it was purely for executing the sub-contract which he had undertaken was not to be considered after having considered the provisions of Section 194C(5) as clarified w.e.f. 1.10.2009. This means the assessee never entered into any contract when ..... X X X X Extracts X X X X X X X X Extracts X X X X
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