TaxTMI 
TaxTMI 
2016 (8) TMI 1543
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....e site to the specified destination and there is no contract between the truck owners and the Appellant. * (3) The Learned CIT (Appeals) is not justified in making disallowance under section 40(a)(ia) merely on the basis that the payments were repeatedly made to the same truck owners without appreciating the actual nature of transaction involving the Appellant, facilitator and the truck owners and on mere suspicion and surmises without bringing any evidence as to the existence any contract between the Appellant and the truck owners. * (4) The Learned CIT (Appeals) is not justified in applying the provisions of section 194C when the payments made to the facilitators are below the prescribed limit under section 194C(3) which fact was supported by the transport slips acknowledged by the various facilitators. * (5) The Learned CIT (Appeals) has failed to appreciate that the truck owners/drivers do not carry out any work like loading, unloading of goods nor assume any risks associated with the transportation of goods and thus, the transaction with them does not amount to 'work'. * (6) The Learned CIT (Appeals) is not justified in assuming that the appellant is paying a fixed....
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....ct receipt from this business at Rs. 13.97 Crores. The assessee has paid Rs. 13.59 Crores to various transporters transporting the iron ore/mineral. During the course of assessment proceedings, the Assessing Officer asked the assessee to submit lorry-wise details of transportation charges debited in the accounts, date of charges paid/debited, lorry number, amount paid to each truck, etc. The Assessing Officer also obtained the details of the amount paid to a particular truck exceeding Rs. 50,000 during the whole year. The Assessing Officer found that the assessee has not deducted tax at source from the payment made to each lorry owner/driver who were paid Rs. 50,000 or more during the year and therefore the assessee violated provisions of section 194C(3) of the Act. After issuing show cause notice to the assessee and considering the reply, the Assessing Officer disallowed a sum of Rs. 8,63,50,944 under Section 40(a)(ia) of the Act. The assessee challenged the action of the Assessing Officer before the CIT (Appeals) and contended that the payment against each bill/GR to each truck has to be considered as a separate contract and therefore the individual payment for each GR is less th....
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....pon the judgment of Hon'ble Supreme Court in the case of CIT v. Vatika Township (P.) Ltd. [2014] 367 ITR 466/227 Taxman 121/49 taxmann.com 249 . 5. On the other hand, the learned Departmental Representative has submitted that the Assessing Officer as well as the CIT (Appeals) has examined the fact as well as other relevant record and found that there is oral contract between the assessee and the transporter/truck owners and the payment has been made on the basis of per M.T of iron ore transported by the transporters and not as per trip per lorry. Thus the learned Departmental Representative has contended that it was a regular and continuous contract of transportation of iron ore between the assessee and such other transporters. He has relied upon the orders of the authorities below. 6. We have considered the rival submissions as well as the relevant material on record. The Assessing Officer during the appellate proceedings has examined the details of transportation as recorded in the soft copy and the programme was run on computer. These details have not been disputed by the assessee. The Assessing Officer has given the details of truck number and trip of each truck in Annexu....
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.... at one time. However, if the goods are transported continuously in pursuance of a contract either for specific period or for a specific quantity, then all the GRs under the said contract shall be aggregated and, therefore, if the amount so aggregated exceeds to Rs. 20,000, then the assessee is required to deduct tax at source. The emphasis is on transportation of goods continuously in pursuance of a contract. So, the normal presumption is that, each GR is a separate contract. In the present case, it has always been the stand of the assessee that it does not own any truck and, therefore, it has to hire the lorries from the market as and when required. All the details have been furnished by the assessee before the AO. More than 3,000 trips, as per the assessee, were made, out of which, few trips have been noted by the AO where the assessee had made payments to the owner of a same lorry. The details of the same are placed in the paper book before us. The perusal of the same does not indicate that trips were made continuously under a contract. The AO has not brought any material to prove that there existed any specific contract between the assessee and any of the truck owners. From th....
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....ortation of goods for a specific period, quantity or price. In the case on hand the hiring of the transporter is not on isolated occasion but it was for continuous transportation of iron ore mineral to ports and further the agreement between the assessee and the transporter is based on per M.T. transportation. Therefore, the rate of transportation was agreed between the parties on the basis of the quantity and not on the basis of per trip. Accordingly, we are of the view that the payment made to the particular transporter for transportation of iron ore from mines to ports during the year under consideration has to be aggregated for the purpose of section 194C(3) of the Act. In this case, the Assessing Officer has only aggregated the amount paid in respect of a particular truck and there may be a case that more than one truck has been hired by the assessee from a particular transporter. Accordingly, we do not find any merit or substance in the contention raised by the assessee. 7. As regards the alternative plea that the amendment to section 40(a)(ia) by Finance Act, 2014 has to be considered with retrospective effect, it is pertinent to note that in the amendment by Finance Act, 2....