TMI Blog2016 (8) TMI 1543X X X X Extracts X X X X X X X X Extracts X X X X ..... is 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. Amendment to section 40(a)(ia) by Finance Act, 2014 to be considered with retrospective effect - In the ordinary circumstances when an amendment has been specifically brought into statute w.e.f. a specific date then the same cannot be considered as retrospective in nature until and unless the said amendment is for the purpose of supplying an obvious omission in a former legislation or to explain a former legislation. Therefore it is clear that only in the case where the amendment is brought into statute for supply of omission in the existing legislation or it is explanatory in nature it can be considered retrospective. In the case of Vatika Township (P.) Ltd. [ 2014 (9) TMI 576 - SUPREME COURT] , the amendment brought into Section 80IB(10) of the Act was considered by the Hon'ble Supreme Court as retrospective in nature because of the reason that after the said amendment the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 price per MT to the truck owners/drivers without bringing any evidence on record to perversly hold that there exists a contract between the appellant and the truck owners/drivers. (7) The Learned CIT (Appeals) is not justified in assuming that the appellant is liable to deduct tax merely on the basis that the customers of appellant deducted tax from their payments to the appellant. (8) The Learned CIT (Appeals) is not justified in failing to follow the decision CIT v. United Rice Land Ltd. [2010] 322 ITR 594 (P H) by stating that he is bound to follow the decision even If rendered by non-jurisdictional high court considering that he is dealing with all India legislation. 3. As regards disallowance under section 40( a)( ia): (1) Without prejudice to the above, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 194C(3) of the Act. After issuing show cause notice to the assessee and considering the reply, the Assessing Officer disallowed a sum of ₹ 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 than ₹ 50,000 then no TDS is required under Section 194C of the Act. In support of his contention, the assessee relied upon various decisions of this Tribunal. The CIT (Appeals) did not agree with the contention of the assessee and held that there was an oral agreement/contract between the truck owners/drivers therefore the assessee was liable to deduct tax on the payments made to the truck owners/drivers to whom the aggregate amount of payment exceeded ₹ 50,000 in each case. 4. Before us, the ld. AR of the assessee has submitted that the Assessing Officer has clubbed all the payments made to one truck owner/driver whereas it is not a case of artificial splitting the contract receipts. Each trip is a separate contract and rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orters. 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 Annexure to the assessment order. Further it is not a case of hiring transporter by the assessee for completion of a particular task. Transporters were hired by the assessee for continuous transportation of iron ore from mines to different ports. Therefore the act of transportation which was undertaken by the assessee and was got done through hiring of other transporters is continuous business activity of the assessee throughout the year. Further the payment has been made by the assessee as per the rate agreed between the assessee and transporters per M.T. basis and not on the basis of per trip per lorry. Therefore though the payment has been splitted by separate invoices however, the basis of payment is per M.T. and therefore pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 the perusal of the details, we find that one truck bearing No. KA-22-A-8751 was hired five times in the financial year 1998-99 but in different months, for e.g., July, August, November, December and March. The gap is too large and it cannot be said that the transportation was made continuously under any specific contract. We also find that Truck No. 6304 was hired on many occasions in the financial year 1998-99. The frequency seems to be twice a month. It is a ground reality that where the assessee engaged in the transportation business does not own any truck, then it has to hire the truck from the market every time as and when there is a demand for the same. Merely because one particular truck was hired on ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, 2014 the legislature has specifically mentioned that the said amendment is effective from 1.4.2015. In the ordinary circumstances when an amendment has been specifically brought into statute w.e.f. a specific date then the same cannot be considered as retrospective in nature until and unless the said amendment is for the purpose of supplying an obvious omission in a former legislation or to explain a former legislation. Therefore it is clear that only in the case where the amendment is brought into statute for supply of omission in the existing legislation or it is explanatory in nature it can be considered retrospective. In the case of Vatika Township (P.) Ltd. (supra), the amendment brought into Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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