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TMI Blog2009 (11) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... Society enters into contracts with the Companies such as Cement Manufacturers for transport of the goods of the Companies. The Company which has entered into contract with the assessee deducts 2% of the amount paid on account of TDS in terms of Section 194C(1) of the Income Tax Act, 1961. Thereafter, the assessee society pays the amount received by it to the members of the Society who have actually carried the goods. However, out of the amount paid a nominal amount is deducted for administrative expenses of running the Society. The assessee does not retain any other amount except above and the entire amount received by it from the Company is paid to the members. According to the Revenue the assessee is liable to deduct TDS @ 1% from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll. We have heard Sh.Vinay Kuthiala, learned counsel for the Revenue and Sh. M.M. Khanna, learned senior counsel for the Assessee. Sh. Kuthiala submits that in terms of Section 2(7) assessee means any person who is liable to pay tax under the Act; under Section 2(19) a cooperative society means any cooperative society registered under the Cooperative Societies Act of any State; under Section 2(31) an association of persons is included in the definition of person and under Section 2(42) resident means a person who is a resident within the ambit of Section 6. Section 6 of the Act lays down the requirements of being a resident in India. He submits that the assessee is a person within the meaning of the Income Tax Act and the Truck Operators ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity applies even to the deemed income from the property of the club. To apply the principles of mutuality the basic premise is that the contributors should derive profit from contributions made by themselves to a fund which could only be expended or returned to themselves. In case there is complete identity between the contributors and the participators the principle is applicable. However, this principle is not applicable to the present case since the income is not being derived from contributions by the transporters but is in fact being derived from income received from the Companies for work of transportation being done. Having said so, we are still of the considered view that Section 194C(2) is not attracted in the present case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the nature of the contract, it would be relevant to mention that in the present case the assessee Society was created by the transporters themselves. The transporters formed the society or Union with a view to enter into a contract with the Companies. The Companies enter into contract for transportation of goods and material with the Society. However, the society is nothing more than a conglomeration of the truck operators themselves. The assessee society has been created only with a view to make it easy to enter into a contract with the Companies as also to ensure that the work to the individual truck operators is given strictly in turn so that every truck operator has an equal opportunity to carry the goods and earn income. The socie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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