COMMERCIAL CARRIERS PVT. LTD.,JAMSHEPUR vs. ACIT, CIRCLE-1(1), JAMSHEPUR

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ITA 192/RAN/2019Status: DisposedITAT Ranchi04 March 2020AY 2010-113 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the disallowance under Section 40(a)(ia) was not applicable in cases of partial default in TDS deduction. It also noted the absence of material suggesting a contractual liability for transportation.

What were the facts?

The assessee paid hire charges to transport operators without deducting TDS. The lower authorities disallowed these charges under Section 40(a)(ia) of the Income Tax Act, 1961, treating them as payments for services covered under Section 194C.

What were the issues?

Whether disallowance under Section 40(a)(ia) is applicable for partial default in TDS deduction on hire charges, and if the hire charges constitute payments for services covered under Section 194C.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 194C,Section 147

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Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI

Before: Shri S.S.Godara & Dr. A.L. Saini

Shri Devesh Poddar, Advocate अपीलाथ� क� ओर से/By Appellant Shri Inderjeet Singh, CIT-DR ��यथ� क� ओर से/By Respondent 04-03-2020 सुनवाई क� तार�ख/Date of Hearing 04-03-2020 घोषणा क� तार�ख/Date of Pronouncement आदेश /O R D E R PER BENCH (oral):- This assessee’s appeal for assessment year 2010-11 arises against the Commissioner of Income Tax (Appeals)-Jamshedpur’s order dated 04.02.2019 passed in case No.566/JSR/2017-18 involving proceedings u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused

2.

Learned counsel representing assessee submits that he does not wish to press for assessee’s former legal ground challenging validity of re-opening proceedings u/s 147 of the Act.

M/s Commercial Carriers (P) Ltd. Vs. ACIT Cir.1(1), JSR Page 2 3. Coming to merits, we notice that the assessee’s later substantive ground seeks to delete u/s 40(a)(ia) disallowance of hire charges paid to various trackers / transport operators without deducting TDS. This disallowance sum in dispute involves figure of Rs.3,34,60,529/-. There is no dispute that the assessee has indeed not deducted TDS on the said payments. The Revenue’s as per both the lower authorities detailed discussion that the assessee ought to have deducted TDS since the impugned hire charges are in the nature of sec. 194C contractual payments. We see no reason to express our concurrence with the impugned disallowance. The fact remains that there is no material on record suggesting any oral or written agreement between the assessee and its payees also that the any contractual liability of transportation of goods of undertaken at this taxpayer’s behest. We draw support from hon'ble Calcutta high court’s in Commissioner of Income Tax vs. M/s STUMM India ITAT No. 127 of 2019 dated 16.08.2010 to this effect.

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