GRAND ARK LOGISTICS PVT. LTD.,CHENNAI vs. DCIT, CORP. CIRCLE-1(1), CHENNAI
आयकर अपीलȣय अͬधकरण,‘बी’ Ûयायपीठ,चेÛनई
IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI
सुĮी पɮमावती एस, लेखा सदèय एवं Įी मनु कुमार ͬगǐर,ÛयाǓयक सदèय के सम¢
BEFORE Ms. PADMAVATHY S, ACCOUNTANT MEMBER AND SHRI MANU KUMAR GIRI, JUDICIAL MEMBER
आयकर अपील सं./ITA No.: 862/CHNY/2025
िनधाᭅरण वषᭅ/Assessment Year : 2021-22
Grand Ark Logistics Pvt. Ltd.,
58, Chennai Bangalore Highway,
Vigneshwara Nagar,
Sriperumbudur,
Beemanthangal Village,
Chennai – 602 117. Vs.
The Deputy Commissioner of Income Tax,
Corporate Circle 1(1),
Chennai.
PAN: AAFCG 6884L
(अपीलाथᱮ/Appellant)
(ᮧ᭜यथᱮ/Respondent)
अपीलाथᱮ कᳱ ओर से/Appellant by : Shri Arjun Raj, Advocate
ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Ms. Gouthami Manivasagam, JCIT
सुनवाई कᳱ तारीख/Date of Hearing : 06.08.2025
घोषणा कᳱ तारीख/Date of Pronouncement : 29.10.2025
आदेश /O R D E R
PER MANU KUMAR GIRI, JM:
This appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax(Appeals), National Faceless
Appeal Centre (NFAC), Delhi, [hereinafter the “Ld.CIT(A)”] dated
23.12.2024 arising out of the order dated 27.12.2022 passed by the Assessing Officer, Assessment Unit, Income Tax Department
(hereinafter referred to as the "AO") passed u/s.143(3) r.w.s.144B
ITA. No:862/Chny/2025
of the Income-tax Act, 1961 (hereinafter "the Act') for the Assessment Year 2021-22 (hereinafter the "AY").
The Registry has noted a delay of 27 days in the filing of the appeal. Considering the reasons stated in the condonation petition and the affidavit filed by the assessee, and finding the explanation satisfactory, the delay is condoned. Accordingly, the appeal is admitted for adjudication.
The assessee, Grand Ark Logistics Private Limited, a company engaged in the business of transporting goods through road, filed its return of income for AY 2021-22 on 02.08.2022, declaring a total income of Rs.1,08,61,070/-. The department issued notices u/s.142 of the Act and in response the assessee has filed the required details called for then and there. During scrutiny, the Assessment Unit observed that the assessee debited Rs.11,47,30,371/- as cost of services, of which Rs.10,18,75,686- was paid to various contractors for transport hire charges. No TDS was deducted on payments amounting to Rs.5,15,48,393/-. The assessee claimed exemption from TDS under Section 191C(6) of the Act, asserting that 16 contractors furnished declarations stating they owned 10 or fewer goods carriages and provided their PANs. However, the Assessment Unit, after verification, found that for 8 contractors, either no response was received to notices under Section 133(6) or evidence was lacking to prove that the transport work was performed using vehicles owned by them. Consequently, Rs.70,06,900/-, being 30% of Rs.2,33,56,331/- (payments to non- compliant contractors), was disallowed under Section 40(a) (ia) and added to the total income, resulting in an assessed income of ITA. No:862/Chny/2025
Rs.1,78,70,970/-. The ld.CIT(A), in its order dated 23.12.2024, upheld the disallowance, dismissing the assessee's appeal after considering all submissions, including claims of compliance with Section 194C(6) and the impact of the COVID-19 pandemic.
Aggrieved by the order of the Ld. CIT(A), the assessee preferred an appeal before us.
Before us, the ld.counsel for the assessee contends that the order passed by Ld. CIT(A) dated 31.12.2024 is contrary to the law and the facts and circumstances of the case. The Ld. CIT(A) erred in disallowing an expenditure of Rs.70,06,900 incurred towards transport hire charges under Section 40(a)(ia) for alleged non-deduction of TDS amounting to Rs.23,35,633. The disallowed amount was unjustly added back to the assessee’s income without assigning proper reasons. The assessee submits that Section 40(a)(ia) is not applicable in the present case, and its invocation for making the impugned additions is improper and unjustified. The assessee further submitted that assessee had submitted detailed party-wise breakup along with PAN details and proof of payment through banking channels. The ld. Counsel contends that despite this, the ld.CIT(A) failed to acknowledge the proper compliance and wrongly disallowed the expenses. The ld.Counsel contends that the ld.CIT(A) failed to exercise its powers under Section 133(6) to call for third-party confirmations. The assessee argues that without exercising such powers, the consequential disallowance lacks legal validity. The ld.Counsel contends that the disallowance is contrary to the second proviso to Section 40(a)(ia), which provides relief in cases where payments are not subject to TDS due to compliance by the recipient. Even otherwise, the provisions of Section 40(a)(ia) ITA. No:862/Chny/2025
are not applicable to the present case, and ld.CIT(A) erred in applying them without due consideration of the facts.
The ld.Counsel contends that the assessee had disputed the disallowance and substantiated the genuineness of transport hire charges incurred. The disallowance made without proper application of mind is unjustified and unsustainable. The ld.Counsel contends that the ld.CIT(A) wrongfully rejected the assessee's plea for admission of additional evidence under Rule 46A of the Income Tax
Rules, 1962, without appreciating the extraordinary circumstances that led to the non-submission during assessment proceedings. The ld.Counsel contends that the ld.CIT(A) failed to independently verify the disallowance under Section 40(a)(ia)/194C. This resulted in an unjust, unsustainable, and factually incorrect addition. The ld.
Counsel for the assessee to substantiate his arguments has filed paper book in detailed as under:
Sl.
No.
Date
Particulars
Page
No.
FINANCIALS FOR ASSESSMENT YEAR : 2021-22
1. 02.03.2022
Return of income
1
2. 04.02.2022
Tax audit report in Form No.3CA – 3CD
2
3. 30.11.2021
Audited Financials
22
4. 02.03.2022
Statement of Income
55
SCRUTINY ASSESSMENT PROCEEDINGS
5. 28.06.2022
Notice under Section 143(2) of the Act
59
6. 04.08.2022
Reply to Notice under Section 142(1) of the Act dated
18.07.2022
62
7. 19.10.2022
Reply to Notice under Section 142(1) of the Act dated
07.10.2022
67
8. -
Details of Cost of Service for the Financial year 2020-2021
71
9. 01.04.2020
Declaration under Section 194C(6) of the Act by Jeeva
Transport
149
Declaration under Section 194C(6) of the Act by Sudha
150
Declaration under Section 194C(6) of the Act by Sri Vatchala
Transport
151
Declaration under Section 194C(6) of the Act by Sri Thai
Mugambikai Transport
152
Declaration under Section 194C(6) of the Act by Sri Murugan
Transport
153
Declaration under Section 194C(6) of the Act by Sri
154
ITA. No:862/Chny/2025
Mahalakshmi Transport
Declaration under Section 194C(6) of the Act by Shri
Annamalaiar Transport
155
Declaration under Section 194C(6) of the Act by Rajsundar
156
Declaration under Section 194C(6) of the Act by PJ
Transport
157
Declaration under Section 194C(6) of the Act by Paneer
Logistics
158
Declaration under Section 194C(6) of the Act by SLB
Logistics Private Limited
159
Declaration under Section 194C(6) of the Act by N.S.K.
Services
160
Declaration under Section 194C(6) of the Act by Mathan
Transport
161
Declaration under Section 194C(6) of the Act by Kailai
Logistics
162
Declaration under Section 194C(6) of the Act by M.S.
Transport
163
Declaration under Section 194C(6) of the Act by Innila Cargo
Movers
164
Declaration under Section 194C(6) of the Act by H.S.M
Enterprises
165
Declaration under Section 194C(6) of the Act by Geetha
Transport Service
166
Declaration under Section 194C(6) of the Act by C.S. Dilli
Babu
167
Declaration under Section 194C(6) of the Act by C.E.
Anbazhagan
168
Declaration under Section 194C(6) of the Act by Sri
Jegathambal Transport
169
Declaration under Section 194C(6) of the Act by Panner
Selva.S Transport
170
Declaration under Section 194C(6) of the Act by Swathi
Transports
171
Declaration under Section 194C(6) of the Act by B. Bagiyam
Transport
172
Declaration under Section 194C(6) of the Act by VBT
Enterprises
173
10
-
Ledger account of Mathan Transport
174
Invoices raised by Mathan Transport
175
11
-
Ledger account of S.S.Diesel Pump Service
176
Ledger account of PMK Transport
177
Invoice raised by PMK Transport
183
12
-
Ledger account of Manikandan Battery
186
Invoice raised by Manikandan Battery
187
13
-
Ledger account of Vaska Consultancy Pvt Ltd
188
Invoice raised by Vaska Consultancy Pvt. Ltd.
190
14. 17.11.2022
Reply to the Notice under Section 142(1) of the Act dated
10.11.2022
191
15. -
Details of Contractual Payments made during the Financial year 2020-2021
197
ITA. No:862/Chny/2025
- Deductee Consol based on TDS return for the FY 2020-2021 199 17. - Ledger account of Apollo Supply Chain Pvt. Ltd 202
Invoices raised by Apollo Supply Chain Pvt. Ltd
203
18. Ledger account of Omega Enterprises
207
Invoices raised by Omega Enterprises
208
19. Ledger account of PMK Transport
209
Invoices raised by PMK Transport
215
20. Ledger account of Swathi Transports
218
Invoices raised by Swathi Transports
224
21. -
GSTR – 2A – Andhra Pradesh
244
22. GSTR – 2A – Tamil Nadu
252
23. -
Compliance Check for Section 206AB & 206CCA
260
24. Ledger account of Anbazhagan
261
25. Ledger account of Geetha Transport Service
265
Invoices raised by Geetha Transport Service
266
26. Ledger account of H.S.M. Enterprises
269
27. Ledger account of Innila Cargo Movers
270
28. Ledger account of Kailai Logistics
276
Invoices raised by Kailai Logistics
277
29. Ledger account of Leema Designers & Decorators
279
30. Ledger account of Mathan Transport
280
Invoices raised by Mathan Transport
281
31. Ledger account of P.J. Transport
282
Invoices raised by P.J. Transport
286
32. Ledger account of Panner Logistics
289
Invoices raised by Panner Logistics
293
33. Ledger account of Rajsundar
296
Invoices raised by Rajsundar
297
34. Ledger account of Sri Jegathambal Transport
300
Invoices raised by Sri Jegathambal Transport
301
35. Ledger account of Sri Mahalakshmi Transport
302
Invoices raised by Sri Mahalakshmi Transport
324
36. Ledger account of Sri Murugan Transport
328
Invoices raised by Sri Murugan Transport
329
37. Ledger account of Sri Thai Mugambikai Transport
330
Invoices raised by Sri Thai Mugambikai Transport
332
38. Ledger account of Sudha
335
Invoices raised by Sudha
336
39. Ledger account of VBT Enterprises
339
40. Certificate of Registration – Form 23
340
41. 10.08.2019
Tax invoice raised by T V Sundram Iyengar & Sons Private
Limited – 1
382
42. 13.12.2018
Tax invoice raised by Tata Motors – 1
384
43. 31.01.2019
Tax invoice raised by Eicher
387
44. 07.09.2019
Tax invoice raised by Tata Motors – 2
388
45. 27.02.2020
Tax invoice raised by T V Sundram Iyengar & Sons Private
Limited – 2
392
46. 13.12.2022
Show Cause Notice
393
47. 20.12.2022
Reply to the Show Cause Notice
405
48. -
Certificate of Registration of HSM Enterprises
412
ITA. No:862/Chny/2025
-
Statement showing Trip Details of HSM Enterprises
413
49. 11.09.2019
Deed of Partnership of Kailai Logistics
418
-
Details of Certificate of Registration – Kailai Logistics
425
-
Statement showing Trip Details of Kalai Logistics
428
50. Details of trips – Sri Mahalakshmi Transport
441
Details of Certificate of Registration – Sri Mahalakshmi
Transport
442
51. Details of Certificate of Registration – Sri Murugan Transport
464
Statement showing Trip Details of Sri Murugan Transport
469
52. Details of Certificate of Registration – Leema Designers &
Decorators
475
Statement showing Trip Details of Leema Designers &
Decorators
476
53. Statement showing Trip Details of VBT Enterprises
483
54. Death Certificate of Badri Narayanan A.K.
495
55. Statement showing Trip Details of Innila Cargo Movers
496
56. 27.12.2022
Scrutiny assessment order passed under Section 143(3) of the Act
59
25.11.2024 Written submissions filed before the First Appellate Authority 538 58. - Details of Contractual Payments made during the assessment year 2021-22 544 59 - Compliance Check for Section 206AB & 206CCA 546 60. 23.12.2024 Order of the First Appellate Authority (Impugned Order) 547
Per contra, the ld. DR for the revenue submitted that the order passed by the ld.CIT(A) dated 23.12.2024, upholding the assessment order dated 27.12.2022 passed u/s.143(3) read with Section 144B of the Income Tax Act, 1961 (the Act), is lawful, reasoned, and sustainable both on facts and in law. The disallowance of Rs.70,06,900/-, being 30% of Rs.2,33,56,331/-, u/s.40(a)(a) of the Act, for non-deduction of tax at source (IDS) on transport hire charges as required u/s.194C, is well-founded. She further contends that the assessment and appellate orders are in accordance with the provisions of the Act. The disallowance u/s.40(a)(ia) was made after thorough verification, including notices u/s.133(6) to contractors and opportunities to the assessee to substantiate its claims. The facts, as evidenced by incomplete documentation and non-compliance by contractors, justify the ITA. No:862/Chny/2025
addition. She further contends that for 8 contractors (e.g., Innila
Cargo Movers, Kailai Logistics, Mathan Transport, etc.), the assessee failed to substantiate that the transport work was performed using vehicles owned by them. Notices u/s.133(6) either went unanswered or revealed discrepancies.
The ld. DR for the revenue furthermore contends that the burden lies on the assessee, as the deductor, to verify the authenticity of declarations and ensure compliance with Section 191C(6). Mere submission of declarations without evidence of ownership and usage of owned vehicles does not suffice. The disallowance is lawful and justified.
We have heard the rival submissions and carefully perused the material on record, including the voluminous paper book filed by the assessee. We note that the assessee had filed certain additional evidence before the Ld. CIT(A), including transport declarations, registration certificates, trip details, and ledger accounts of various contractors. However, the Ld. CIT(A) rejected the admission of these documents under Rule 46A of the Income Tax Rules, 1962 without recording adequate justification. In our considered view, the additional evidence submitted by the assessee is relevant and crucial to determine the applicability of Section 194C(6) and the corresponding disallowance under Section 40(a)(ia). The documents pertain to the ownership and use of transport vehicles, and their verification is central to the dispute. We find that in the interest of justice and to arrive at the correct tax liability, such evidence should be considered. Accordingly, we deem it fit to set aside the order of the Ld. CIT(A) and restore the matter to the file of the Assessing Officer (AO). The AO shall consider the additional evidence and any ITA. No:862/Chny/2025
other evidence that the assessee may furnish in support of its claim and pass a speaking order after affording adequate opportunity to the assessee. We make it clear that we have not expressed any opinion on the merits of the issue and all grounds are kept open for adjudication afresh. The assessee is directed to extend full cooperation during the remand proceedings and file all necessary documents and evidence as required by the AO.
In the result, appeal filed by the assessee is allowed for the statistical purposes.
Order pronounced in the open court on 29th October, 2025 at Chennai. (पɮमावती एस) ( मनु कुमार िगįर)
(PADMAVATHY S) (MANU KUMAR GIRI)
लेखा सद˟/ACCOUNTANT MEMBER Ɋाियक सद˟/JUDICIAL MEMBER
चेÛनई/Chennai,
Ǒदनांक/Date: 29.10.2025
RSR
आदेशकȧĤǓतͧलͪपअĒेͪषत/Copy to:
अपीलाथȸ/Appellant
Ĥ×यथȸ/Respondent 3. आयकर आयुÈत /CIT, Chennai 4. ͪवभागीय ĤǓतǓनͬध/DR
गाड[ फाईल/GF.