M/S DINA BANDHU KUNDU AND BROTHERS,BURDWAN vs. I.T.O.,WARD-1(3), BURDWAN

The assessee’s former substantive grievance challenges correctness of both the lower authorities’ disallowing his freight charges payments of ₹7,64,145/- for not deducting TDS. The Assessing Officer as well as CIT(A) are of the view that the impugned payments are contractual / sub-contractual in nature u/s 194C of the Act and therefore, the assessee ought to have deducted TDS under Chapter-XVIIB of the M/s Dina Bandhu Kundu & Brothers Vs. ITO Wd-1(3), BWN Page 2 Act. Learned departmental representative fails to dispute the clinching fact that neither of the lower authorities has pin-pointed any oral or written agreement suggesting the assessee’s payees to have ever assumed any contractual liability of this taxpayer. Hon'ble jurisdictional high court in Commissioner of Income Tax Kolkata-XVI vs. M/s Stumm India in of 2009 dated 16.08.2010 upholds this tribunal’s co- ordinate bench’s order deleting an identical disallowance in similar circumstances. I therefore direct the Assessing Officer to delete the impugned disallowance going by the very analogy. The assessee succeeds in its former grievance. Necessary computation shall follow as per law.

Next comes sec. 40A(3) disallowance of cash payment made to the above stated transporters amounting to ₹1,69,297/-. I notice at the outset that both the lower authorities have not pin-pointed that the impugned payments ever crossed minimum threshold limit in each payee’s case in a day. Both the learned representatives are ad idem therefore that the Assessing Officer needs to re-compute the impugned party- wise payment(s) if the same as exceeded the statutory limit or not. This ground is taken as accepted for statistical purposes.

Learned authorized representative at this stage submitted that the assessee’s books of account stand seized by the department as per PCIT Burdwan’s order dated 02.03.2011 passed u/s 133A(3)(ia) of the Act. I therefore make it clear that the Assessing Officer’s consequential exercises shall make it sure that the relevant books of account are duly considered as per law.