SUPRIYA SILK INDUSTRIES,MUMBAI vs. ITO 18(3)(4), MUMBAI

आदेश / O R D E R

2.1. I have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee firm is engaged in the business of manufacturing/processing of textiles on job work basis. The assessee returned its income at Rs.7,47,709/- which was assessed at Rs.10, 71,503/- making addition of Rs.3,23,794/-. While doing so, the ld. Assessing Officer made disallowance on account of non-deduction of TDS on transportation charges/payment of transportation charges u/s 194C(7) of the Act by observing that TDS on payments to two transporters was not deducted. The stand of the assessee is that TDS was not deductible on such payment made to those transporters who have furnished their PAN to the assessee. The ld. Assessing Officer observed that such details which were required to be furnished u/s 194C(7) of the Act were not furnished. On appeal, the stand taken in the assessment order was affirmed. The assessee is in further appeal, before this Tribunal.

2.2. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, I find that under the facts narrated hereinabove, a co-joint reading of section 194C and 40(a)(ia) of the Act with respect to payments made to contractors/sub-contractors/ transporters, where the assessee furnished PAN of those transporters, to whom payments were made, as per provisions of section 194C(6) of the Act, TDS was not required to be made. As per Rule 29D of the rules, the sub-contractor is required to furnish declaration in Form 15-I to the contractor before actual payment or actual credit to his account takes place. At the same time, as per section 194C (6), no deduction shall be made from any sum credited or paid or likely to be credit or paid during the previous year to the account of a contractor during course of business of plying, hiring or leasing goods carriages on furnishing of his permanent account number to the person paying or crediting such sum. As per clause (7) to section 194C of the Act, the person responsible for paying or crediting any sum to the person referred to in sub-section (6) shall furnish, to the prescribed income tax authority or the person authorized by it, such particulars in such form and within such time as may be prescribed. Before this Tribunal, the assessee has claimed that necessary documents/PAN was duly furnished by the concerned person. It is also noted that in para 3 of the assessment order, there is mentioned by the ld. Assessing Officer himself, the assessee submitted PAN of these two parties and also letter from one of the parties M/s Moogipa Roadways Pvt. Ltd. In view of this claim, the ld. Assessing Officer is directed to examine the authenticity of the claim of the assessee and if it is found to be correct, then, necessary relief may be granted. The ld. Assessing Officer is also to examine the fact, whether the PAN of these two parties were issued prior to making the payments. If the PAN were issued prior to payments then there is force in the contention of the assessee. The ld. Assessing Officer is not expected to go into much technicalities and to exercise the discretion justifiably. Even otherwise, the mandate of the Constitution is to levy and collect due taxes. After ascertaining the facts, examine the claim of the assessee and decide in accordance with law. The assessee be given opportunity of being heard to substantiate its claim, thus, appeal of the assessee is allowed for statistical purposes.

Finally, the appeal of the assessee is allowed for statistical purposes only.

This order was pronounced in the open in the presence of ld. representative from both sides at the conclusion of the hearing on 08/03/2016.