2010 (11) TMI 1015 - AT - Income Tax

Summary

Issues involved: Disallowance of transport and carting expenses for non-deduction of TDS u/s 40(a)(ia) of the Income-tax Act, 1961.

Summary:
The appeal by the assessee challenged the disallowance of expenditure of transport and carting expenses due to non-deduction of TDS u/s 40(a)(ia) of the Act. The Assessing Officer presumed a contract u/s 194C with transporters, leading to the disallowance. The CIT(A) confirmed this disallowance, stating that the appellant had a contract, oral or otherwise, with the transporters, making TDS deduction necessary. However, the assessee argued that there was no contract with the transporters, as evidenced by the absence of truck ownership and varying freight rates paid. The Tribunal referred to a similar case where the absence of a transport contract absolved the assessee from TDS liability. Relying on this precedent, the Tribunal allowed the claim of the assessee, finding the facts analogous to the previous case.

Therefore, the Tribunal allowed the appeal of the assessee, overturning the disallowance of transport and carting expenses for non-deduction of TDS u/s 40(a)(ia) of the Income-tax Act, 1961.