9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (7) TMI 293 - AT - Income TaxTDS u/s 194C - disallowance made u/s.40(a)(ia) - non deduction on lorry payments - Revenue s case therefore is that the impugned disallowance deserves to be restored as it has been wrongly deleted during the course of lower appellate proceedings - Held that - No merit in the instant former substantive ground. We notice first of all that the assessee had merely hired the corresponding 429 lorries whose details have already been given in assessment order. There is no iota of evidence in the case file indicating the assessee firm to have delegated its liability of transportation of goods by way of any contract or sub-contract or that the payees concerned had undertaken such a liability while transporting the relevant goods. As decided in Bhail Bulk Carriers vs ITO 2012 (4) TMI 230 - ITAT MUMBAI the payment made to the outside parties do not come or fall within the purview of section 194C, as the carrying out any work - the appellant was not liable to deduct TDS u/s. 194C(1) for payments made to the outside parties and consequently the disallowance made u/s.40(a)(ia) by the authorities below are deleted. - Decided in favour of assessee Unexplained cash credit addition in assessee s partners capital account - Held that - various judicial precedents have settled the law that such addition has to be made in the concerned partners hands than in case of a firm assessee. We quote one of them CIT vs Metachem Industries (1999 (9) TMI 21 - MADHYA PRADESH HIGH COURT) in support. CIT(A) has already granted liberty to the Assessing Officer to assess the very sum in case of assessee s individual partners concerned. We make it clear that there is not an argument raised before us doubting assessee explaining all the impugned money coming from its partners capital account only. - Decided against revenue
Issues Involved:
1. Disallowance under Section 40(a)(ia) for non-deduction of TDS on lorry payments. 2. Addition of unexplained cash credits under Section 68 in the assessee’s partners’ capital account. Issue-wise Detailed Analysis: 1. Disallowance under Section 40(a)(ia) for non-deduction of TDS on lorry payments: The Revenue challenged the CIT(A)'s decision to reverse the Assessing Officer’s action invoking Section 40(a)(ia) disallowance due to non-deduction of TDS on lorry payments totaling ?1,43,01,395/-. The Revenue argued that these payments were made without deducting TDS, thereby attracting Section 194C read with Section 40(a)(ia) of the Income Tax Act, 1961. The CIT(A) found that the payments were made to different truck owners hired by the appellant, which did not constitute a contract or sub-contract as envisaged under Section 40(a)(ia). The CIT(A) relied on several judicial precedents, including: - Chandrakant Thakur vs. ACIT and CIT vs. Bhagwati Steels, where it was held that no disallowance under Section 40(a)(ia) is warranted if there is no material showing that payments were made under a contract for a specific period, quantity, or price. - City Transport Corporation vs. ITA, which held that if payments for each trip were less than ?20,000, Section 194C was not attracted. - Jurisdictional Kolkata Tribunal in Kahn Dutta Hooghly vs. ITO, which held that Section 40(a)(ia) does not apply to amounts paid before 01-10-2004, the date when the statutory provision came into effect. The Tribunal upheld the CIT(A)’s findings, noting that the assessee had merely hired lorries without delegating the transportation liability via any contract or sub-contract. The Tribunal referenced the decision in Bhail Bulk Carriers vs. ITO, where it was concluded that payments made to outside parties for hiring tankers did not fall under Section 194C as there was no contract or sub-contract transferring risk and responsibility. Additionally, the Tribunal noted that the impugned payments were made before 01.10.2004, and several coordinate bench decisions had established that Section 40(a)(ia) does not apply to amounts credited before this date. Consequently, the Tribunal found no merit in the Revenue's argument and upheld the CIT(A)’s deletion of the disallowance. 2. Addition of unexplained cash credits under Section 68 in the assessee’s partners’ capital account: The Revenue sought to revive the addition of ?64,10,000/- as unexplained cash credits in the assessee’s partners’ capital account. The Tribunal noted that judicial precedents have established that such additions should be made in the hands of the concerned partners rather than the firm. The Tribunal referenced CIT vs. Metachem Industries, which supports this view. The CIT(A) had already given the Assessing Officer the liberty to assess the sum in the individual partners' accounts. The Tribunal found no argument challenging the assessee’s explanation that the funds came from the partners’ capital accounts. Therefore, the Tribunal found no merit in the Revenue's argument and upheld the CIT(A)’s decision. Conclusion: The Tribunal dismissed the Revenue’s appeal, affirming the CIT(A)’s decisions on both issues. The order was pronounced in the Court on 04.07.2018.
|
