2015 (7) TMI 71 - AT - Income Tax

Non deduction of TDS - Payments made to the truck owners temporarily employed - No agreement or contract exists - Held that - The issue was squarely covered by the decision of the Kolkata Bench of this Tribunal in the case of Shri Kajal Das in 2012 (1) TMI 167 - ITAT KOLKATA , dated January 3, 2012. In this case it was held that it is not disputed that the assessee had not assigned any of its contractual obligations to the transporters. It was a mere case of hiring the trucks from the market as per the requirements and not as per any contract. Consequently respectfully following the decision of the Kolkata Bench of this Tribunal in the case of Kajal Das, the addition as made by the Assessing Officer and as confirmed by the learned Commissioner of Income-tax (Appeals) by invoking the provisions of section 40(a)(ia) of the Act stands deleted. Even otherwise, the payments have been made before the due date of, filing of the return and no amount remaining unpaid to the truck owners. In this context the decision of the co-ordinate Bench of this Tribunal in the case of Tybas Projects Pvt. Ltd. 2015 (7) TMI 70 - ITAT CUTTACK dated October 16, 2014 . By respectfully following the order of the Coordinate Bench of this Tribunal, the addition is liable to be deleted and we do so. - Decided in favour of assessee.

Summary

Issues:
1. Delayed appeal filing with medical reasons.
2. Disallowance under section 40(a)(ia) for payments to truck owners.
3. Application of TDS provisions and deletion of addition.

Detailed Analysis:
1. The appeal was delayed by 24 days due to medical reasons, and the assessee filed an affidavit for condonation of delay. The delay was condoned, and the appeal was heard on merit.

2. The main issue was the disallowance under section 40(a)(ia) for payments made to truck owners without a formal agreement or contract. The authorized representative argued that the case was similar to a decision by the Kolkata Bench of the Tribunal, where it was held that section 194C was not applicable as there was no contractual obligation assigned to the truck owners. The Departmental representative supported the Assessing Officer's decision, but the Tribunal, following the Kolkata Bench decision, deleted the disallowance.

3. The Assessing Officer disallowed the payments for hiring trucks due to non-deduction of TDS under section 40(a)(ia). However, the Tribunal, relying on previous decisions, including a Special Bench decision, held that since no amount was payable at the end of the year to the truck owners, the disallowance was not justified. The Tribunal also referred to a decision by the Delhi Bench and the Allahabad High Court, emphasizing that TDS provisions should apply to amounts payable, not already paid. Consequently, the addition was deleted, and the appeal was allowed.