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TMI Blog2007 (6) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... e of survey action, the Assessing Officer concluded that the appellant had not deducted taxes properly on payment made to truck owners or agents in accordance with the provisions of section 194C. After taking into consideration the submissions filed on behalf of the assessee, the Assessing Officer passed an order under section 201(1) and 201(1A) by treating the assessee to be in default for non deduction/short deduction of taxes. The assessee had made total payment of Rs. 17,08,39,119 to various parties whose trucks were engaged for transportation of goods. The Assessing Officer estimated 90 percent of this payment, which comes to Rs. 15,37,55,207 as payment exceeding Rs. 20,000 each and on this amount he computed tax liability of Rs. 15,68,303 under section 194C at 1 percent plus 2 percent surcharge. The Assessing Officer also levied interest under section 201(1A) of Rs. 1,07,820. While holding that the assessee in default for non deduction/ short deduction of taxes, the Assessing Officer has taken into consideration the statement of one Shri Rahul Agrawal, chief executive officer of the assessee-company. Various questions put by the survey officer which were answered by Shri Rahu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the documents and details furnished by the appellant during appellate proceedings. The estimation made by the Assessing Officer is not permitted under section 194C. (ii) The various circulars issued by the Central Board of Direct Taxes as referred to in the appellant s submissions particularly the circular No. 715 ([1995] 215 ITR (St.) 12) supports the contention of the appellant that each GR has to be treated as a separate contract even though the bill amount is paid in two instalments or there is a single payment of more than one GR. The details furnished by the appellant clearly indicate that there is no running account in the name of any payee whether it is a truck owner or an agent. (iii) Wherever the appellant had a written agreement for a specific period, it has deducted taxes as per law. But, in all those cases, which are covered by this appeal, the appellant had not entered into any specific contract for any specific period or for any specific agreed rate. Therefore, each trip where payment was fully made by way of advance and/or partly after completion of the trip, is a separate contract and since for each such separate contract the transportation charges are less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference purposes the agents/ suppliers were contacted and for a particular destination, trucks were hired and negotiations were made with the truck drivers or owners and not with the suppliers. We have seen the correspondence and confirmation from various suppliers who helped the assessee in getting the truck hired by which it has been stated that they have no contract with the assessee as they helped to get truck hired only and all the payments are made directly to the drivers or truck owners by the assessee and not through them. It has been clearly certified that they are charging their commission from truckvalas and not from the assessee. The confirmations from some of the suppliers are placed at pages 99 to 103 of the paper book. In the confirmation it has been clearly certified by M/s. Satyadevi Roadlines Corporation that freight is paid by way of advance to the driver/ owner of the truck and final freight charges is some time paid to us on behalf of the truck owners/drivers for making payment by us to them . It has been further certified that we received our commission from the truck owner/driver for the same. We do not receive any commission/brokerage on your side. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larify ? It was replied that : With reference to debit voucher No. 00193 dated April 13, 2001 and 00216 dated April 14, 2001, of New Bombay Chandigarh Roadways, the name has been mentioned as reference point only . . . The lorries and their respective owners to whom the freight being paid are totally separate entities as in the case of lorry owner Shri Barbel Singh for lorry No. HR 11/F-3216 for debit voucher No. 00193 and lorry owner Shri Madarilal of lorry No. HR 37/8621 of debit voucher No. 00216. Thereafter in reply to question No. 13, it was again stated that : M/s. New Bombay Chandigarh Roadways being reference points as the truck was arranged by him. From these replies, it is clearly seen that the trucks were engaged through the parties who were arranging the trucks and it is also clear from the statement of Shri Rahul Agrawal that no truck contract was entered into between the assessee and the agents but the contracts were between the assessee and the truck drivers/owners. It is also seen that no payment exceeding Rs. 20,000 paid to the truck owners or drivers and where payment exceeds Rs. 20,000 tax has been deducted by the assessee and had deposited in the treas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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