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TMI Blog2012 (6) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... ued to the assessee. Thereafter, the case was selected for scrutiny under CASS. Notice under section 143(2) was served on the assessee on September 2, 2006. In reply to the same, the assessee appeared, produced books of account and other details. It is seen from the said books and from the income and expenditure statement, the assessee had debited a sum of Rs. 88,12,432 as vehicle running expenses. When she was called upon to explain the said expenses, she had given elaborate accounts of vehicle running expenses. The said accounts disclosed that the assessee had not deducted the tax at source (TDS) as per the provisions of section 194C of the Income-tax Act, 1961 (for short, hereinafter referred to as "the Act"). In spite of sufficient oppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee is the owner of the hired vehicle. It was a transport contract. Section 194C mandates TDS and, therefore, he held that disallowance by the Assessing Officer is proper and accordingly, he confirmed the same. In so far as the discrepancy in the TDS certificate is concerned, it was noticed that the balance amount was received in subsequent year which was duly reflected in the accounts and when the assessee was maintaining the books of account on the mercantile basis, therefore, the accounting and reflecting on receipt basis was not in order and, therefore, even the addition made by the Assessing Officer in respect of TDS was also confirmed. 4. Aggrieved by the said two orders, the assessee preferred an appeal to the Tribunal. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards TDS amounts is justified that the said amounts are actually paid in the subsequent years ?" 6. Learned counsel for the appellant contended that the assessee had entered into a contract to supply vehicles to M/s. Mahindra and many other companies under written contracts on various dates. It is only to per- form the obligations under the said contracts, after he hired vehicles from sub-contractors under a written contract, the liability to deduct TDS arises under section 194C(2) of the Act. In this case, such a material is not available and, therefore, the authorities were not justified in disallowing the deductions claimed by the assessee. 7. Per contra, learned counsel for the Income-tax Department submits that the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tilised the vehi- cles taken on lease to perform the written contract entered into between the assessee and various customers. Out of the transportation charges received under the aforesaid written contract, a substantial portion has been paid to the various owners of the vehicles towards transportation charges. Though a ground is taken that such payment is not in excess of Rs.20,000 and, therefore, there is no obligation to deduct TDS, the material on record discloses that total amount paid towards transportation charges is roughly about Rs. 79,45,225. In the absence of any particulars, it cannot be said that there was no liability to deduct tax on that score. Law does not stipulate the existence of a written contract as a condition preced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of the assessee and claiming tax on that amount. 9. In so far as the second substantial question of law is concerned, the facts are not in dispute. The TDS certificates enclosed with the return amounted to Rs. 1,70,89,004 whereas the receipt disclosed in the income and expenditure account, was Rs. 1,64,06,036. This discrepancy is admitted. The explanation offered is that a portion of the said TDS deductions are claimed in the subsequent year. The amount of Rs. 6,82,968 was received by the assessee in the following year. As rightly pointed out by the authorities, when the assessee is following the maintenance of books of account on the mercantile basis, accounting and reflecting on receipt basis is not proper and, therefore, right ..... X X X X Extracts X X X X X X X X Extracts X X X X
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