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TMI Blog2012 (8) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... ter and what was shown in the P/L A/c. There is also no finding either by AO or by the CIT (A) about the exact nature of assessee’s business. Further whether mere arrangement of trucks resulted in any contract is to be examined as AO has not invoked the provisions of section 194C nor disallowed amounts u/s 40(a)(ia). Since these aspects are not examined by AO in its correct perspective, we set aside the assessment to the file of AO to examine the above issues and complete the assessment accordingly - ITA No.703/Mum/2011 - - - Dated:- 27-6-2012 - Shri B. Ramakotaiah, And Shri Vivek Varma, JJ. Assessee by: Shri P.K. Parida and Smt. Sanjukta Chowdhary Department by: Shri A.K. Modi O R D E R Per B. Ramakotaiah, A.M. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) it was contended that assessee was only in the business of arranging the trucks which comes from North India to offload goods in and around Mumbai and assessee directs the said lorry drivers to parties whose goods are to be transported out of Mumbai. It was further explained that assessee is only a conduit and he gets commission only in the process. It was further contended that assessee is not a contractor and he has no control over the truck owners. Hence there is no obligation to show the entire receipts in the books. It was further submitted that assessee is not liable to deduct tax under section 194C since they are only truck drivers and not sub contractors. Since number of truck owners/drivers involved, he could not provide PAN, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods safely to its destination nor there is any agreement either oral or written undertaking from transporters on behalf of the clients. However, for record purpose, transporters gave commission to assessee after deducting the TDS and after clearing the necessary payments to the truck drivers in cash and showed commission income in the Profit Loss A/c. It was further submitted that it is very difficult to keep track of truck drivers and therefore, difficulty in producing them before AO. It is further submitted that assessee is not required to make any TDS in the payments made towards diesel expenses, food expenses of the drivers, repair expenses etc, and as there is nothing to show more than one trip by the same truck owner, TDS prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... freights as per the register aggregates to Rs.1,72,39,660/-. There is no finding either by AO or by the CIT (A) about the exact nature of assessee s business. AO considered the entire freight receipts as that of assessee s and rejected the books of account and brought to tax the gross amount without allowing lorry freight paid. The reason for disallowing the freight payment was that assessee was not able to furnish the details of payments. The CIT (A) while upholding the receipt was of the view that assessee is a Contractor and since he has entered into sub contract business with the truck owners and also paid amounts exceeding Rs. 50,000/- in an year confirmed the amount to the tune ofRs. 1,16,38,870/-. We are afraid we cannot uphold th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef holding that there are payments to some truck owners exceedingRs. 50,000/-. We are unable to appreciate either of these in the absence of any evidence about the exact nature of assessee s business. The contention that assessee is not doing any transport business in its name has to be examined as there is deduction of tax by the transporters. Asessee s gross receipts are based on both TDS certificates as well as freight register. Therefore, the exact nature of business undertaken by assessee has to be verified. Further whether mere arrangement of trucks resulted in any contract is to be examined as AO has not invoked the provisions of section 194C nor disallowed amounts u/s 40(a)(ia). Assessee is also contending that there is no outstandi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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