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TMI Blog2014 (1) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 194C of the Act are applicable in the assessee's case consequently attracting the provisions of section 40 (a) (ia) of the Act – Decided against Revenue. Disallowance of payment of incentive to the drivers – Held that:- The decision in Shree Dhain Auto Transport Corporation Versus The Asst. CIT, Circle-5, Vadodara [2012 (9) TMI 730 - ITAT AHMEDABAD] Followed - if an assessee is maintaining accounts on mercantile system and a liability accrued, though discharged at a future date, held to be an allowable deduction while working out the profit and gains - The incurring of the liability was ascertainable for the year under appeal, therefore it is to be satisfied that it was not a contingent liability – Decided against Revenue. - I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 153A of the Act requiring him to furnish return of income in response to which the assessee filed its return of income u/s 153A on 03-03-2011 and finally assessment was completed by making the above mentioned additions. 3. Since, all these appeals are related to the same assessee and on identical facts; these cases were heard together for passing consolidated order for the sake of convenience. IT (SS) A No.1/Ahd/2013 (Revenue's appeal for AY 2005-06) 4. In this appeal, the revenue has raised the following ground:- "1. The Ld. CIT(A) has erred in law and on facts in deleting the addition made due to disallowance of expenses of Rs.9,23,100/-, which was disallowed u/s. 40(a) (ia) of the I T Act on account of non-compliance of Provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment order passed by the Assessing Officer. 8.1 The AO, a per the provisions of section 40 (a)(ia) of the IT Act, 1961, has disallowed the expenses claimed by the assessee of Rs.9,23,100/- towards freight expenses attracting TDS u/s 194C of the Act and added back to the income of the assessee. It is claimed by the appellant that all the interest payments have been fully paid by the end of the relevant year under consideration and no part is outstanding as payable on the last day of the previous year. Therefore, the provisions of section 40 (a) (ia) of the IT Act, 1961 do not apply to the amount which is actually paid during the previous year in view of the decision of the Hon'ble ITAT Visakhapatnam Bench in the case of Merilyn Shi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court was in favour of the revenue. He further relied on the order of the learned AO and pleaded that the same may be confirmed. The learned AR argued in support of the assessee stating that on merits the provision of section 194C of the Act was not applicable in the case of the assessee, since there was no contract between the assessee and the truck owner for carrying out any work of transportation. 8. We have heard the rival submissions and carefully considered the materials on record. From the facts before us, it appears that the assessee had made payment in aggregate of Rs.50,000/- to various truck owners. The revenue has not brought before us any cogent materials to establish that the assessee had made payment to the truck owners pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from its clients were shown as income. However, the reason cited by the learned AO for making such additions was that this expenditure was contingent in nature because the drivers will be entitled for such payment if they remain with the assessee for a specific period and when the payment was made to the entitled persons. On appeal, the learned CIT(A) following the order of the ITAT Ahmedabad Bench in assessee's own case in ITA No.3289/Ahd/2010 for AY 2007-08 dated 31-07-2012, vide his order dated 25th October, 2012 allowed part relief to the assessee by observing as under in Para 14.1 to 15 of his order as under:- "14.1 As pointed out by the appellant that this issue for AY 2007- 08 has already been decided by Hon'ble ITAT Ahmedabad v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e us. 11. The learned DR supported the order of the learned AO and pleaded that his order may be sustained while as the learned AR relied on the order of the learned CIT(A). 12. We have heard the rival submissions and perused the material on record. This issue has been decided by the Tribunal in favour of the assessee vide order dated 31-07-2012 in assessee's appeal for the assessment year 2007-08 against the order of the learned CIT(A), Baroda u/s 143(3) of the Act dated 16-09-2010 which has been confirmed by the Hon'ble jurisdictional High Court vide order dated 21- 03-2013. The learned CIT(A) in his order u/s 153A read with section 143(3) dated 25-10-2012 has followed the decision of the Tribunal dated 31-07-2012. Therefore, we susta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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