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TMI Blog2015 (10) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... -contractor to the assessee and as soon as Mr. Suresh enters into sub-contract with the assessee, the assessee’s case comes under the purview of sec. 194C(1) of the Act. Thereafter, it is not required to see whether the assessee paid charges to the transporter or not. The activity carried on by Mr. Suresh on behalf of the assessee will be simply an activity of transportation of cylinders by truck and the assessee is liable to deduct TDS. With regard to payment made to Mr. Suresh, the Ld. AR tried to impress the Bench by stating that the payment has been made to various truck owners which less than ₹ 1,20,000/- to each transporters. The material brought on record suggest that the assessee made payment of ₹ 1,29,84,892/- to Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire transportation expenses u/s 40(1)(ia) of the act and added to the income returned by the assessee. 2.1 On appeal before the CIT(A), the CIT(A) allowed the appeal of the assessee by following the decision of the Tribunal in the case of Cee Pee Granites P Ltd vs ACIT in ITA Nos 400 and 401/coch.2011 dated 14.9.2012 for the AY 2006-07 which followed the decision rendered by the Special Bench, ITAT Vishakapatnam Bench in the case of M/s Merilyn Shipping Transports reported in 136 ITD 23 against which the department filed appeal before the Tribunal and the Tribunal vide order dated 7.6.2013 in ITAT No. 29/Coch/2013 for the AY 2009-10 held that; In view of the decisions rendered by the Hon ble High Courts of Calcutta and Gujara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000/- and the details were furnished to the lower authorities As per the salary dentils, Suresh has paid salary of ₹ 94,500/-. Suresh is not a contractor, but he is an employee of the assessee and who is charge of transportation operation. 2.3 He has referred the clause no.,9 of the agreement with HPCL, which reads us under: Clause No. 9 Subletting: The transporter shall not sublet any work entrusted to him except with the written consent of the Corporation. 2.4 He submitted that in the above circumstances no sub contract for subletting of the transport operation is given to any person as per the agreement. The assessee is not liable for deducting tax at source, since the assessee has entered in to contract with HPCL and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld AR, the provisions of section 194(1) is applicable which is accepted by the AO in the remand report and the CIT(A) view that provisions of sec 194C is applicable. He submitted that the payment to each party is less than ₹ 1,20,000 per annam. Even it is presumed that section 194C is applicable, the payment is only ₹ 1.20 lacs to each transporters, therefore, the assessee is not liable for deduction of TDS for which the assessee failed to do. 2.9 On the other hand, the Ld. DR submitted that the assessee has paid ₹ 1,29,84,892/- towards transport expenses to one Mr. Suresh on 23 occasions without deducting TDS, Though he was an employee of the assessee, he was entrusted with the transportations of LPG cylinders and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyees of the assessee so as to enable them to make payments to the truck owners/drivers which do not include any other service like loading, unloading or transport contract simpliciter not involving a contract of loading or unloading could not be regarded as a contract for carrying out any work and therefore, no deduction of tax at source is warranted u/s. 194C(1) of the I.T. Act. 3.1 The argument of the assessee s counsel does not have any merit. In the present case, the payment was made by the assessee to Mr. Suresh on various occasions and in turn he has made payment to the truck owners/drivers and the assessee has not furnished any details of the truck owners/drivers to the lower authorities. Moreover, it has always taken a plea t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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