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TMI Blog2015 (11) TMI 914X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 2008-09). - - - Dated:- 24-7-2015 - G. C. GUPTA (Vice-President) and INTURI RAMA RAO (Accountant Member) P. K. Sehgal and Utsav Sehgal for the appellant. Smt. Belu Sinha for the respondent. ORDER The order of the Bench was delivered by 1. Inturi Rama Rao (Accountant Member).-This is an appeal filed by the assessee against the order of the learned Commissioner of Income-tax (Appeals), Gwalior dated October 3, 2012 for the assessment year 2007-08. 2. The appellant raised the following grounds of appeal : 1. (a) That the learned Commissioner of Income-tax (Appeals) Gwalior has erred both in law and on facts in upholding the arbitrary and unjust disallowance of ₹ 96,58,950 under section 40(a)(ia) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned Commis sioner of Income-tax (Appeals), Gwalior has erred both in law and on facts in upholding the arbitrary and unjust disallowance of ₹ 2,09,083 made by the Assessing Officer out of salary, telephone and mobile, truck loading and auto expenses, depreciation on cycle and car and miscellaneous expenses, even without pointing out a single instance of any alleged non-genuine or inadmissible expense. (b) That looking to the turnover, nature of expenses and legitimate business needs, the aforementioned expenses being incurred wholly and exclusively for the purposes of the business carried on by the appellant, thus these deserve to be allowed as business expenditure. 3.(a) That the learned Commissioner of Income-tax (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing disallowance of ₹ 96,57,950 under the provisions of section 40(a)(ia) of the Act for not deducting tax on payments made on transportation and disallowances out of expenditure of ₹ 2,09,083 and on account of breakage expenses of ₹ 3,66,285. Being aggrieved by this, the appellant filed an appeal before the learned Commissioner of Income-tax (Appeals), Gwalior who dismissed the same vide his order dated October 3, 2012. Hence, the appellant is before us with the present appeal. 4. Learned counsel for the appellant argued that the Assessing Officer failed to appreciate the provisions of section 194C governing the payments made to the transporters and he further submitted that there is no privity of contract between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and the truck owners. Therefore there is no liability to deduct tax at source in respect of such payments as held by the following judicial pronouncements which are as under : (1) Bhail Bulk Carriers v. ITO [2012] 50 SOT 622 (Mum) ; (2) Mythri Transport Corporation v. Asst. CIT [2010] 1 ITR (Trib) 290 (Visakhapatnam) ; (3) Nasib Singh v. Asst. CIT [2012] 50 SOT 486 (Cuttack) ; and (4) Prashant H. Shah v. Asst. CIT [2012] 52 SOT 69 (Ahd) (URO). 7. This only goes to show that the belief of the appellant that there is no liability to deduct tax at source is bona fide and the issue is not free from doubt. Therefore, in such circumstances, for non-deduction of TDS, no disallowance can be made. 8. Therefore, we hold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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