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TMI Blog2007 (7) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 133A was carried out at the business premises of the assessee-company on 21-1-2002. On the basis of material gathered in the course of survey action, the Assessing Officer concluded that the appellant had not deducted taxes properly on payment made to truck owners or agents in accordance with the provisions of section 194C. After taking into consideration the submissions filed on behalf of the assessee, the Assessing Officer passed order under section 201(1) and 201(1A) by treating the assessee to be in default for non-deduction/ short deduction of taxes. The assessee had made total payment of Rs. 17,08,39,119 to various parties whose trucks were engaged for transportation of goods. The Assessing Officer estimated 90 per cent of this payment, which comes to Rs. 15,37,55,207 as payment exceeding Rs. 20,000 each and on this amount he computed tax liability of Rs. 15,68,303 under section 194C at the rate of 1 per cent plus 2 per cent surcharge. The Assessing Officer also levied interest under section 201(1A) of Rs. 1,07,820. While holding that the assessee in default for non-deduction/short deduction of taxes, the Assessing Officer has taken into consideration the statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant during appellate proceedings. The estimation made by the Assessing Officer is not permitted under section 194C. (ii)The various circulars issued by the CBDT as referred to in the appellant's submissions particularly the Circular No. 715 supports the contention of the appellant that each GR has to be treated as a separate contract even though the bill amount is paid in two instalments or there is a single payment of more than one GR. The details furnished by the appellant clearly indicate that there is no running account in the name of any payee whether it is a truck owner or an agent. (iii)Wherever the appellant had a written agreement for a specific period, it has deducted taxes as per law. But, in all those cases, which are covered by this appeal, the appellant had not entered into any specific contract for any specific period or for any specific agreed rate. Therefore, each trip where payment was fully made by way of advance and/or partly after completion of the trip, is a separate contract and since for each such separate contract the transportation charges are less than Rs. 20,000 the same are exempt from tax deduction as per provisions of section 194C(3). 8. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers who helped the assessee in getting the truck hired by which it has been stated that they have no contract with the assessee as they helped to get truck hired only and all the payments are made directly to the drivers or truck owners by the assessee and not through them. It has been clearly certified that they are charging their commission from truckwalas and not from the assessee. Confirmations from some of the suppliers are placed at pages 99 to 103 of the paper book. 5.2 In the confirmation it has been clearly certified by M/s. Satyadevi Roadlines Corporation that "freight is paid by way of advance to driver/owner of the truck and final freight charges is some time paid to us on behalf of truck owners/drivers for making payment by us to them". It has been further certified that "we received our commission from truck owner/driver for the same. We do not receive any commission/brokers on your side". 5.3 Similar certificates are issued by various other suppliers/agents. From the contents of the certificates issued by various agents/suppliers it became crystal clear that no contract was between the assessee and the suppliers but the contract was entered with each truck owner/dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as in the case of lorry owner Shri Barbel Singh for lorry No. HR 11/F-3216 for debit voucher No. 00193 and lorry owner Shri Madarilal of lorry No. HR 37/8621 of debit voucher No. 00216." 5.4 Thereafter in reply to question No. 13, it was again stated that: "M/s. New Bombay Chandigarh Roadways being reference points as the truck was arranged by him." From these replies, it is clearly seen that the trucks were engaged through the parties who were dealing in arranging the trucks and it is also clear from the statement of Shri Rahul Agrawal that no truck contract was entered between the assessee and the agents but the contracts were between the assessee and the truck drivers/owners. It is also seen that no payment exceeding Rs. 20,000 paid to truck owners or drivers and where the payment exceeds Rs. 20,000 the tax has been deducted by the assessee and had deposited in the treasury as per rules. 5.5 The CBDT Circular No. 715, dated 8-8-1995 has clarified under question No. 9 as under: "Q. No. 9 : In the case of payments to transporters, can each GR be said to be a separate contract, even though payments for several GRs are made under one bill? Ans.: Normally each GR can be sai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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