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TMI Blog2011 (2) TMI 1456X X X X Extracts X X X X X X X X Extracts X X X X ..... noted that the assessee has shown the transport freight receipt of ₹ 95,78,551/- whereas as per form 16A filed from SHV Energy Pvt. Ltd., Avalon Cosmetics and Indian Oil Corporation Limited, the total amount paid or credited by the companies to the assessee was ₹ 1,34,95,598/-. He enquired of the difference. The assessee pointed out that the difference of ₹ 38,00,511/- was because there were outside tankers run by the assessee on freight commission basis during the year under which the assessee has charged only commission from those persons whereas these parties deducted TDS on the full amount of freight paid by them. The amount on which the commission was received by the assessee was ₹ 36,23,872/-. The balance difference of ₹ 1,76,643/- was on account of the fact that the assessee was following the Mercantile System while the parties issued TDS certificates on payment basis. Sometimes amount received is less and sometimes it is higher. The Assessing Officer was of the view that the turnover of the assessee was more than ₹ 40,00,000/- and, therefore, the assessee was under obligation to deduct the TDS on the amount credited or paid to the owners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t filed by the assessee before the Assessing Officer and copy filed before me and find that the freight charged by the assessee on his own trucks and also freight commission account in which the assessee has duly credited the commission charged on the freight from various trucks of the principals plied by the assessee and the freight in respect thereof is directly credited to the account of those principals, who own the truck The amount of commission charged by the assessee and the expenses incurred for plying of those trucks plied on their behalf are debited to their account. I find that as per the system of accountancy followed by the assessee, the assessee was acting as an agent for the principals for whom the trucks were plied by the assessee on their behalf and the commission was charged from them and the freight earned by them was directly credited to their account and debited to the accounts of various companies to whom the bills of freight were issued on their behalf and the commission was charged from principals for plying the trucks is duly credited by the assessee to his Profit Loss account as income. The total commission charged amounted to ₹ 2,50,439/- which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 86 (P H) iii) Datta Digamber Sahakari Kamgar Sansthan Ltd. Vs. ACIT (2002) 83 ITD 148 (Pune) iv) CIT Vs. Sirmour Truck Operators Union (2010) 195 Taxman 62 (HP) v) Govind Singh Mathura vs. ITO, Mathura Appeal No.TDSA No.13/Agra/2007 order dated 06.02.2009 of Agra Bench vi) Mrs. Kavita Chug vs. ITO (2010) 134 TTJ (Kol) 103. 4. We have carefully considered the rival submissions along with orders of the Tax Authorities as well as the various case laws relied on and cited before us. We find that the case of the assessee is duly covered in favour of the assessee by the decision of this Tribunal in the case of Mythri Transport Corporation vs. ACIT, 124 TTJ (Visakha) 970 in which the facts involved are the same. In the said case, the Tribunal has decided the issue in favour of the assessee by holding as under :- 8. We have heard the rival contentions and perused the record. The issue before us may be decided if we answer following question: Whether the vehicles hired by the assessee in execution of the transport contract can be termed as a sub-contract and consequently the assessee is liable to deduct tax from the payment made for such vehicles under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any part of the work undertaken by the assessee. 8.3 (I) The following are the basis of the AO to come to the conclusion that the payment made for hired lorries is a sub-contract payment, liable for TDS under s. 194C(2} of the Act: (a) The assessee has entered into a contract with the parties and all payments are made to the assessee only. (b) The assessee is claiming the total TDS credit for the gross receipt where TDS was deducted. (c) The lorry owners are in no way connected with the party who gives work to the assessee. As the assessee could not manage the work with its own lorries, it took on hire lorries belonging to others on sub-contract to carry out its contract work, for which payment is made by the assessee. There is no contact or relationship of any kind between the client (principal company) and the sub-contractor. (II) Learned CIT(A) has confirmed the order of the AO with following reasonings : (a) The tanker lorries taken on hire were utilized for the purposes of the business of the execution of the contract during the entire contract period. . (b) The tanker lorry owners were paid only after receipt of the bills from the contractee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss lies with it only. Though the passing or liability is not the only criteria to decide about the existence of sub-contract, yet this contention of the assessee read with the liability clauses of the work order, cited above, supports its submission that the individual vehicle owners are simple hirers of the vehicles. 8.6 As per the provisions of s. 194C(2), as explained in para 8.1 supra, the sub-contractor should carry out the whole or any part of the work undertaken by the assessee. The dictionary meaning of the words carry out is to 'carry into practice'; 'to execute'; 'to accomplish'. It signifies a positive involvement in the execution of the whole or any part of the main work by spending his time, money, energy, etc. and further taking the risks in carrying on the said activity. In the instant case, there is no material to suggest that the other lorry owners involved themselves in carrying out any part of the work undertaken by the assessee by spending their time, energy and by taking the risks associated with the main contract work. In the absence of the abovesaid characteristics attached to a subcontract in the instant case, the payment mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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