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TMI Blog2017 (6) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO shall give adequate opportunity of hearing to the assessee to give complete details to establish whether the assessee is a transport operator or a transport agent and how much amount has been made per payee during the year to each payee. Appeal filed by the Revenue is treated as allowed, for statistical purposes. - ITA No. 3778/Mum/2015 - - - Dated:- 19-5-2017 - Shri Joginder Singh (Judicial Member) And Shri Ashwani Taneja (Accountant Member) Appellant by : Shri B.S. Bist Respondent by : Shri K Shivram ORDER Per Ashwani Taneja, A. M. This appeal has been filed by the Revenue against the order passed by the Ld.CIT(A)-XXXII, Mumbai dated 20th March, 2015 against the assessment order u/s 143(3) dated 30th March, 2013 for AY 2010-11 on the following grounds:- (1) On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the additions u/s 40(a)(ia) on account of freight charges paid. (2) On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in treating the assessee as Transport Broker / Agent as against Transport contractor as mentioned by the auditor in his Audit report. (3) On the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . I have gone through all the written submissions very carefully and also perused the assessment order and the various documents and evidences and explanations furnished by the appellant. I find merit in the contention made by the appellant that TDS is not deductible in respect of the Freight Charges paid on the reasons and findings given as under: - 4.11. There is no denial of the fact that the business carried on by the appellant is that of Transport Agent/Broker and not of a Transport Operator. This fact bringer more substance to the case when it was pointed out by the AR that the appellant does not possess/own any Truck for plying or carrying on the business of Transport Operator and the main source of Income was Commission Income which was carried on by the appellant for several years. 4.12. The nature of business activities carried or, by the assessee for assessment year under consideration was primarily that of an agent. The gross freight charges paid by the consignors to the assessee were a kind of reimbursement of similar payments made by the assessee to the owners of the transport vehicles engaged. The deduction of tax at source by the consignors from the frei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt being Transport Agent and on the basis of my observations and legal position more specifically explained in the preceding paras 4.10 to 4.15, it is amply clear that no TDS is liable to be deducted on the total Freight Charges of ₹ 6,37,00,780/- so as to call for additions of Freight Charges. 4.17. I think the appellant has a very strong case based on material facts and explanations as above, I would further like to ponder on the fact that the Act has given a more liberal view and amended the section 194C to suit the transport fraternity being an unorganized sector at large, which is discussed in the foregoing paras of mine. 4.18. The AR during the course of assessment proceedings submitted a letter dated 19-03-2013 which is reproduced above states that for the purpose of TDS deductibility in the case of Transport business for the year under consideration has two parts to it, one pertaining to the period 01-04-2009 to 30-09- 2009 and other from 01-10-2009 to 31-03-2010. 4.19. For the period 01-04-2009 to 30-09-2009, the total freight charges were ₹ 3,16,84,130/- and the same is covered tinder second proviso to clause (1) of sub section (3) sec 194C of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s agreed to the fact that details submitted by the appellant had the PAN Numbers quoted too but has made contradictory statements as can be seen from clause 2.4 of the assessment order as under: - I) Assessee has not quoted PAN against all entries. ii) Assessee has not produced books of account. iii) Assessee has mentioned only PAN against payment made but not given name of contractor to whom payment is made...... 4.22. On perusing the assessment order in toto, the AR pointed out that during the year under consideration, there was only on SOLIDATORY TRANSACTION with one truck owner with PAN No. AVOPB0529J having three trucks and the total amount was ₹ 98,380/-. I have decided and come to the conclusion that no addition is called for in respect of non-deductibility of TDS on Freight Charges paid as invoking of section 40(a)(ia) is not applicable in the case of Transport Broker/Agent and is in line with the previous assessment order passed by the AO for A.Y. 2008-09. 4.23. In view of the above, I direct the AO to delete the said addition on account of Freight Charges paid of ₹ 6,37,00,780/- accordingly. 4. Being aggrieved, Revenue is in appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne of the parties before us produced copies of Bilty or any other documentary evidence from where it could be conclusively established whether the assessee acted as the main transport operator or merely as a transport agent. Further, with regard to the claim of the assessee that in each case, wherever the amount of payment in aggregate per payee exceeded ₹ 50,000/-, PAN was provided, it was noted by us that though detailed charts were submitted, but from these charts it was not possible to decipher the aggregate amount of payment made to one person. The charts have been prepared truck number-wise and not person-wise. Under these circumstances, in absence of supporting ledger accounts and in absence of proper re-tabulations of these charts, it is not possible to decide how much payment has been made to a particular person. Under these circumstances, when these queries were put to the Ld. Counsel, he very fairly and gracefully expressed that these issues could be sent back to the AO for verification of proper facts. Thus, under these circumstances, we find it appropriate to send the matter back to the file of the AO where the AO shall give adequate opportunity of hearing to the ..... 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