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TMI Blog2018 (8) TMI 1357X X X X Extracts X X X X X X X X Extracts X X X X ..... engaged the services of transporter to carry the goods. From the above facts, there is no express or implied contract between the assessee and the transporter. It is a case of engaging the transporters by the supplier and supply the goods to the assessee. Therefore, there is no case for deduction of tax at source u/s 194C. Once it is established that the assessee does not require to deduct the tax at source, there is no case for disallowance u/s 40(a)(ia) of the Act. - Decided in favor of assessee. - I.T.A.No.428/Viz/2014 - - - Dated:- 25-7-2018 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER For The Appellant : Shri G.V.N.Hari, AR For The Respondent : Shri K. C. Das, DR ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the supplier. Therefore, there is no contract between the transport contractor and the assessee, hence the provisions of section 40(a)(ia) is not applicable. The AO was of the view that since the assessee has made the payment towards the transportation, there is an implied contract and the assessee has violated the provisions of section 40(a)(ia) of act, accordingly disallowed the expenses of ₹ 2,25,452/- u/s 40(a)(ia) of the Act. The assessee went on appeal before the CIT(A) but did not succeed in appeal. 4. Aggrieved by the order of the CIT(A), the assessee is in appeal before the Tribunal . 5. We have heard both the parties and perused the material placed on record. The revenue s case is that since the assessee has made the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is a case of engaging the transporters by the supplier and supply the goods to the assessee. Therefore, there is no case for deduction of tax at source u/s 194C. Once it is established that the assessee does not require to deduct the tax at source, there is no case for disallowance u/s 40(a)(ia) of the Act. On the similar facts, the ITAT Visakhapatnam bench in ITA No.310/Viz/2013 for the assessment year 2008-09 has taken a similar view following the decision of this Tribunal in the case of Chandana Brothers Vs. ACIT in ITA No.85 and 86/Viz/2009 dated 03.05.2013. For ready reference, we extract relevant part of the order of this Tribunal which reads as under : 7. In our view, the parties to a contract have to be determined on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to such receipts/bills. It is immaterial that the appellant never directed the suppliers to dispatch goods through a particular transporter or that the supplier of goods entrusted the job of transportation of the appellant's goods to various transporters depending upon the Willingness and readiness of a particular transporter at the given point of time to transport the goods of the appellant at a cost agreeable to the appellant, since, eventually, a particular transporter delivers goods at the appellant's premises and the appellant pays the freight charges to the representative of the transporter (whether the driver or anybody else) in connection with such delivery of goods...... Hence, there does exist unambiguous contractual r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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