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TMI Blog2019 (3) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... ractors or agents, in the interest of justice and equity, we are of the view that the matter needs to be examined afresh by the AO. The assessee shall produce necessary evidences that the payment was made to contractors, who are in the business of plying of vehicles, goods carriages etc. and not to agents as alleged by the Assessing Officer - Decided in favour of revenue for statistical purposes. Disallowance being employees’ contribution to PF and ESI u/s 36(1)(va) - payment was made within the due date specified u/s 139(1) - HELD THAT:- The Hon’ble jurisdictional High Court in the case of Merchem Limited (2015 (9) TMI 560 - KERALA HIGH COURT) had categorically held that employees’ contribution to PF and ESI, if not paid within the due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed in view of the provisions of section 194C of the I.T.Act. The relevant finding of the A.O. reads as follows:- Perusal of submissions and ledger accounts showed that the assessee has failed to deduct tax at source on payments to the tune of ₹ 1,17,36,529/- made to Vehicle Booking Agents who have arranged vehicles for the company on a contractual basis as and when required. As no tax has been deducted at source from the said payments as required under section 194C of the I.T.Act, 1961, the same is disallowed as per the provisions of section 40(a)(ia) of the Income Tax Act, 1961. 3.1 Aggrieved by the assessment order, the assessee filed appeal to the first appellate authority. The contentions raised before the CIT(A) reads ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant finding of the CIT(A) reads as follows:- 5.4 I have gone through assessment order and submission of the appellant. The Assessing Officer has made this disallowance in a mechanical routine manner without making any inquiry or giving an opportunity to the assessee of explaining his stand. Had the Assessing Officer confronted the assessee, it would be known that provisions, as applicable from 01.10.2009 have not been violated by the assessee. Submission of the assessee in this respect is self-explanatory. Declarations have been obtained by the assessee from all the three parties along with this PAN. In view of these facts, the disallowance made cannot be sustained and the addition is deleted. These grounds of appeal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yments. It is not clear whether payments are made to contractors, who are in the business of plying, leasing of goods carriages etc., or to the vehicle booking agents. The Assessing Officer in the impugned order stated that the payments are made to vehicle booking agents. If expenditure is incurred for vehicle booking agents, provisions of section 194C would have application and the assessee ought to have deducted tax at source. Only on perusal of the agreement one can determine whether the expenditure was incurred for payments to the contractors or to the vehicle booking agents. There is no material on record to determine whether expenditure was incurred for payment to contractors, who are in the business of plying, hiring or leasing go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to PF and ESI amounting to ₹ 54,91,753. The CIT(A) also referred to the judgment of the Hon ble High Court of Rajasthan in the case of CIT v. Rajasthan State Beverages Corporation Pvt. Ltd. [(2017) 250 Taxman 0016] . The SLP filed by the Revenue against the judgment of the Hon ble Rajasthan High Court was dismissed by the Hon ble Apex Court. 4.2 The Revenue being aggrieved, has filed the present appeal before the Tribunal. The learned Departmental Representative submitted that the issue in question is squarely covered by the judgment of the Hon ble jurisdictional High Court in the case of CIT v. Merchem Limited [(2015) 378 ITR 443 (Ker.)] . The learned AR, on the other hand, reiterated the submissions made before the Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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