Case Law Details
Brief of the Case: In the case of ITO Vs Bimal Biswas, ITAT of Kolkata set aside the issue to the file of AO and directed the assessee to produce the relevant evidence in respect payees of carriage charges whether they have included the carriage receipts in the respective returns of income and paid taxes on the said income, Accordingly the provision of sec 40(a)(ia) will apply.
Facts of the Case: The Assessee derives income from wholesale egg trading and truck plying business. During the year under consideration i.e. FY 2008-09 relevant to AY 2009-10, the assessee has debited a sum of Rs.44.33 lac on carriage hire charges for hiring of various trucks but did not deduct TDS on the payment of Rs.44.33 lac made to different truck owners for carrying goods. The assessee before the AO contended that there is no contract for carriage of goods between the suppliers and the lorry owners. But the AO was not convinced, and he made disallowance of carriage hire charges for non-deduction of TDS u/s. 194C of the IT Act by invoking provisions of section 40(a)(ia) of the IT Act.
Aggrieved, assessee preferred appeal before CIT(A), who deleted the disallowance by holding that there was not any contract between the truck owners and the assessee whether in written or oral, so the question of TDS on such payment u/s. 194 C of the IT Act cannot arise. Accordingly, the CIT(A) deleted the disallowance.
Aggrieved Revenue appealed before ITAT. The only issue in this appeal of Revenue is against the order of CIT(A) deleting the disallowance of truck hire/carriage payment charges amounting to Rs.44.33 lac for non-deduction of TDS u/s. 194C of the IT Act by the AO thereby invoking the provisions of section 40(a)(ia) of the IT Act. For this, Revenue has raised following three grounds:
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