M/s. D.P.Jain & Co., Nagpur V. Dy.Commissioner of Income-Tax,Circle-8, Nagpur

ITA 170/NAG/2010

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3035 (ITAT-NAGPUR)
• Duration Of Justice: 8 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 10-11-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K JOHN VIKRAM
• Assessee Lawyers: R V LOYA
• Keywords: TDS
• Section: 40(a)(ia); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D. T. GARASIA, HONBLE JUDICIAL MEMBER I.T.A. NO.170/NAG/10 ASSESSMENT YEAR: 2005-2006 M/S D. P. JAIN & CO., VS. DY. C.I.T., C/O M/S LOYA BAGRI & CO., CIRCLE-8, CHARTERED ACCOUNTANTS, NAGPUR. GANDHIBAGH, NAGPUR. PAN:AAAFD6151F (APPELLANT) (RESPONDENT) I.T.A. NO.175/NAG/10 ASSESSMENT YEAR: 2005-2006 DY. C.I.T., VS. MS/ D. P. JAIN & CO., CIRCLE-8, NAGPUR. NAGPUR. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R. V. LOYA, C. A. REVENUE BY : SHRI K. JOHN VIKRAM, D. R. DATE OF HEARING :17/10/2012 DATE OF PRONOUNCEMENT :07/12/2012 ORDER PER D. T. GARASIA: THESE TWO APPEALS, ONE BY THE ASSESSEE AND ONE BY THE DEPARTMENT ARE FILED AGAINST THE ORDER OF CIT(A)-II, NAGPUR FOR THE ASSESSMENT YEAR 2005-2006. 2. IN ITS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: I.T.A. NO. 170 & 175/NAG/2010 2 1. THAT THE LEARNED ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN DISALLOWING CLAIM OF EXPENDITURE OF LABOUR PAYMENTS OF RS.14,65,927/- BY INVOKING PROVISIONS OF SECTION 40(A)(IA) OF THE I.T. ACT. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ACTION OF THE ASSESSING OFFICER IN TREATING THE LABOUR AS AGENT/SUB CONTRACTOR IS CONTRARY TO FACTS AVAILABLE ON RECORD AND HENCE THE ADDITION IS UNJUSTIFIED BEING WITHOUT ANY EVIDENCE AND THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER. 2. THAT THE LEARNED ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN CONSIDERING THE EXPENDITURE BELOW RS.20,000/- ON EACH LABOUR PAYMENTS AS COVERED U/S 194C OF THE I.T. ACT. ON THE FACTS AND CIRCUMSTANCE3S OF THE CASE, THE ACTION OF THE ASSESSING OFFICER IS WITHOUT CONSIDERING THE EXPLANATION OF THE ASSESSEE AND THE PROVISIONS OF LAW AND, THEREFORE, ADDITION OF RS.14,65,927/- IS UNJUSTIFIED AND THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER. 3. THAT THE LEARNED ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN DISALLOWING RS.6,00,598/- OUT OF LABOUR PAYMENTS OF RS.1,55,88,395/- AND THE LEARNED CIT(A) ERRED IN MAINTAINING THE DISALLOWANCE AT 2.5% AGAINST THE 5% ON THE BASIS OF HON'BLE I.T.A.T. DECISION. THE LEARNED AUTHORITIES HAVE ERRED ON FACTS AND IN LAW IN NOT TAKING INTO CONSIDERATION THE RESULTS OF THE YEAR WHICH ARE FAR BETTER THAN PREVIOUS YEARS. THE AUTHORITIES SHOULD APPRECIATED THAT THE FACTS OF THE EACH ASSESSMENT YEAR ARE DIFFERENT. 3. IN ITS APPEAL, THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN DELETING THE DISALLOWANCE OF FREIGHT PAYMENT OF RS.18,50,560/- MADE U/S 40(A)(IA). 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN INTERPRETING THE CIRCULAR NO. 715 OF CBDT DATED 08/08/1995 WHICH CLARIFIES THAT IF THERE IS A CASE OF CONTI8NUOUS CONTRACT FOR SPECIFIC PERIOD OR QUANTITY THEN ALL THE GRS. RELATING TO THAT PERIOD SHALL BE AGGREGATED FOR THE PURPOSE OF TDS. I.T.A. NO.170/NAG/2010 4. GROUND NO. 1 AND 2 OF THE ASSESSEES APPEAL ARE INTER-CONNECTED, THEREFORE, THESE GROUNDS ARE DECIDED TOGETHER. THE SHORT FACTS RELATED TO THESE GROUNDS ARE 2 I.T.A. NO. 170 & 175/NAG/2010 3 THAT THE ASSESSING OFFICER HAS VERIFIED BILLS AND VOUCHERS OF VARIOUS PAYMENTS ON THE SIDES WHERE THE CONSTRUCTION ACTIVITY WAS IN PROGRESS. THE PAYMENT TO LABOURERS WERE MADE THROUGH A SINGLE CONTACT PERSON BY THE ASSESSEES EMPLOYEE. THE ASSESSEE HAS MADE LABOUR PAYMENTS TO AN AGENT AND NOT TO THE LABOUR DIRECTLY AND SUCH AGENTS BY IMPLICATION BECAME A SUB CONTRACTOR, THEREFORE, THE ASSESSEE WAS ASKED TO FURNISH THE DATA CONTAINING ALL SUCH INSTANCES OF PAYMENTS MADE TO VARIOUS CONTACT PERSONS THROUGH ITS EMPLOYEE ACROSS THE SITES. THE ASSESSING OFFICER FOUND THAT IN FOLLOWING INSTANCES, SUCH PAYMENTS TO AGENTS BEFORE 01/02/2004 EXCEEDED RS.20,000/- AND SUCH PAYMENTS EXCEEDED RS.50,000/- WITH AMENDED PROVISIONS OF SECTION 194C, WHICH READ AS UNDER: PAYMENTS TO AGENTS EXCEEDING RS.20,000/- UPTO 30/09/2004 S.NO . NAME OF THE AGENT AMOUNT (RS) 1. JAGMOHAN SINGH 40,000 2. T. RAMARAVA 24,000 3. BALU PERU 43,250 4. AMIR BAKSHI 22,250 5. PRLLAIB 27,901 6. KRISHNA MISTRI 26,240 7. P. NATRAJAN 51,400 8. HUSAIN MISTRI 26,718 9. DILIP GHADGE 45,829 10. CHINNAPPEL 37,450 11. ARBAJ PATHAN KHAN 45,335 12. DIALAU APPU 38,116 13. ALI MIYA JAVED 38,700 14. DENERU PILLEY 25,600 15. D. VENTAKESH 44,266 16. RAMLAL 38,400 17. AKABAR BADSHAH 66,217 18. M. V. NARSIM RAO 32,400 19. S. M. MISHRA 28,286 20. KARIM MISTRI 30,150 21. MALLIKARYUN 30,000 22. HANUMANTH MISTRI 47,542 23. SUDHANSU 21,000 TOTAL 8,31,050 3 I.T.A. NO. 170 & 175/NAG/2010 4 PAYMENTS TO AGENTS EXCEEDING RS.50,000/- UPTO 31/03/2005 S.NO . NAME OF THE AGENT AMOUNT (RS) 1. MADHU MOHAN 1,01,678 2. MADHU MISTRI 59,950 3. S. KRISHNA 95,995 4. SAI RAM 59,795 5. S. P. REDDY 52,465 6. P. NATRAJAN 51,400 7. RAMANNA 2,13,594 TOTAL 8,31,050 THEREAFTER THE SHOW CAUSE NOTICE WAS GIVEN AND IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE CONTENDED THAT THE DETAILS OF PAYMENTS, WHICH ARE MADE TO VARIOUS PERSONS, ARE DEBITED TO PETTY CONTRACTOR ACCOUNT AND SUCH PAYMENTS DO NOT EXCEED RS.50,000/- AFTER 01/10/2004. AS REGARDS TO OTHER PAYMENTS, WHICH WERE MADE BEFORE 01/10/2004, THE PAYMENTS TO SUCH PERSONS ARE BELOW RS.20,000/-, THEREFORE, THE ASSESSEE IS NOT REQUIRED TO DEDUCT TAX AT SOURCE. AFTER CONSIDERING THE CONTENTION OF THE ASSESSEE, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE IS LIABLE TO DEDUCT TAX AT SOURCE, THEREFORE, HE DISALLOWED THE AMOUNT OF RS.14,65,927/-. 5. THE MATTER WAS CARRIED TO CIT(A) AND THE CIT(A) HAS DISMISSED THE APPEAL BY OBSERVING AS UNDER: 7.1 I FIND THAT THE ASSESSING OFFICER HAS RIGHTLY CONSIDERED THE CASE AS PAYMENTS TO VARIOUS AGENTS. IT IS NOT THE ASSESSEES CASE THAT LABOURERS ARE BEING PAID DIRECTLY. THE ASSESSING OFFICER HAS ONLY CONSIDERED PAYMENTS WHERE THE AMOUNTS EXCEEDED RS.20,000/- PRIOR TO 01/10/2004 AND EXCEEDED RS.50,000/- AFTER 01/10/2004. THE PROVISIONS OF SECTION 194C ARE ATTRACTED AS THE DEFINITION OF WORK INCLUDES SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK. AS POINTED OUT BY THE ASSESSING OFFICER, PAYMENTS CAN BE SAID TO BE MADE IN PURSUANCE OF A CONTRACT BEING MADE 4 I.T.A. NO. 170 & 175/NAG/2010 5 ROUTINELY OVER A PERIOD OF TIME FOR PROVISION OF LABOUR. EVEN THOUGH THAT THERE MAY EXIST NO CONTRACT REDUCED IN WRITING, THE ANALYSIS OF THE DATA BY THE ASSESSING OFFICER ESTABLISHES THAT THE ASSESSEE IS LIABLE TO DEDUCT TAX ON PAYMENT TO PETTY CONTRACTORS ON ACCOUNT OF LABOUR. ADDITION ON THIS ACCOUNT IS SUSTAINED. ASSESSING OFFICER MAY VERIFY WHETHER PAYMENT TO MR. P. NATARAJAN ON THE SAME DATE FOR THE SAME PURPOSE AND AS PER THE SAME BILL AND ALLOW RELIEF OF RS.50,000/- IF FOUND CORRECT. ADDITION OF RS.14,65,927/- U/S 40A(IA) IS SUSTAINED. THIS GROUND DISMISSED. 6. THE LEARNED A. R. SUBMITTED THE DETAILED LABOUR PAYMENTS BEFORE US BY WAY OF PAPER BOOK PAGE NO. 1 TO 4 AND SUBMITTED THAT EACH PAYMENT IS BEFORE 30/09/2004 AND DOES NOT EXCEED RS.20,000/- TO EACH CONTRACTOR AND THEY ARE NOT SUB-CONTRACTOR OF THE ASSESSEE. HE HAS ALSO SUBMITTED THE COPY OF LABOUR PAYMENTS WHEREIN EACH PAYMENT DOES NOT EXCEED RS.50,000/- AFTER 01/10/2005, THEREFORE, SECTION 194 IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THE LEARNED A. R. FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT APPOINTED SUB-CONTRACTOR OR AGENT FOR PAYMENT TO LABOURERS, THEREFORE, SECTION 194 IS NOT APPLICABLE TO THE LABOUR PAYMENTS. THE LEARNED A. R. SUBMITTED THAT THE DETAIL OF PAYMENT MADE TO LABOURERS AND PETTY CONTRACTOR AND THE EXPENDITURES ARE SUPPORTED BY VOUCHERS WHICH CONTAIN NAME OF PERSONS, DATE, AMOUNT PAID AND THE NAME OF THE SITE. THE LABOUR PAYMENTS WERE MADE DIRECTLY FROM OFFICE WHO ARE THE EMPLOYEE OF THE FIRM. THERE IS NO AGENT APPOINTED BY THE FIRM NOR ANY AGENT ENGAGED FOR SUPPLY OF LABOURS. THE DETAILS OF PAYMENTS MADE TO SUPERVISOR IS ALSO SUBMITTED AND VERIFIED FROM THE VOUCHERS AND ENTRIES OF BOOKS OF ACCOUNT. EACH PAYMENT IS BELOW RS.20,000/- AND THERE IS NO CONTRACT WITH SUCH LABOURERS FOR CONTINUOUS WORK. THERE IS NO PAYMENTS TO LABOURERS EXCEEDING RS.50,000/- BETWEEN 01/04/2004 AND 31/03/2005, THEREFORE, IT MAY BE ALLOWED. 7. ON THE OTHER HAND THE LEARNED D. R. RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSEE HAS SUBMITTED THE COPY OF DETAIL OF PAYMENT MADE TO PETTY CONTRACTORS WHOSE NAMES ARE 5 I.T.A. NO. 170 & 175/NAG/2010 6 GIVEN IN ASSESSMENT ORDER FOR ASSESSMENT YEAR 2005-2006 AND THE PAYMENTS MADE TO AGENTS ARE EXCEEDING RS.20,000/- WHEREIN THE TAX HAS BEEN DEDUCTED BUT THIS PAYMENT IS BELOW RS.20,000/- AND IT IS A SEPARATE WORK, THEREFORE, IT SHOULD BE ALLOWED BUT WE ARE OF THE VIEW THAT THE ASSESSING OFFICER SHOULD VERIFY ALL THESE PAYMENTS, WHICH ARE SUBMITTED ON PAGE NO. 1 TO 4 OF THE PAPER BOOK, WHETHER ALL THESE PAYMENTS WERE MADE TO LABOURERS DIRECTLY. THE ASSESSING OFFICER SHOULD VERIFY THE VOUCHERS CONTAINING NAME OF PERSON, DATE, AMOUNT AND NAME OF SITE AND IF THE PAYMENTS MADE TO LABOURERS WERE MADE DIRECTLY FROM THE OFFICE OR THROUGH SUPERVISORS WHO ARE EMPLOYEE OF THE FIRM AND IF THE AMOUNT IS BELOW RS.20,000/- UPTO 30/09/2004 IF SHOULD BE ALLOWED AFTER DUE VERIFICATION AND IF THE PAYMENT IS EXCEEDING RS.50,000/- BETWEEN 01/10/2004 TO 31/03/2005, THE ASSESSING OFFICER SHOULD VERIFY AND DECIDE THE MATTER AFRESH AS PER THE DOCUMENTS SUBMITTED IN THE PAPER BOOK AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 9. THE SHORT FACTS RELATED TO GROUND NO. 3 ARE THAT THE ASSESSEE HAS MADE CASH PAYMENT TO PETTY CONTRACTORS FROM OFFICE AT RS.46,19,690/-, CASH PAID TO PETTY CONTRACTORS BY DEBITING THEIR LEDGER ACCOUNTS RS.23,450/- AND PAYMENTS MADE THROUGH SUPERVISORS AT VARIOUS SITES TO VARIOUS PETTY CONTRACTORS AT RS.73,68,820/-. THUS, THE TOTAL PAYMENT WAS RS.1,20,11,960/- AND OUT OF THIS 5% WAS DISALLOWED ON THE GROUND THAT IT WAS MADE THROUGH CASH AND EXPENSES WERE UNPROVED AND UNVOUCHED AND INFLATION OF EXPENSES TO SUPPRESS BUSINESS PROFIT, THEREFORE, THE ASSESSING OFFICER HAS DISALLOWED THE SAME. 10. THE MATTER WAS CARRIED TO CIT(A) AND THE CIT(A) HAS RESTRICTED THE DISALLOWANCE TO 2.5% OF TOTAL PAYMENT. 11. THE LEARNED A. R. SUBMITTED THAT THE ASSESSEE HAS SUBMITTED THE DETAILS OF LABOUR PAYMENTS. THE VOUCHERS FOR LABOUR PAYMENTS WERE CATEGORICALLY MENTIONED NAME, AMOUNT, DATE, NAME OF THE SITE AND NATURE OF WORK. THE ADDRESS AND PAN NUMBERS OF LABOURERS ARE NOT AVAILABLE AS THE LABOURERS ARE MIGRATORY AND DO NOT 6 I.T.A. NO. 170 & 175/NAG/2010 7 HAVE PERMANENT PLACE OF RESIDENCE. THE SITE OF WORK IS ALSO AT REMOTE PLACES. THE ACKNOWLEDGEMENT OF PAYMENTS IS TAKEN ON VOUCHERS OF THE FIRM AS THE BILLS ARE NOT AVAILABLE. THE PAYMENTS ARE MADE AS PER THE WORK PERFORMED ON LUMP SUM BASIS. THE ASSESSING OFFICER HAS NOT POINTED OUT ANY DISCREPANCY IN THE VOUCHERS. THE GROSS PROFIT DURING THE YEAR IS 15.26% AGAINST 11.75% OF THE IMMEDIATELY PRECEDING YEAR AND, THEREFORE, THERE IS NO QUESTION OF INFLATION. 12. ON THE OTHER HAND, THE LEARNED D. R. RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE CIT(A) HAS FOLLOWED THE ASSESSEES OWN CASE OF I.T.A.T. NAGPUR BENCH AND FOLLOWING THE DECISION HE HAS SUSTAINED THE DISALLOWANCE AT 2.5% OF THE TOTAL LABOUR PAYMENTS. DURING THE COURSE OF HEARING, LEARNED A. R. DID NOT BRING ANY CONTRARY FACTS. THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-2005, WE DISMISS THE APPEAL OF THE ASSESSEE. AS A RESULT, THIS GROUND OF ASSESSEE IS DISMISSED. I.T.A. NO.175/NAG/2010 14. THE ASSESSING OFFICER HAS VERIFIED THE PROFIT & LOSS ACCOUNT OF THE ASSESSEE AND FOUND THAT THE ASSESSEE HAS MADE PAYMENT UNDER VARIOUS HEADS AS MATERIAL TRANSPORTATION CHARGES. THE ASSESSING OFFICER HAS VERIFIED THE STATEMENT AND FOUND THAT THE ASSESSEE HAS PAID THE AMOUNT OF RS.18,50,560/- PRIOR TO 01/10/2004 TO 17 PARTIES AND CUMULATIVE VALUE PER PARTY WAS MORE THAN RS.20,000/- PRIOR TO 01/10/2004, THEREFORE, THE ASSESSING OFFICER HAS DISALLOWED THE SAID AMOUNT U/S 40(A)(IA) OF THE ACT. THE ASSESSEE CONTENDED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE HAS PAID MATERIAL TRANSPORTATION CHARGES TO TRANSPORTERS OR LORRY OPERATORS FOR TRANSPORTATION OF MATERIAL LIKE CEMENT, SAND ETC. FROM ONE SITE TO ANOTHER SITE. THERE IS NO PAYMENT WHEREIN THE PAYMENT IS ABOVE RS.20,000/-, THEREFORE, THE ASSESSEE IS NOT LIABLE TO DEDUCT TDS ON SUCH PAYMENTS BUT THE ASSESSING OFFICER 7 I.T.A. NO. 170 & 175/NAG/2010 8 FOUND THAT THE PAYMENT IS ABOVE RS.20,000/-, THEREFORE, THE AMOUNT OF RS.18,50,560/- WAS DISALLOWED U/S 40(A)(IA) OF THE ACT. 15. THE MATTER WAS CARRIED TO THE CIT(A) AND CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER: 6. THIS GROUND IS AGAINST THE DISALLOWANCE OF RS.18,50,560/-, WHICH IS INCLUDED UNDER THE HEAD MATERIAL TRANSPORTATION CHARGES. THE APPELLANT HAS STATED THAT PAYMENT TO 17 PARTIES PRIOR TO 01/10/2004 WAS BELOW RS.20,000/-. ASSESSING OFFICER HAS HELD THAT THE TRANSPORTATION OF GOODS WAS ON A CONTINUOUS BASIS. ASSESSING OFFICER HAS SUBSTANTIATED HIS FINDING BY ILLUSTRATING PAYMENTS TO 3 PARTIES VIZ., B. J. REDDY, G. S. REDDY AND JCPN INDUSTRIES PVT. LTD. ASSESSING OFFICER HAS SAID THAT THE TRANSPORTATION OF MATERIAL BY ALL THESE PARTIES WAS ON A CONTINUOUS BASIS AND ALTHOUGH THERE WAS NO WRITTEN CONTRACT THERE EXISTS A CONTRACTUAL RELATIONSHIP BETWEEN THE APPELLANT AND ITS TRANSPORTERS. IT IS SEEN THAT WHILE THE ASSESSING OFFICER HAS NOTED THE DATES AND BILL AMOUNTS IN THE ORDER HE HAS NOT MADE ANY ATTEMPT TO ESTABLISH THAT THERE WAS A CONTRACT OF TIME, RATE OR QUANTITY. THE A.R. OF THE APPELLANT HAS STATED THAT THERE WAS NO CONTINUOUS ACTIVITY AND THAT EACH G. R. IS TO BE CONSIDERED AS A SEPARATE CONTRACT AS PER BOARDS CIRCULAR 715 DATED 08/08/95. THE A. R. OF THE APPELLANT HAS ALSO STATED THAT TRANSPORTERS ARE ENGAGED AS PER THE NEED OF THE APPELLANT AT A PARTICULAR POINT OF TIME. APPELLANT HAS STATED THAT PAYMENT MADE TO THE TRANSPORTERS IS AS PER AVAILABILITY OF FUNDS AND EACH CREDIT FACILITY ENJOYED BY THE ASSESSEE. APPELLANT HAS ALSO RELIED ON THE DECISION OF HON'BLE TRIBUNAL, BOMBAY BENCH IN THE CASE OF INCOME TAX OFFICER VS. BHORUKA ROAD LINES LTD. 115 TTJ 383 (MUM) AND CITY TRANSPORT CORPORATION VS. INCOME TAX OFFICER 13 SOT 479 (MUM). IT IS SEEN THAT THE ASSESSING OFFICER HAS NOT CONTROVERTED THE FACTUAL CLAIMS MADE BY THE ASSESSEE. ASSESSING OFFICER HAS WHILE DISTINGUISHING THE DECISION OF THE HON'BLE I.T.A.T. BOMBAY BENCH IN CITY TRANSPORT CORPORATION CITED ABOVE HAS SAID THAT THE FREQUENCY OF TRIPS INDICATES THAT THERE IS A CONTRACT. 6.1 ON PERUSING THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT, I FIND THAT THE ASSESSING OFFICER HAS NOT ESTABLISHED THAT THERE IS ANY CONTINUOUS CONTRACT BETWEEN THE ASSESSEE AND THE TRANSPORTERS. A RECENT DECISION OF PUNJAB & HARYANA HIGH COURT REPORTED IN 322 ITR 594 IN THE CASE OF UNITED RICE LAND REITERATES THE STAND THAT UNLESS A SPECIFIC CONTRACT FOR RATE, TIME OR QUANTITY IS ACTUALLY THERE, LIABILITY OF SECTION 194C WOULD NOT ARISE. THEREFORE, THIS DISALLOWANCE U/S 40(A)(IA) STANDS DELETED. THIS GROUND IS ALLOWED. 8 I.T.A. NO. 170 & 175/NAG/2010 9 16. THE LEARNED D. R. RELIED ON THE ORDER OF THE ASSESSING OFFICER AND ON THE OTHER HAND THE LEARNED A. R. RELIED ON THE ORDER OF CIT(A). 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE CIT(A) HAS HELD THAT ASSESSEE HAS MADE PAYMENTS UNDER THE HEAD MATERIAL TRANSPORTATION CHARGES. THE CIT(A) HAS HELD THAT THE PAYMENTS WERE MADE TO THREE PARTIES VIZ., B. J. REDDY, G. S. REDDY AND JCPN INDUSTRIES PVT. LTD. THE ASSESSING OFFICER HAS TAKEN THE PLEA THAT THE TRANSPORTATION OF MATERIAL BY ALL THESE PARTIES WAS ON CONTINUOUS BASIS BUT THERE WAS NO WRITTEN AGREEMENT, THEREFORE, WHEN THERE IS NO WRITTEN CONTRACT AND WHEN THERE ARE NO CONTINUOUS ACTIVITIES, EACH CONTRACT HAS TO BE CONSIDERED AS SEPARATE CONTRACT AS PER BOARDS CIRCULAR NO. 715 DATED 08/08/95. THE CIT(A) HAS ALSO RELIED UPON THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT REPORTED IN 322 ITR 594 IN THE CASE OF UNITED RICE LAND. NO CONTRARY DECISION WAS BROUGHT BY LEARNED D. R., THEREFORE, WE ENDORSE THE ACTION OF CIT(A) AND DISMISS THE GROUND TAKEN BY REVENUE. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL OF THE REVENUE IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 07/12/2012) SD/. SD/. ( P. K. BANSAL ) ( D. T. GARASIA ) ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATED:07/12/2012 *CL SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 9 I.T.A. NO. 170 & 175/NAG/2010 10 5. DR. ASSISTANT REGISTRAR 10