Shri Palinder Jit Singh, Patiala V. ACIT, Patiala

ITA 470/CHANDI/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90180 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 25-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 30-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Question of law
• Section: 40A(3); 234B; 194C; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 470/CHD/2013 ASSESSMENT YEAR: 2009-10 SHRI PALINDER JIT SINGH, VS THE ACIT, # 584, GUMMAN NAGAR, CIRCLE, SIRHIND ROAD, PATIALA. PATIALA. PAN: AMJPS6100L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SI NGH RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 25.05.2015 DATE OF PRONOUNCEMENT : 27.05.2015 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS) PATIALA DATED 26.02.2013. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSI DERED THE MATERIAL AVAILABLE ON RECORD. 3. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS G ROUND NOS. 3 & 5, SAME ARE THEREFORE, DISMISSED AS NOT PR ESSED. 4. GROUND NO. 6 IS REGARDING CHARGING OF THE INTERE ST UNDER SECTION 234B OF THE INCOME TAX ACT WHICH IS MANDATO RY AND CONSEQUENTIAL. 2 5. THE ASSESSEE ON THE REMAINING GROUNDS OF APPEAL NOS. 1, 2 AND 4 CHALLENGED THE ADDITION OF RS. 2,84,12,239/ - MADE ON ACCOUNT OF NON DEDUCTION OF TAX ON FREIGHT PAYMENTS APPLYING THE PROVISIONS OF SECTION 40(A)(IA) AND 40A(3) OF T HE ACT. IT IS FURTHER CLAIMED THAT ABOVE PROVISIONS ARE NOT APPLI CABLE TO THE FREIGHT PAYMENTS BECAUSE THERE IS NO AGREEMENT/CONT RACT AND THAT ASSESSEE HAS NOT VIOLATED PROVISIONS OF SECTIO N 40A(3) OF THE ACT. 6. THE BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE HA S NOT DEDUCTED TDS ON ACCOUNT OF CARRIAGE PAID AMOUNTING TO RS.2,84,12,239. THEREFORE, PAYMENT WAS HIT BY PROVI SION OF SECTION 194C READ WITH SECTION 40(A)(IA). DURING TH E COURSE OF ASSESSMENT PROCEEDINGS THE APPELLANT SUBMITTED THAT THE COMPLETE MODUS OPERANDI OF ITS BUSINESS IS AS UNDER :- I. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRA NSPORTING GOODS FOR DIFFERENT COMPANIES AS PER AGREEMENTS ENTERED INTO WITH CONTRACTEE COMPANIES. II. THE ASSESSEE DID NOT HAVE SUFFICIENT VEHICLES OF HIS OWN AND HENCE TOOK ON HIRE TRUCKS FROM DIFFERENT PARTIES AND USED THEM IN ITS BUSINESS FOR CARRYING GOODS OF ITS CLIENTS. III. THAT EACH TRIP IS NEGOTIATED WITH THE PERSON IN CON TROL OF THE VEHICLE AT THE TIME OF HIRING/DISPATCH AND HENCE EACH TRANSACT ION IS A FRESH CONTRACT. GR IS ISSUED BY THE ASSESSEE. IV. THE ASSESSEE MADE THE PAYMENTS OF FREIGHT DIRECTLY TO TRUCKER/DRIVER AS PER THE PREVAILING MARKET RATE. V. THERE IS NO AGREEMENT EITHER ORAL OR WRITTEN B ETWEEN THE ASSESSEE AND TRUCKER. VI. THE SINGLE SIDE PAYMENT TO EACH TRUCK DRIV ER/OWNER WAS LESS THAN RS.20,000/-AND ALSO LESS THAN RS.50,000/- QUA AGGRE GATE PAYMENT TO ONE INDIVIDUAL TRUCK OWNER/DRIVER IN A FINANCIAL YE AR (BARRING FEW CASES) AND NO TDS IS DEDUCTIBLE. THE ASSESSEE HAS F ILED FORM NO. 15J IN THE CASES WHERE AGGREGATE PAYMENT EXCEEDED RS.50 ,000.00 DURING THE YEAR UNDER REVIEW. 3 VII. EACH GR, IS A SEPARATE CONTRACT AS ENVISAG ED IN ANSWER TO Q.9 OF CIRCULAR 715 AT. 08.08.1995 ISSUED BY THE CBDT. SECTION 194C AND 40(A)(IA) OF THE I.T. ACT, (1961) ARE NOT APPL ICABLE TO THE CASE OF ASSESSEE. 2. (A) THE PROVISIONS OF SECTION 40(A)(IA) CAN BE INVOKED ONLY WHEN THE PAYMENTS MADE ARE HIT BY THE PROVISIONS OF SECT ION 194C. THE PROVISIONS OF SECTION 194C COME IN PLAY WHERE EITHER A WRITTEN OR ORAL CONTRACT BETWEEN THE PARTIES FOR TRANSPORTATION AND CARRIAGE OF GOODS IS ESTABLISHED. A GR IS EQUIVALENT TO A CONTRACT WHICH IS ENVISAGED FOR THE PURPOSE OF SECTION 194C, IT IS FURTHER TO BE SEEN WHETHER THE CONTRACT IN QUEST ION HAS RESULTED IN PAYMENT EXCEEDING THE PRESCRIBED LIMIT IN A FINANCIAL YEAR. THIS ASPECT HAS ALSO BEEN CLARIFIED SO BY CBDT CIRCULAR NO. 715 DT. 08.08.199 5. AS PER THE SAID CIRCULAR, THE PRE-REQUISITE CONDITION FOR DEDUCTION OF TAX AT SOURCE IS THAT THERE MUST BE A CONTRACT FOR THE CARRIAGE OF GOODS. AS PER THE CB DT CIRCULAR, WHAT IS MOST IMPORTANT IS A CONTRACT FOR A SPECIFIC PERIOD OR QU ANTITY FOR CARRIAGE OF GOODS. AS ALREADY STATED THAT EACH TRIP IS NEGOTIATED WITH THE PERSON IN CONTROL OF THE VEHICLE AT THE TIME OF HIRING/DISPATCH AND HENCE EA CH TRANSACTION IS A FRESH CONTRACT. (B) THE ASSESSEE ALSO INVITES YOUR KIND ATTENTION T O SECTION 194C(3)(I) AND ITS FIRST PROVISO (QUOTE). 3. NO DEDUCTION SHALL BE MADE UNDER SUBSECTION (1) OR SUBSECTION (2) FROM (I) THE AMOUNT OF ANY SUM CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID TO THE ACCOUNT OF, OR TO, THE CONTRACTOR OR SUBCONTRACTOR, IF SUCH SUM DOES NOT EXCEED TWENTY THOUSAND RUPEES. PROVIDED THAT WHERE THE AGG REGATE OF THE AMOUNTS OF SUCH SUMS CREDITED OR PAID LIKELY TO BE CREDITED OR PAID DURING THE FINANCIAL YEAR EXCEEDS FIFTY THOUSAND RUPEES, THE PERSON RESP ONSIBLE FOR PAYING SUCH SUMS REFERRED TO IN SUB-SECTION (10 OR, AS THE CASE MAY BE SUBSECTION (2) SHALL LIABLE TO DEDUCT INCOME TAX (UNDER THIS SECTION :). (UNQUOTE) (C) THE COPY OF THE LEDGER ACCOUNT OF FREIGHT EXPENSES FOR THE PREVIOUS YEAR RELEVANT TO ASSTT. YEAR 2009-10 AS APPEARING IN THE AUDITED BOOKS OF ALREADY PLACED ON RECORD. (D) THE ASSEESSEE HAS MAINTAINED TRUCK WISE/TRIP WISE D ETAILS OF PAYMENTS SO THAT HE IS ABLE TO COMPLY WITH TDS PROVISIONS IN CA SE OF NEED. (E) THE TRUCK WISE/TRIP-WISE ANALYSIS OF THE FRIGHT EXP ENSES IS FURNISHED HEREWITH AS PER ANNEXURE I (PAGE NO. 1-101) & ANNEX URE -II (PAGE NO. 102-103). THE ANALYSIS OF ANNEXURE I CLEARLY SHOWS THAT EVERY SINGLE PAYMENTS MADE ON ACCOUNT OF FREIGHT EXPENSES IS BELOW THE LIMIT O F RS.20,000/- AND RS.50,000/- QUA AGGREGATE PAYMENT TO ONE TRUCK IN T HE FINANCIAL YEAR AND ARE NOT HIT BY THE RIGOUR OF SECTION 194C. 4 THE ANALYSIS OF ANNEXURE II CLEARLY SHOWS EVERY SIN GLE PAYMENT MADE ON ACCOUNT OF FREIGHT EXPENSES IS BELOW THE LIMIT OF R S.20,000/- BUT AGGREGATE PAYMENTS TO ONE TRUCK EXCEEDS RS.50,000.00 IN THE F INANCIAL YEAR. IN THESE CASES THE ASSESSEE HAS SUBMITTED FORM NO.15J IN TERMS OF RULE 29D(3). WE MAY USUALLY REFER TO MEMORANDUM EXPLAINING THE F INANCE (NO.2) BILL, 2004 REGARDING AMENDMENT IN SECTION 194C(3). THE SA ME READS AS UNDER:- 'THE AMENDED SECTION 194C(3)(I) NOW PROVIDES THAT I F THE AMOUNT OF ANY SUM CREDITED/PAID OR LIKELY TO BE CREDITED/PAID TO THE CONTRACTOR/SUBCONTRACTOR DOES NOT EXCEED RS.20,000/- NO TAX IS REQUIRED TO B E DEDUCTED. HOWEVER, IT IS FURTHER PROVIDED THAT IF THE AGGREGATE AMOUNTS OF S UCH SUMS CREDITS/PAID OR LIKELY TO BE CREDITED/PAID THAT DURING THE FINANCIAL YEAR EXCEED RS.50,000/- THE TAX IS REQUIRED TO BE DEDUCTED U/S 194C, 'THE LANGUAGE OF THE ABOVE EMENDED SECTION IS UTTER LY CONFUSING WITH THE APPLICABILITY OF TWO DIFFERENT LIMITS (OF RS.20,000 /- AND RS.50,000/-) PROVIDED THEREIN. TAX WILL BE REQUIRED TO BE DEDUCTED AT SOU RCE WHERE THE AMOUNT CREDITED/PAID TO A CONTRACTOR/SUBCONTRACTOR EXCEED RS.20,000/- IN 'SINGLE PAYMENT' OR RS.50,000/- IN THE AGGREGATE DURING THE FINANCIAL YEAR.' 7. THE ASSESSEE ALSO PLACED RELIANCE ON THE FOLLOWI NG CASE LAWS:- 1) CIT V. UNITED RICE LAND LTD 217 CTR 332 (P & H). 2) ITO V. BHORUKA ROAD LINES LTD. 115 777 383 (MUM). 3) CITY TRANSPORT CORPORATION V. ITO 13 SOT 479 (MUM. ) 4) CIT V. M/S T.L VERMA & CO.(P) LTD.NO. 892 OF 2010 ( P &H). 5) DY. CIT V. NITEN HASMUKHBHAI SHAH ITA NO. 1982 /AHD/2009 AS THE PAYMENTS ARE NOT HIT BY SECTION 194C(3), TH E PROVISIONS OF SECTION 40(A)(IA) SHALL NOT APPLY. IN VIEW OF THE FACTS OF THE CASE AND RELEVANT LAW, THE ASSESSEE MUST HUMBLY REQUEST YOUR HONOUR TO DRO P THE PROPOSAL OF MAKING ADDITION OF RS. 28412239.00. 8. HOWEVER, ONE IMPORTANT ASPECT OF THE CASE AS SEE N FROM THE ASSESSMENT ORDER IS THAT THE ASSESSEE FAILED TO PRODUCE THE GRS FOR VERIFICATION BY THE ASSESSING OFFICER AND O NLY THE GR REGISTER WAS PRODUCED. ON PERUSAL OF THE GR REGISTE R, IT WAS OBSERVED THAT THE ASSESSEE HAS PAID MONEY EXCEEDING RS.20,000/- ON A SINGLE GR IN MANY CASES. THE TOT AL AMOUNT 5 IN SUCH CASES COMES TO RS. 1,62,76,217/. THE A.O. T HEREFORE, DISALLOWED THESE EXPENSES AS THESE ARE DIRECTLY HIT BY THE PROVISIONS OF SECTION 194C READ WITH SECTION 40(A)( IA). AS REGARDING THE BALANCE PAYMENT OF RS.1,21,36,002/-. THE A.O. NOTED THAT THE GRS COULD NOT BE PRODUCED FOR VERIFI CATION. THE A.O. ALSO NOTED THAT THE ASSESSEE CLAIMED DURING AS SESSMENT PROCEEDINGS THAT HE HAD SUBMITTED COPIES OF FORM NO . 15J. HOWEVER, HE COULD NOT PRODUCE THE SAME DURING THE ASSESSMENT PROCEEDINGS. IT WAS ALSO OBSERVED THAT ALL PAYMENT AMOUNTING TO RS. 2,84,12,239/- WAS MADE IN CASH VIOLATING SECTION 40A(3). THE ASSESSING OFFICER AL SO NOTED THAT THE ASSESSEE FAILED TO FILE THE TRUCK OWNER WISE DE TAILS OF THE PAYMENTS MADE. THEREFORE, THE ENTIRE PAYMENT WAS A DDED UNDER SECTION 40(A)(IA) AND FOR VIOLATION OF SECTIO N 40A(4) OF THE ACT. 9. DURING THE APPELLATE PROCEEDINGS REGARDING THE P AYMENT OF RS. 1,62,76,270/- AS IDENTIFIED FROM THE GR REGI STER BY THE ASSESSING OFFICER, THE ASSESSEE SUBMITTED THAT THE UNDISPUTED FACTS WHICH SURFACE FROM LD. ASSESSING O FFICERS ORDER ARE : A. THE AUDITED BOOKS OF ACCOUNTS WERE PRODUCED BEFORE ID. A.O. DURING ASSESSMENT PROCEEDINGS WHICH WERE TES T CHECKED. FURTHER, RELEVANT INFORMATION/DETAILS INFORMATION/DETAILS/EX PLANATIONS AS REQUIRED BY ID. A.O. WERE FURNISHED DURING THE COUR SE OF ASSESSMENT PROCEEDINGS. B. THAT NO DEFECT HAS BEEN POINTED OUT IN THE BOOKS OF ACCOUNT BY ID. A.O. C. THERE WAS NO WRITTEN OR ORAL AGREEMENT BETWEEN T HE ALLEGED PARTIES AND IT IS NOT DISPUTED THAT PAYMENTS WERE MADE AGAINST INDIVIDUAL GRS ISSUED FOR EACH TRIP SEPARATELY. 6 D. EACH GR IS SEPARATE CONTRACT WHICH IS ENVISAGED FOR THE PURPOSE OF SECTION 194C OF THE ACT AND ALSO CLARIFIED SO BY CB DT CIRCULAR NO. 715 DT. 08.08.1995. E. THAT NO CASE OF SINGLE PAYMENT EXCEEDING RS. 20,000 .00 UNDER THE HEAD CARRIAGE PAID MADE BY LD. ASSESSING OFFICER. F. THAT NO CASE OF TOTAL PAYMENT EXCEEDING RS. 50,000. 00 TO A TRUCK NO. DURING YEAR MADE BY LD. ASSESSING OFFICER. G. THAT ASSESSEE FURNISHED TRUCK WISE PAYMENT DETAILS. 10. THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSI NG OFFICER HAS POINTED OUT TWO SAMPLE CASES OF GRS OVER RS. 20 ,000.00/- TO SUPPORT HIS CONTENTION. BUT THAT IS OF NO HELP TO HIM AS IN NONE OF THESE CASES, THERE IS NO SINGLE PAYMENT EXC EEDING RS. 20,000.00 AND AGGREGATE PAYMENT OF EACH GT DOES NOT EXCEED RS. 50,000.00 AS SHOWN UNDER : GR NO. TRUCK NO. AMOUNT OF AMOUNT PAID DT.OF GR PAYMENT 8172 CH04C-3959 38890.00 19000.00 23.02.2009 19890.00 6.03.2009 8110 CH04G-1575 44280.00 18000.00 17.02.2009 15000.00 22.02.2009 11280.00 27.02.2009 11. THE ASSESSEE ALSO RELIED ON MANY CASE LAWS NAME LY CIT VS M/S T.L.VERMA & CO. ITA NO. 892 OF 2010 DATED 23 .03.2011 (P&H), MERILYN SHIPPING & TRANSPORTS VS ACIT 20 TAX MAN.COM 244 (VISHAKHAPATTNAM TRIBUNAL). 12. THE LD. CIT(APPEALS), HOWEVER, CONSIDERING THE EXPLANATION OF THE ASSESSEE, CONFIRMED THE ADDITION AND DISMISSED THE APPEAL OF THE ASSESSEE ON THIS GROUND . HIS FINDINGS IN PARA 4.4 TO 4.6 OF THE APPE LLATE ORDER ARE 7 REPRODUCED AS UNDER : I HAVE GONE THROUGH THE SUBMISSION MADE. REGARDING THE ADDITION OF RS.L,62,76,217/- ADMITTEDLY THE PAYMENT S MADE PER GR EXCEEDS RS.20,000/-. THE ONLY CONTENTION OF THE APP ELLANT IS THAT THIS AMOUNT HAS BEEN MADE IN INSTALLMENTS; NONE OF WHICH EXCEEDS 2O,000/- AT A TIME. HOWEVER, 1 AM UNABLE TO AGREE WITH THE APPELLANT ON THIS ASPECT. SECTION 194C PROVIDES FOR DEDUCTION OF TDS FROM PAYMENTS MADE IN AMOUNT MORE THAN RS.2O,00 0/- AT A TIME AND 5O,000/- IN A YEAR. THE APPELLANT HAS PAID THE AMOUNTS IN RESPECT OF SEPARATE GRS ISSUED AND THEREFORE, THE M ONEY PAYABLE/PAID PER GR IS TO BE SEEN IN THIS CONTEXT. SINCE THE APPELLANT HAS CLEARLY VIOLATED, THE PROVISIONS OF S ECTION 194C, THEREFORE, THE, CLAIM OF THE APPELLANT IS NOT ACCEPTABLE 4.5 AS REGARDS THE BALANCE PAYMENT OF RS. 1,21,36,002/-, THE APPELLANT CONTENDED THAT FURNISH ING THE TRUCK OWNER WISE DETAILS WAS NOT HUMANLY POSSIBLE. IT IS FURTHER SUBMITTED THAT EACH INDIVIDUAL PAYMENTS HAS NOT EXCE EDED RS.2O,000/- AND THAT TOTAL PAYMENT ALSO DOESN'T EXC EED RS.5O,000/- TO AN INDIVIDUAL HE FURTHER SUBMITTED THAT DISALLOWANCE UNDER SECTION 4O(A)(IA) CANNOT BE MADE MERELY ON SUSPICION. 4.6 I HAVE CONSIDERED THE SUBMISSIONS MADE. THE A.O . HAS SPECIFICALLY MENTIONED IN THE ASSESSMENT ORDER TH AT THE APPELLANT COULD NOT PRODUCE THE GRS FOR VERIFICATIO N. THEREFORE, I AM OF THE OPINION THAT SINCE THE BASIC DOCUMENT I.E. G RS ARE NOT PRODUCE BEFORE THE A.O. FOR VERIFICATION, THEREFORE, THE AP PELLANT'S CONTENTION CANNOT BE ACCEPTED IN ABSENCE OF VERIFICATION. THE RELEVANT OF JUDICIAL DECISION REFERRED BY THE APPELLANT CAN BE CONSIDERE D ONLY WHEN THE GRS ARE AVAILABLE FOR VERIFICATION. MERELY PRODUCIN G A GR REGISTER WITHOUT: THE DOCUMENTS IS NOT SUFFICIENT. IN VIEW OF THIS, I AM UNABLE TO ACCEPT THE CONTENTION OF THE APPELLANT. THEREFORE, AS REGARDS THE CASE LAWS CITED BY THE AP PELLANT, IT IS SEEN THAT THESE ARE DISTINGUISHABLE AS THE SITUATION IN APPELLANT'S CASE IS DIFFERENT. HE HAS EITHER MADE PAYMENTS OF RUPEES EX CEEDING RS.20,060/-PER GR AND IN OTHER CASES HE HAS NOT PRO DUCED THE GRS AT ALL FOR VERIFICATION. AS REGARD THE OTHER CASE CITE D THOSE M/S MERILYN SHIPPING TRANSPORTS VS. ACIT, IT IS OBSERVED THAT T HE OPERATION OF THE SAID JUDGMENT HAS BEEN SUSPENDED BY HON'BLE ADHRAPR ADESH HIGH 8 COURT VIDE ORDER DATED 10.12.2012. THEREFORE, THIS GROUND OF APPEAL IS HEREBY DISMISSED. 13. WE HAVE CONSIDERED RIVAL SUBMISSIONS. DURING T HE COURSE OF ARGUMENTS, LD. COUNSEL FOR THE ASSESSEE R EFERRED TO THE ASSESSMENT ORDER IN WHICH THE EXPLANATION OF TH E ASSESSEE WAS THAT THE GR ISSUED BY THE ASSESSEE GOT MISPLACE D AT THE TIME OF SHIFTING OF THE TRANSPORT BUSINESS OFFICE F ROM KURALI. THE LD. COUNSEL FOR THE ASSESSEE, HOWEVER, AT THE T IME OF HEARING OF THE APPEAL, PRODUCED SOME OF THE GRS WHI CH WERE LATER ON TRACED AND PRODUCED FOR INSPECTION OF THE COURT TO SHOW THAT THE FINDINGS OF THE ASSESSING OFFICER WER E TOTALLY MISPLACED BY HOLDING THAT GRS HAVE BEEN ISSUED BY T HE TRANSPORTER WHICH FACT IS INCORRECT BECAUSE GRS IN QUESTION HAVE BEEN ISSUED BY THE ASSESSEE. SINCE THE COPIES OF THE GRS ARE VITAL TO THE ISSUE, THEREFORE, ASSESSEE'S COUNS EL WAS DIRECTED TO PLACE COPIES OF THE GRS ON RECORD FOR C ONSIDERATION AND DECISION ON THE ISSUE. THE ASSESSEE'S COUNSEL, ACCORDINGLY, PLACED COPIES OF SOME OF THE GRS, LATE R ON LOCATED, BEFORE US FOR CONSIDERATION. COPIES ALSO P ROVIDED TO LD. DR. 14. SECTION 194C OF THE INCOME TAX ACT, AS ARE APPL ICABLE TO ASSESSMENT YEAR UNDER APPEAL IS REPRODUCED FOR CONS IDERATION AS UNDER : 194C. (1) ANY PERSON RESPONSIBLE FOR PAYING ANY S UM TO ANY RESIDENT (HEREINAFTER IN THIS SECTION REFERRED TO AS THE CON TRACTOR) FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT A NY WORK IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR 73 AND ( A ) THE CENTRAL GOVERNMENT OR ANY STATE GOVERNMENT; OR ( B ) ANY LOCAL AUTHORITY; OR 9 ( C ) ANY CORPORATION ESTABLISHED BY OR UNDER A CENTR AL, STATE OR PROVINCIAL ACT; OR ( D ) ANY COMPANY; OR ( E ) ANY CO-OPERATIVE SOCIETY; OR ( F ) ANY AUTHORITY, CONSTITUTED IN INDIA BY OR UNDER ANY LAW, ENGAGED EITHER FOR THE PURPOSE OF DEALING WITH AND SATISFYING THE NEED FOR HOUSING ACCOMMODATION OR FOR THE PURPOSE OF PLANNING, DEVEL OPMENT OR IMPROVEMENT OF CITIES, TOWNS AND VILLAGES, OR FOR B OTH; OR ( G ) ANY SOCIETY REGISTERED UNDER THE SOCIETIES REGI STRATION ACT, 1860 (21 OF 1860) OR UNDER ANY LAW CORRESPONDING TO THAT ACT IN FORCE IN ANY PART OF INDIA; OR ( H ) ANY TRUST; OR ( I ) ANY UNIVERSITY ESTABLISHED OR INCORPORATED BY O R UNDER A CENTRAL, STATE OR PROVINCIAL ACT AND AN INSTITUTION DECLARED TO BE A UNIVERSITY UNDER SECTION 3 OF THE UNIVERSITY GRANTS COMMISSION ACT, 1956 (3 OF 1956) ; OR ( J ) ANY FIRM; OR ( K ) ANY INDIVIDUAL OR A HINDU UNDIVIDED FAMILY 73A [ OR AN ASSOCIATION OF PERSONS OR A BODY OF INDIVIDUALS, WHETHER INCORPORA TED OR NOT, OTHER THAN THOSE FALLING UNDER ANY OF THE PRECEDING CLAUSES ] , WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSIO N CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE ( A ) OR CLAUSE ( B ) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANCIAL YEAR IN WHICH SUCH SUM IS CREDITED OR PAI D TO THE ACCOUNT OF THE CONTRACTOR, SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACC OUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO ( I ) ONE PER CENT IN CASE OF ADVERTISING, ( II ) IN ANY OTHER CASE TWO PER CENT, OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THERE IN: PROVIDED THAT NO INDIVIDUAL OR A HINDU UNDIVIDED FAMILY SHAL L BE LIABLE TO DEDUCT INCOME-TAX ON THE SUM CREDITED OR PAID TO THE ACCOUNT OF THE CONTRACTOR WHERE SUCH SUM IS CREDITED OR PAID EXCLU SIVELY FOR PERSONAL PURPOSES OF SUCH INDIVIDUAL OR ANY MEMBER OF HINDU UNDIVIDED FAMILY.] (2) ANY PERSON (BEING A CONTRACTOR AND NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY) RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE SUB-C ONTRACTOR) IN PURSUANCE OF A CONTRACT WITH THE SUB-CONTRACTOR FOR CARRYING OUT , OR FOR THE SUPPLY OF LABOUR FOR CARRYING OUT, THE WHOLE OR ANY PART OF T HE WORK UNDERTAKEN BY THE CONTRACTOR OR FOR SUPPLYING WHETHER WHOLLY OR P ARTLY ANY LABOUR WHICH THE CONTRACTOR HAS UNDERTAKEN TO SUPPLY SHALL , AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE SUB-CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO ONE PER CENT OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THEREIN: [ PROVIDED THAT AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHO SE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSION CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDE R CLAUSE ( A ) OR CLAUSE ( B ) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING TH E FINANCIAL YEAR IN WHICH SUCH SUM IS CREDITED OR PAI D TO THE ACCOUNT OF THE 10 SUB-CONTRACTOR, SHALL BE LIABLE TO DEDUCT INCOME-T AX UNDER THIS SUB- SECTION.] [ EXPLANATION I. FOR THE PURPOSES OF SUB-SECTION (2), THE EXPRESSIO N 'CONTRACTOR' SHALL ALSO INCLUDE A CONTRACTOR WHO IS CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WO RK) IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND THE GOVERNMENT OF A FOREIGN STATE OR A FOREIGN ENTERPRISE OR ANY ASSOCIATION OR BODY EST ABLISHED OUTSIDE INDIA.] [ EXPLANATION II ].FOR THE PURPOSES OF THIS SECTION, WHERE ANY SUM REFERRED TO IN SUB-SECTION (1) OR SUB-SECTION (2) I S CREDITED TO ANY ACCOUNT, WHETHER CALLED 'SUSPENSE ACCOUNT' OR BY ANY OTHER N AME, IN THE BOOKS OF ACCOUNT OF THE PERSON LIABLE TO PAY SUCH INCOME, SU CH CREDITING SHALL BE DEEMED TO BE CREDIT OF SUCH INCOME TO THE ACCOUNT O F THE PAYEE AND THE PROVISIONS OF THIS SECTION SHALL APPLY ACCORDINGLY. ] 78 [ EXPLANATION III. FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION 'WORK' SHALL ALSO INCLUDE ( A ) ADVERTISING; ( B ) BROADCASTING AND TELECASTING INCLUDING PRODUCTI ON OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING; ( C ) CARRIAGE OF GOODS AND PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN BY RAILWAYS; ( D ) CATERING.] (3) NO DEDUCTION SHALL BE MADE UNDER SUB-SECTION (1 ) OR SUB-SECTION (2) FROM [( I ) THE AMOUNT OF ANY SUM CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID TO THE ACCOUNT OF, OR TO, THE CONTRACTOR OR SU B-CONTRACTOR, IF SUCH SUM DOES NOT EXCEED TWENTY THOUSAND RUPEES: PROVIDED THAT WHERE THE AGGREGATE OF THE AMOUNTS OF SUCH SU MS CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID D URING THE FINANCIAL YEAR EXCEEDS FIFTY THOUSAND RUPEES, THE PERSON RESPONSIB LE FOR PAYING SUCH SUMS REFERRED TO IN SUB-SECTION (1) OR, AS THE CASE MAY BE, SUB-SECTION (2) SHALL BE LIABLE TO DEDUCT INCOME-TAX 80 [UNDER THIS SECTION:] 81 [ PROVIDED FURTHER THAT NO DEDUCTION SHALL BE MADE UNDER SUB- SECTION (2), FROM THE AMOUNT OF ANY SUM CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE PREVIOUS YEAR TO THE AC COUNT OF THE SUB- CONTRACTOR DURING THE COURSE OF BUSINESS OF PLYING, HIRING OR LEASING GOODS CARRIAGES, ON PRODUCTION OF A DECLARATION TO THE PERSON CONCERNED PAYING OR CREDITING SUCH SUM, IN THE PRESCRIBED FOR M 82 AND VERIFIED IN THE PRESCRIBED MANNER AND WITHIN SUCH TIME AS MAY BE PR ESCRIBED, IF SUCH SUB-CONTRACTOR IS AN INDIVIDUAL WHO HAS NOT OWNED MORE THAN TWO GOODS CARRIAGES AT ANY TIME DURING THE PREVIOUS YEAR: PROVIDED ALSO THAT THE PERSON RESPONSIBLE FOR PAYING ANY SUM AS AFORESAID TO THE SUB-CONTRACTOR REFERRED TO IN THE SECOND PROVISO SHALL FURNISH TO THE PRESCRIBED INCOME-TAX AUTHORITY OR T HE PERSON AUTHORISED BY IT SUCH PARTICULARS AS MAY BE PRESCRIBED IN SUCH FO RM AND WITHIN SUCH TIME AS MAY BE PRESCRIBED; OR] ( II ) ANY SUM CREDITED OR PAID BEFORE THE 1ST DAY OF JUNE, 1972; 83 [OR] [( III ) ANY SUM CREDITED OR PAID BEFORE THE 1ST DAY OF J UNE, 1973, IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND A CO-OPERATIVE SOCIETY OR IN PURSUANCE OF A CONTRACT BETWEEN SUCH CONTRACT OR AND THE SUB- CONTRACTOR IN RELATION TO ANY WORK (INCLUDING SUPPL Y OF LABOUR FOR 11 CARRYING OUT ANY WORK) UNDERTAKEN BY THE CONTRACTOR FOR THE CO-OPERATIVE SOCIETY.] [ EXPLANATION. FOR THE PURPOSES OF CLAUSE ( I ), 'GOODS CARRIAGE' SHALL HAVE THE SAME MEANING AS IN THE EXPLANATION TO SUB-SECTION (7) OF SECTION 44AE .] (4) 85 [***] (5) 85 [***]] 15. SECTION 40A(3) OF THE INCOME TAX ACT PROVIDES, WHERE THE ASSESSEE INCURS ANY EXPENDITURE IN RESPECT OF W HICH PAYMENT IS MADE IN A SUM EXCEEDING 20,000/- RUPEES OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE DRAWN ON A BANK OR ACCOUNT PAYEE BANK DRAFT, NO DEDUCTION BE ALLOWED IN RESPEC T OF SUCH EXPENDITURE. 16. THE LD. COUNSEL FOR THE ASSESSEE BY REFERRING T O THE ASSESSMENT ORDER SUBMITTED THAT ASSESSEE HAS MAINTA INED TRUCK-WISE/TRIP-WISE DETAIL OF PAYMENTS SO THAT ASS ESSEE IS ABLE TO COMPLY WITH TDS PROVISIONS IN CASE OF NEED. THE DETAILS WERE PLACED ON RECORD OF THE ASSESSING OFFI CER. THE TRUE COPIES OF THE SAME ARE ALSO PRODUCED BEFORE US WHICH CONTAINED THE COMPLETE DETAILS IN FINANCIAL YEAR IN QUESTION FROM 01.04.2008 TO 31.03.2009 TO SHOW THAT TRUCK-WI SE DETAILS ARE MAINTAINED SHOWING THE EACH PAYMENTS WERE BELOW RS. 20,000/- TO EACH TRUCK. THE DETAILS CONTAINED THE DATE, GR NUMBER, TRUCK NUMBER, STATION, PAYMENT, ADVANCE-1, ADVANCE- 2, DATE, FINAL PAYMENT, DATE. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT WAS HUMANLY NOT POSSIBLE TO MAINT AIN THESE DETAILS OWNER-WISE BECAUSE THE TRUCKS WERE HIRED IN OPEN MARKET WHICH IS EVIDENT FROM THE GR REGISTER. EACH TRUCK IS NEGOTIATED WITH THE PERSON IN CONTROL OF THE VEHICL E AT THE TIME OF HIRING/DISPATCH. THE LD. COUNSEL FOR THE ASSESS EE ALSO 12 SUBMITTED THAT IN CASE OF THE ASSESSEE, THE GRS HAV E BEEN ISSUED BY THE ASSESSEE WHICH IS EVIDENT FROM THE CO PIES OF SAME FILED ON RECORD AND NO GRS HAVE BEEN ISSUED BY THE TRANSPORTERS. CIRCULAR NO. 715 DATED 08.08.1995 IS REFERRED AND ON QUESTION NO. 9, IT IS ANSWERED THAT NORMALLY EACH GR CAN BE SAID TO BE A SEPARATE CONTRACT, IF THE GOODS ARE TRANSPORTED AT ONE TIME. BUT IF THE GOODS ARE TRAN SPORTED CONTINUOUSLY IN PURSUANCE OF A CONTRACT FOR A SPECI FIC PERIOD OR QUANTITY, EACH GR WILL NOT BE A SEPARATE CONTRACT A ND ALL THE GRS RELATING TO THAT PERIOD OR QUANTITY WILL BE AGG REGATED FOR THE PURPOSE OF TDS. 17. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON DE CISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN CASE OF CIT VS M/S T.L.VERMA & CO. (P) LTD. IN ITA NO. 892/2010 DA TED 23.03.2011. IN THIS CASE, THE ASSESSING OFFICER HE LD THAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX UNDER SECTION 194 C OF THE INCOME TAX ACT BECAUSE THE ASSESSEE HIRED TRUCKS FO R ITS BUSINESS AND MADE PAYMENT FOR TRANSPORTATION. IN T HE ABSENCE OF DEDUCTIONS, THE AMOUNTS WERE DISALLOWED. THE VIEW TAKEN BY THE ASSESSING OFFICER WAS UPHELD BY THE LD . CIT(APPEALS) BUT ON FURTHER APPEAL, THE TRIBUNAL DE CIDED THE MATTER IN FAVOUR OF THE ASSESSEE. THE FINDINGS OF THE TRIBUNAL ARE REPRODUCED IN THE ORDER IN WHICH IT WAS BRIEFLY RECORDED THAT AS PER THE LD. CIT(APPEALS), TRANSPORTER ISSUE S A GR FOR THE CONSIGNOR (I.E. THE ASSESSEE), A CONTRACT IS ES TABLISHED AND ANY PAYMENT MADE IN PURSUANCE OF THAT CANNOT ESCAPE THE PROVISION OF SECTION 194C OF THE ACT. IN VIEW OF T HE TRIBUNAL, THE GR IS EQUIVALENT TO A CONTRACT WHICH IS ENVISAG ED FOR THE 13 PURPOSE OF SECTION 194C OF THE ACT. SINCE EACH GR WAS HELD TO BE A CONTRACT AND ASSESSEE FURNISHED DETAILS OF TRUCK-WISE PAYMENT WHICH DOES NOT SHOW THAT EACH PAYMENT EXCEE D RS. 20,000/- AND IT ALSO DOES NOT SHOW THAT IN AGGREGAT E IN FINANCIAL YEAR, TRUCK-WISE PAYMENT EXCEED RS. 50,00 0/- THEREFORE, EVEN IF EACH GR IS TO BE TAKEN AS SEPARA TE CONTRACT AS CONCLUDED BY THE LD. CIT(APPEALS) AND CLARIFIED IN CIRCULAR NO. 715 (SUPRA), NO MATERIAL WAS FOUND THAT ANY PAY MENT OF INDIVIDUAL GR HAS EXCEEDED RS. 20,000/- OR IN AGGRE GATE THE PAYMENTS TO SOME TRANSPORTERS HAS EXCEEDED RS. 50,0 00/- IN THE FINANCIAL YEAR. THE TRIBUNAL ACCORDINGLY, DECI DED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE HON'BLE PUNJA B & HARYANA HIGH COURT IN THE BACKGROUND OF THESE FACTS AND FINDINGS OF THE TRIBUNAL HELD AS UNDER : 4. WE HAVE HEARD LD. COUNSEL FOR THE APPELLANT. 5. LEARNED COUNSEL FOR THE REVENUE SUBMITS THAT TOTA L FREIGHT-PAYMENTS EXCEEDED THE AMOUNT STIPULATED UND ER SECTION 194C(3) OF THE ACT AND IN SUCH A SITUATION, TH E ASSESSEE WAS LIABLE TO DEDUCT TDS, AS HELD BY THE ASSESSING OFFICER AND THE CIT(A). 6. WE ARE UNABLE TO ACCEPT THE SUBMISSION. 7. AS HELD BY THE TRIBUNAL INDIVIDUAL PAYMENTS DID NOT EXCEED RS.20,000/- AND TOTAL PAYMENT DURING TH E FINANCIAL YEAR DID NOT EXCEED RS.50,000/- BY A TRANSPORTER, IN WHICH CASE, SECTION 194C OF THE ACT WILL NOT APPLY. THE FINDING ABOUT THE QUANTUM OF PAYMENT IS A FINDING OF FACT AND HAS NOT BEEN CHALLENGED. ONCE THE FINDING OF THE TRIBUNAL IS NOT LIABLE TO BE INTERFERE D WITH, NO SUBSTANTIAL QUESTION OF LAW ARISES. THE APPEAL IS DISMISSED. 14 18. HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS UNITED RICE LAND LTD. 322 ITR 594 HELD AS UNDER : THE ASSESSEE-COMPANY WAS ENGAGED IN THE BUSINESS OF MANUFACTURE AND EXPORT OF RICE. WHENEVER THERE WAS NEED FOR TRANSPORTATION OF GOODS FROM BUSINESS PREMISES TO THE PORT THE ASSESSEE USED TO ENGAGE TRUCKS THROUGH TRANSPORTERS. THE CONSIDERATION WAS CHARGED BY THE TRANSPORTERS FROM THE TRUCK OWNERS OR OPERATORS AND THE HIRE CHARGES WERE PAID BY THE ASSESSEE DIRECTLY TO TH E TRUCK OWNERS OR DRIVERS OR THROUGH THE TRANSPORTERS . THERE WAS NO CONTRACT WITH ANY OF THE LOCAL TRANSPORTERS OR TRUCK OWNERS. THE ASSESSING OFFICER TREATED THE ASSESSEE A S IN DEFAULT FOR SHORT DEDUCTION OF TAX UNDER SECTION 201 OF THE INCOME-TAX ACT, 1961 AND LEVIED INTEREST UNDER SECT ION 201(1A) OF THE ACT. THE COMMISSIONER (APPEALS) PARTL Y ALLOWED THE APPEAL FILED BY THE ASSESSEE. THE APPEA L FILED BY THE REVENUE WAS DISMISSED BY THE TRIBUNAL. ON FURTHER APPEAL: HELD, DISMISSING THE APPEAL, THAT THE ASSESSING OFF ICER HAD HELD THE ASSESSEE LIABLE TO DEDUCTION OF TAX ONL Y ON THE ASSUMPTION THAT THE ASSESSEE HAD AGREEMENT WITH THE PARTIES THROUGH WHOM TRUCKS WERE ARRANGED FOR TRANSPORTATION OF GOODS. THE COMMISSIONER (APPEALS) HAD RECORDED A FINDING THAT THERE WAS NEITHER AN ORAL N OR WRITTEN AGREEMENT BETWEEN THE ASSESSEE AND TRANSPORTERS FOR CARRIAGE OF GOODS NOR HAD IT BEEN PROVED THAT ANY S UM OF MONEY REGARDING FREIGHT CHARGES WAS PAID TO THEM IN PURSUANCE OF A CONTRACT FOR A SPECIFIC PERIOD, QUAN TITY OR PRICE. THIS FINDING OF FACT WAS RECORDED AFTER CONS IDERING THE CERTIFICATE FURNISHED BY THE TRANSPORTERS. THE TRIBUNAL ALSO RECORDED THAT THIS FINDING OF FACT HAD N OT BEEN CONTROVERTED BY THE DEPARTMENT. 19. HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE O F CIT VS TRIVENIPRASAD PANNALAL 228 ITR 680 HELD THAT SECTIO N 40A(3) 15 DOES NOT REFER TO TRANSACTION BUT ONLY TO THE PAYME NT OF SINGLE SUM. 20. SECTION 194C(2) ALSO PROVIDES FOR PAYMENT OF AN Y SUM TO ANY RESIDENT. AS PER THE PROVISIONS OF SECTION 194C(2)(3) OF THE ACT, ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT FOR CARRYING OUT ANY WORK IN PURSUANCE OF A CONTRACT SHALL, AT THE TIME OF CREDIT OF SUCH SUM OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY CHEQUE, DEDUCT THE TA X THEREON AT THE PRESCRIBED RATE. HOWEVER, NO SUCH DEDUCTION AT SOURCE IS REQUIRED TO BE MADE, IF THE SUM PAID OR CREDITED DID NOT EXCEED RS. 20,000/- AND TOTAL PAYMENT DURING TH E FINANCIAL YEAR DID NOT EXCEED RS. 50,000/- IN SUCH CASE. ACCORDING TO THE ASSESSEE, THERE WERE NO AGREEMENTS EITHER ORAL OR WRITTEN BETWEEN THE ASSESSEE AND THE TANKER S BUT THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE BECAUSE THE GRS HAVE BEEN ISSUED BY THE TR ANSPORTER WHICH FACT IS INCORRECT BECAUSE THE GR IN THE CASE OF THE ASSESSEE HAVE BEEN ISSUED BY THE ASSESSEE HIMSELF. ACCORDING TO EXPLANATION OF THE ASSESSEE, THE ASSESSEE IS ENG AGED IN BUSINESS OF TRANSPORTING GOODS FOR DIFFERENT COMPAN IES AND SINCE THE ASSESSEE DID NOT HAVE SUFFICIENT VEHICLES OF HIS OWN, THEREFORE, ASSESSEE TOOK ON HIRE TRUCKS FROM DIFFER ENT PARTIES AND USED THEM FOR CARRYING OUT GOODS FOR ITS CLIENT S. EACH TRUCK TRIP WAS NEGOTIATED WITH THE PERSON IN CONTRO L OF THE VEHICLE AND A FRESH GR IS ISSUED BY THE ASSESSEE. 21. IN THE CASE OF M/S T.L.VERMA & CO. (P) LTD. (SU PRA), VIEW OF THE TRIBUNAL WAS CONFIRMED BY THE HON'BLE HIGH C OURT IN 16 WHICH THE TRIBUNAL FOUND THAT EACH GR IS EQUIVALENT TO A CONTRACT. IT WAS FURTHER FOUND THAT THE ASSESSEE D ID NOT MAKE EACH PAYMENT EXCEEDING RS. 20,000/- AND THE ASSESSE E DID NOT SHOW TO HAVE MADE AGGREGATE PAYMENT IN FINANCIAL YE AR TRUCK- WISE EXCEEDING RS. 50,000/-. AS NOTED ABOVE, LD. C OUNSEL FOR THE ASSESSEE HAS FILED COMPLETE DETAILS TRUCK-WISE TO SHOW THAT EACH PAYMENT DID NOT EXCEED RS. 20,000/-. HOWEVER, LD. COUNSEL FOR THE ASSESSEE BY REFERRING TO PAGES 9 TO 40 OF THE PAPER BOOK WHICH IS DETAIL OF TRUCK-WISE ANALYSIS O F CARRIAGE/FREIGHT EXPENSES FOR THE PERIOD UNDER CONS IDERATION STATED THAT SIX PAYMENTS WERE MORE THAN RS. 50,000/ - IN AGGREGATE AND AS SUCH THE SAME SHALL HAVE TO BE DIS ALLOWED. THE DETAILS OF THESE PAYMENTS EXCEEDING MORE THAN R S. 50,000/- IN AGGREGATE ARE MENTIONED AT SR.NO. 4, 11 , 501, 696, 926 AND 1036 OF PAPER BOOK FROM PAGES 9 TO 40. THE LD. COUNSEL FOR THE ASSESSEE FAIRLY CONCEDED THAT THESE PAYMENTS SHALL HAVE TO BE DISALLOWED. HOWEVER, HE HAS EXPLA INED THAT REST OF THE PAYMENTS ARE LESS THAN RS. 20,000/- WHI CH ON VERIFICATION, WE FOUND TO BE CORRECT BECAUSE EACH P AYMENT, AS PER EACH GR WAS LESS THAN RS. 20,000/- AND ALSO LES S THAN RS. 50,000/- IN AGGREGATE OF SINGLE TRANSPORTER. EVEN IF THE ASSESSING OFFICER HAS NOT BROUGHT ANYTHING ON RECOR D, IF THERE WAS ANY CONTRACT OR SUB-CONTRACT BETWEEN THE ASSESS EE AND THE TANKERS, BUT EACH GR-WISE PAYMENT WAS LESS THAN RS. 20,000/- AND AS SUCH THE FINDINGS OF THE ASSESSING OFFICER WERE MERELY BASED UPON PRESUMPTION AND ASSUMPTION O F CERTAIN FACTS WHICH HAVE NOT BEEN BROUGHT ON RECORD IN SUPPORT OF THE FINDINGS OF THE ASSESSING OFFICER. THE 17 ASSESSING OFFICER HAS ALSO REFERRED TO SOME GRS AT PAGE 12 OF THE ASSESSMENT ORDER TO SHOW THAT THE AMOUNT HAS EX CEEDED THE PRESCRIBED LIMIT. HOWEVER, THE LD. COUNSEL FOR THE ASSESSEE BY REFERRING TO PAGE 4, 47 AND 52 OF THE PAPER BOOK HAS BEEN ABLE TO SHOW THAT FINDINGS OF THE ASSESSING OFFICER WERE FACTUALLY INCORRECT AND NO PAYMENT HAS EXCEEDED RS. 20,000/- EACH GR OR AGGREGATE RS. 50,000/- WHICH WAS ALSO EX PLAINED IN THE SUBMISSIONS BEFORE LD. CIT(APPEALS) AND REPR ODUCED ABOVE IN RESPECT OF GR NO. 8172 AND 8110. 22. CONSIDERING THE ABOVE DISCUSSION IN THE LIGHT O F THE MATERIAL AVAILABLE ON RECORD, IT IS CLEAR THAT EACH GR ISSUED BY ASSESSEE HAS COMPLETE DETAILS FOR TRANSPORTATION OF THE MATERIAL FOR THE CLIENT OF THE ASSESSEE THROUGH THE TRUCKS AND THE PAYMENTS ARE BELOW RS. 20,000/- EACH GR. THERE FORE, NO SUCH DEDUCTION AT SOURCE IS REQUIRED TO BE MADE. T HE AUTHORITIES BELOW WERE THEREFORE, UNJUSTIFIED IN DI SALLOWING THE ENTIRE SUM FOR VIOLATING THE PROVISIONS OF SECTION 40(A)(IA) AND SECTION 40A(3) OF THE ACT. HOWEVER, AS ADMITTED BY LD. COUNSEL FOR THE ASSESSEE AND AS PER DETAILS CONTAINED AT PA GE 9 TO 40 OF THE PAPER BOOK, SIX PAYMENTS IN AGGREGATE HAVE E XCEEDED RS. 50,000/- IN RESPECT OF PAYMENTS MENTIONED AT SR .NO.4, 11, 501, 696, 926 AND 1036, DISALLOWANCE OF THESE PAYME NTS HAVE TO BE MADE BY THE ASSESSING OFFICER. WE, ACCORDING LY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DIRECT THE ASSESSING OFFICER TO RESTRICT DISALLOWANCE OF THE PAYMENTS EX CEEDING RS. 50,000/- IN CASE OF THE PAYMENTS MADE TO TRUCKS MEN TIONED AT S.NO. 4, 11, 501, 696, 926 AND 1036 AS PER PAGE 9 T O 40 OF THE PAPER BOOK AND REST OF THE DISALLOWANCE SHALL BE DE LETED. THE 18 ASSESSEE IS DIRECTED TO FILE COPY OF THE PAPER BOOK FROM PAGES 9 TO 40 BEFORE ASSESSING OFFICER FOR PASSING A CONS EQUENTIAL ORDER ACCORDINGLY. 23. IN THE RESULT, THIS GROUND OF APPEAL OF THE ASS ESSEE IS PARTLY ALLOWED AS DIRECTED ABOVE. 24. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MAY, 2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27 TH MAY,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CI T,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH