Decided on May 30,2014



MUKUL KUMAR SHRAWAT,JM. - (1.) THESE two appeals for A.Y. 2008 -09 and 2009 -10 have been filed by the Revenue and the Assessee in Cross -objection arising from the orders of learned CIT(A) -XV, Ahmedabad, both dated 30th November, 2012. Issue raised in the grounds of appeal by the Revenue are identical; hence, these Appeals and Cross objections are consolidated and hereby decided by this common order. as prescribed then according to us the issue is directly covered by the aforecited decision of Hon'ble Gujarat High Court.
(2.) FOR both the Assessment Years, ground no.1 of the Revenue is as under: "The ld. Commissioner of Income -Tax(Appeals) -XV, Ahmedabad has erred in law and on facts in deleting the addition of (Rs.3,72,34,228/ - for A.Y. 2008 -09)& (Rs.5,70,38,630/ - for A.Y. 2009 -10) made on account of freight charges u/s.40(a)(ia) of the Act."
(3.) THE assessee is in transport business in individual capacity. It was noted by the AO that the assessee had debited freight expenses but failed to deduct the TDS. In compliance of show cause notice, the assessee has given the explanation as under: "During the year, I have shown hirecharges income and expenditure of Rs.3,72,34,228/ - on direct work as per use of our builty. My builty are used for transportation work, so hirecharges income and expenditure shown in may audited accounts I simply earned commission on such transaction. Hire charge received/paid directly to truck owner. Statement regarding TDS deducted on such hirecharges income submitted. In another type of transaction my built was not used but manage for transportation on commission basis so memo book used for such transaction. Your honour has examined my details regarding statement of commission earned Rs.5,70,300/ - as per builty used and memo book. Your honour has been requested to accept our income and expenditure of hirecharges as the same are accounted in our books. As per Section 194 -C of the Act, TDS on Rs.3,72,34,228/ - has to be deducted and paid in time as per law. But section 194 -c also provided that no TDS shall be made during course of business of plying, hiring or leasing goods carriage on production of an declaration to the person earned in form no.15 -I, if such contractor is an individual who has not owned more than two goods carriages at any time during the previous year. Your honour has examined the certificates received in Form No.15 -I of hirecharges paid to various individuals of Rs.3,72,34,228/ -. As per law I am not liable for deduction of TDS on such amount. Aim of TDS deduction is generate income -tax payers." However, the AO was not convinced and held that in accordance of the provisions of Section 40(a)(ia) the assessee had defaulted by not deducting the TDS; hence, the expenditure was disallowed.;

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