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December 2009

Substantial questions of law — Whether the freight paid by the assessee (AOP) to truck owners who in turn are members of the said AOP is subject to TDS u/s.194C(2) of the Act, is a substantial question of law.

By Kishor Karia, Chartered Accountant
Atul Jasani, Advocate
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  1. Substantial questions of law —
    Whether the freight paid by the assessee (AOP) to truck owners who in turn are
    members of the said AOP is subject to TDS u/s.194C(2) of the Act, is a
    substantial question of law.

[CIT v. Sirmour Truck
Operators Union (No. 1), (2009) 313 ITR 26 (SC)]

[CIT v. Sirmour Truck
Operators Union (No. 2), (2009) 313 ITR 27 (SC)]

M/s. Gujarat Ambuja Cements
Ltd. entered into a contract with M/s. Sirmour Trucks Operators Union, a
society, consisting of truck operators as its members. The question which
arose before the High Court was whether the freight paid by the assessee (AOP)
to truck owners, who in turn are members of the said AOP, is subject to TDS
u/s.194C(2) of the Act. According to the Supreme Court, the afore-stated
question was a substantial question of law and the High Court ought to have
decided the said question and ought not to have dismissed the appeals
summarily. The Supreme Court therefore remitted the matter to the High Court
for consideration in accordance with the law.

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