By C. N. Vaze
Shailesh Kamdar
Jagdish T. Punja bi
Bhadresh Doshi Chartered Accountants
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Section 194C read with section 40(a)(ia) – The freight payments made by the assessee for hired tankers, which are to be supplied to different customers, are made in capacity of agent on behalf of the principal and hence assessee is not liable to deduct tax on such freight payments made.
FACTS
The assessee had entered into contract with different parties to supply tankers which were being hired from time to time, against which freight payments were made by the assessee.
The assessee’s case was that no TDS was required to be deducted from the freight expenses as all 15-I and 15-J forms regarding the same had been duly submitted to the department.
The AO found certain discrepancies in 15-I and 15-J forms and made addition for failure to deduct TDS under the provisions of section 194C and consequently, made disallowance as per section 40(a)(ia).
It was held by the CIT-(A) that the provisions of section 194C were not applicable to the instant case as the assessee had only hired the trucks from time to time and deleted the additions made u/s. 40(a)(ia).
On appeal by Revenue
HELD THAT
It may be noted that the said Form 15-I and 15-J are to be filed before the prescribed authority, i.e., the Commissioner and not the Assessing Officer. In the instant case, the said forms were filed before the prescribed authority and within the prescribed time and no defect was pointed out by the said authority. In the absence of the same, there is no merit in the observation of the Assessing Officer that there are discrepancies in Form 15-I and 15-J.
Further, the assessee had entered into contract with several parties on whose behalf it was arranging the truck from time to time and the expenditure was booked as freight payment against which freight income was received by the assessee. Hence the assessee is not liable for tax deduction at source u/s. 194C as the amounts paid by the assessee were on behalf of the principal on whose behalf it was arranging the said tankers.
The assessee was making payment for carriage of goods and there was admittedly no oral or written agreement between the assessee and transporters and in the absence of the same, there is no merit in the order of the Assessing Officer in holding that the provisions of section 194C had been violated. In the absence of the same no disallowance is warranted u/s. 40(a)(ia). The order of the CIT-(A) is upheld.
