The Income Tax Appellate Tribunal (ITAT), Chandigarh bench consisting of Diva Singh, Judicial Member, and Vikram Singh Yadav, Accountant Member held that gross receipts of Freight services against disbursements to Ex-servicemen truck owners necessary to claim TDS.
The assessee HP Ex Servicemen Corporation is incorporated under the Himachal Pradesh Ex-servicemen Corporation Act, 1979. The aim of the Corporation is to provide employment/financial benefits to the retired Defense personnel and was engaged in various activities as permitted under the Act and Rules. The subject matter for consideration in the present appeal is the TDS deducted on behalf of the transportation activities carried out by the assessee for the cement plant of ACC Ltd., Ambuja JP Cement, etc. The assessee corporation contended that it did not own any trucks etc. and these were hired through the Ex-servicemen Corporation and consequently the TDS deducted was passed on by the assessee to the truck owners/pliers. The commission received from the said activity, it was submitted, is the only income of the assessee. The Assessing Officer (AO) ignoring the facts noticed that no freight receipts have been shown in the return filed, and proceeded to disallow the claim of refund of TDS. The challenge before the CIT(A) failed as he also failed to consider the facts available on record. Aggrieved by this, the assessee is in appeal before the ITAT.
The Counsel for the assessee, Amitoz Singh Kamboj submitted that the assessee is entitled only to the commission income. The trucks etc. have been engaged through the assessee by ACC Ltd. and the TDS deducted by the ACC is paid to the truck operators and as far as the assessee is concerned, it is only a pass-through arrangement.
The Tribunal said “It is an admitted fact that the freight receipt by the Corporation has been paid to the truck owners and it is claimed that TDS deducted by the ACC Ltd. is also as per practice paid to the truck owners after receipt of the same from the Income Tax Department.”
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