The Delhi ITAT has recently held that a person who is merely a lorry booking agent is not bound to deduct TDS under Section 194C of the Income Tax Act, 1961.
The assessee is carrying on the business of transportation under the name and style of M/s Bharat Golden Carrier. During the assessment proceedings, the Assessing Officer noted that the assessee debited to its profit and loss a sum of Rs. 2,13,03,542/-towards amount freight paid. The auditor’s report was to the effect that the TDS has not been directed from the freight paid neither any declaration for having one or two trucks and aggregate of the amount of such sums credited or paid during the financial year does not exceed Rs. 50,000/- nor the PAN numbers of truck owners were obtained.
The assessee claimed that the individual truck was settled from market according to the availability of trucks and requirement of the company at a settled freight and after settlement freight at a time not more than Rs. 20,000 was paid. He further stated that trucks are not organized sector, individual truck is arranged and payment of freight is made to him and hence no TDS has been deducted.
The Tribunal observed that the assessee is nothing but an intermediary between the clients and the vehicle owners/operators and mainly facilitates the contract for carrying goods.
“Having regard to the volumes of the freight received and paid in contrast to the earnings of the assessee, analyzed in the background of the observations of Ld. CIT(A) that the assessee had incurred only office expenditure and no expenditure relating to transportation of goods such as loading, unloading charge etc., has been debited, we are of the considered opinion that the assessee actually engaged himself not in the transportation business, but only facilitating or arranging transportation for various parties and he is a mere lorry booking agent. We, therefore, are of the opinion that the assessee cannot be held as the “person responsible” for deduction of tax at source and to the facts of the case the provisions under section 194C of the Act have no application,” the Tribunal said.
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