Ita/5027/2010 Of The Commissioner Of Income Tax v. M/S Maruti Subray Patil

IN THER HIGH COURT OF KARNATAKDHARWAD BENCH ON THE: 2 DAY OF JULY, 2015) BEEBEO THE HON’BLE MR.JUSTICE RAVI MALIMATH AND THE HON’BLE MR.JUSTICE G. NARENDAR LT.A. No 5027/2010 BETWEEN 1.THERE COMMISSIONER OF INCOME TBELGAUMBELGAUM 2.THER ACICIRCLE-2, BELGAUM .. APPELLANTS (BY SRLY.V.RAVIRAJ, ADVOCATE) ANI M/S. MARUTI SUBRAY PATILJADHAV COMPLEX, P.B.ROADBELGAUM ~ RESPONDENT (BY SRI.V.CHANDRASHEKAR, SRLS.AANNAMALI & SRILSHASHANK HEGDE, ADVOCATESFOR SRLA. SHANKAR, ADVOCATE)FOR SRLA. SHANKAR, ADVOCATE) THIS ITA IS FILED U/S.260 A OF THE INCOME-TAX ACT, 1961AGAINST ORDER DTD:25/11/2009 PASSED IN LT.A.NO.86/PNJ/2009 ONTHE FILE OF THE INCOME TAX APPELLATE TRIBUNAL, PANAJIBENCH, PANAJLPARTLY ALLOWING THE APPEAL AND CONFIRM THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX,BELGAUM FOR THE ASSESSMENT YEAR 2005-06, RESERVED ON 13.07.2015 PRONOUNCED ON 29.07.2015 THIS APPEAL COMING ON THIS DAY, GNARENDAR J.,DELIVERED THE KFOLLOWING JUDGMENT This appeal is preferred under the provisions of Section 260A ofITA Act, 1961, arising out of the order dated 25.11.2009 passed by theIncome Tax Appellate Tribunal, Panaji Bench, Panaji in ITANo.86/PNJ/2009, praying that the Hon’ble Court may be pleased to} I)Formulate the substantial questions of law andfurther hasstated hereinafter,stated hereinafter, IT)Allow the appeal and set aside the orders passed by theITAT, Panaji Bench in ILA No.&6/PNJ/2009, dated25.11.2009, whereby the order ofthe appellate Commussionerdated 30.03.2009 confirming the order of the assessing officerwas set aside and confirm the assessment of the assessingauthorityfor the assessmentyear 2005-06.ITAT, Panaji Bench in ILA No.&6/PNJ/2009, dated25.11.2009, whereby the order ofthe appellate Commussionerdated 30.03.2009 confirming the order of the assessing officerwas set aside and confirm the assessment of the assessingauthorityfor the assessmentyear 2005-06. 2.The above appeal is filed by the Revenue impugning the orderpassed by the Tribunal. 4 The substantial questions of law that arise for consideration 1n the above appeal are as follows; *!Whether in thefacts and circumstances ofthe case, the [LATas right in law in deleting the addition made under Section40 (a)(ta) tgnoring the facts that there was oral contract wittransporters which was evidentfrom the fact that, paymentsmade to each lorry owner exceeded Ks.50,000¢as right in law in deleting the addition made under Section40 (a)(ta) tgnoring the facts that there was oral contract wittransporters which was evidentfrom the fact that, paymentsmade to each lorry owner exceeded Ks.50,000¢ ? Whether the ILAT is right in deleting the addition madezgnoring E:xplanation-LLl to Section 194C defining “Work”as only carriage ofgoods and not sub-contract of entire workas hela by ILAI and also ovelooking Uttaranchal HighCourt decision in 290 TTR 530 wherein, wt 1s held that onceagents are appointea by contractor lability to IDS arisesunder Secttion 194C¢zgnoring E:xplanation-LLl to Section 194C defining “Work”as only carriage ofgoods and not sub-contract of entire workas hela by ILAI and also ovelooking Uttaranchal HighCourt decision in 290 TTR 530 wherein, wt 1s held that onceagents are appointea by contractor lability to IDS arisesunder Secttion 194C¢ 4 Whether the ILAT 1s right in deleting the addition made onthe ground that entire work. undertaken by contractor was nosub-contracted to transporters wgnoring provisions of Section194C(2) which clearlyprovides that, even sub-contracting paryofwork. by contractor also attracts 1.D.S.¢the ground that entire work. undertaken by contractor was nosub-contracted to transporters wgnoring provisions of Section194C(2) which clearlyprovides that, even sub-contracting paryofwork. by contractor also attracts 1.D.S.¢ A The brief facts of the case are as follows: The assessee, who is the respondent herein claims to be in the 4 Whether the ILAT 1s right in deleting the addition made onthe ground that entire work. undertaken by contractor was nosub-contracted to transporters wgnoring provisions of Section194C(2) which clearlyprovides that, even sub-contracting paryofwork. by contractor also attracts 1.D.S.¢the ground that entire work. undertaken by contractor was nosub-contracted to transporters wgnoring provisions of Section194C(2) which clearlyprovides that, even sub-contracting paryofwork. by contractor also attracts 1.D.S.¢ A The brief facts of the case are as follows: The assessee, who is the respondent herein claims to be in the business of transportation. It 1s the further claim by the assessee that hehad entered into a contract with one M/s.Infrastructures Logistics Pvt. Ltd., Goa for transportation of iron ore from Sandur Mines to a placecalled Redi. It is further asserted that under the contract, the assessee hasclaimed to have paid a sum of Rs.5,10,16,407/-. In the books ofaccount of the said assessee, the amount mentioned supra was describedas “Freight Paid’ It 1s the case of the Revenue that the Assessing Authority at thetime of scrutinizing the returns for the assessment year 2005-06 noticedthat the assessee had made ageregate of payment in excess ofRs.50,000/- in a single assessment year and towards freight charges tovatious truck owners/operators, without deducting tax at source, onsuch payments, as mandated under the provisions of Section 194C ofthe IT Act. Upon noticing the discrepancy, the assessee was called uponto explain. Whereupon it was claimed by the assessee that there is nosub-contract and that he has loaded the vehicle whichever had come tothe site and that the heading “freight paid” is a misnomer and a factualerror and that the amount paid in fact represent the hire charges and notfreicht charges. Rejecting the specious contentions the AssessingAuthority disallowed certain amounts. The Assessing Authority noticing the discrepancy was constrained to invoke the provisions of Section40(a)(1a) of I.T. Act and disallowed the amount of Rs.4,07,73,435/-. 5]The assessee agerieved by the assessment order preferred anappeal before the Commissioner Appeals, contending that there wasneither an oral or written contract, by which the contract work oftransportation was sub-contracted to the truck owners and it wascontended that the amounts paid represent the hire charges and are notfreight charges. It was also contended that in the absence of the sub-contract the amount though described as freight charges ought to beread as “hire charges only’. The Commissioner (Appeals) is said to havethoroughly scrutinized the records and is said to have found that thepayments made to the various vehicle ownets depended on the quantitytransported and in this regard, he has relied upon certain vouchers datedbetween 13[9-]Match to 31[/9]March for the year 2005, wherein it is seenthat for the same distance, different rates have been paid to differentvehicles under different voucher numbers and thus arrived at theconclusion that the amounts expended was indeed freight charges andnot hire charges. Though, it was the specific case of the assessee that theamounts paid reflect only the hire charges. No material has been placed to demonstrate the same either before the Assessing Officer or beforethe Commissioner (Appeals). Hence, the Commissioner (Appeals) by adetailed and reasoned order was pleased to conclude that the amountsallegedly paid are indeed freight charges and not hire charges andrejected the contention of the assessee that the entry “freight paid” is onaccount of the mistake committed by the accountant and in fact suchamount represent the hire charges only. It 1s the admitted case of theassessee that there are no written contract nor bills issued by thetransporters and the entire case is sought to be demonstrated andsupported only by the vouchers maintained by the assessee. to demonstrate the same either before the Assessing Officer or beforethe Commissioner (Appeals). Hence, the Commissioner (Appeals) by adetailed and reasoned order was pleased to conclude that the amountsallegedly paid are indeed freight charges and not hire charges andrejected the contention of the assessee that the entry “freight paid” is onaccount of the mistake committed by the accountant and in fact suchamount represent the hire charges only. It 1s the admitted case of theassessee that there are no written contract nor bills issued by thetransporters and the entire case is sought to be demonstrated andsupported only by the vouchers maintained by the assessee. 6,The other undisputed fact is that the asseessee has described thepayments in the vouchers as “freight charges” (though it is alleged to bethe result of error by the assesseee’s accountant) in its books ofaccountws TYIn the above background of facts the assessee aggrieved by theorder of the Commissioner (Appeals) preferred the appeal before theIncome Tax Appellate Tribunal impugning the conclusion of theassessing officer and its confirmation by the Commissioner (Appeals)concluding that the provisions of Section 194C(2) of the Act was attracted and the assessing authority invoked consequential provisions ofSection 40(a)(1a) of the Act. 8 The learned counsel for the appellant would take the Courtthrough the order rendered by the appellate Tribunal. He would statethat the Tribunal after merely recanting the respective submissions ofthe parties before the authorities below, thereafter, stmply proceeded torely upon the judgments and citations, to dispose off the appeals. Hewould submit that the Tribunal misdirected itself by relying upon thebroad principles to dispose off the appeal, which has resulted in gravemuscatriage of justice. Q_The appellant’s counsel dilating at the bar, would point out thatthe facts pleaded herein and the facts in the case laws relied upon are atvariance and the facts are not identical. He would submit that theTribunal erred in observing the fact that the decisions of theVisakahpattanam Bench involved almost similar facts. He would furthersubmit that the Tribunal erred 1n accepting the contention of theassessee at the face value. The contention is that there are no writtensub-contract and hence, in the absence of written sub-contracts thepayments have to be construed as hire charges is not only matertally irregcular, but contrary to the law resulting in travesty of Justice anrendition of an illegal order which resulted in unjustified avoidance ofTax. 10.The appellant would further submit that the Tribunal materiallyetred in not appreciating the various contentions on behalf of therevenue. He would contend that the Tribunal erred in holding theassessing authority responsible for not placing on record, any material todemonstrate that the obligation of the assessee are taken over by thetruck owners engaged by the assessee. 11.The appellant counsel would further submit that the Tribunalerred in holding that the element of risk remained with the assessee onlyand was not transterred to the truck owners. He would submit that it isnot the case of the assessee nor the assesseee placed any material todemonstrate or buttress the case made out by the Iribunal, 1?.The appellant counsel would submit that the reasoning of theTribunal that the Revenue failed to place any material to controvert “oralstatement’ of the assessee is not only perverse but also contrary to allknown canons of evidence. He would submit that the reasoning of the Tribunal calling upon the tfevenue to disprove or controvertunsubstantiated and uncorroborated self serving statement of theassessee 1s not only whimsical but highly illegal. He would state that noburden is caste upon a person to disprove anything that has not beenproved, 1?.The appellant counsel would submit that the reasoning of theTribunal that the Revenue failed to place any material to controvert “oralstatement’ of the assessee is not only perverse but also contrary to allknown canons of evidence. He would submit that the reasoning of the Tribunal calling upon the tfevenue to disprove or controvertunsubstantiated and uncorroborated self serving statement of theassessee 1s not only whimsical but highly illegal. He would state that noburden is caste upon a person to disprove anything that has not beenproved, 13,The learned counsel for the appellant would submit that thevouchets and entries in the books of accounts are the evidence ofcontract entered into and executed on behalf of the assessee. He wouldsubmit that it is the case of the assessee that he owned only five trucksand that the trucks of third party has been used to transport thematerials, that is to execute the contract entered into between theassessee and his principal. He would submit that the same are evidenceof an implied agreement and agreements include oral agreement also. Hewould state that it is an undisputed fact that no material has been placedby the assessee to either (a) demonstrate that no written contract hasbeen executed between the truck owners and the assessee; (b) nomaterial 1s placed by the assessee to demonstrate that the element of riskremained with the assessee only and was not transferred to thetransporter; (c) no material was placed before the original authority or the I'ribunal to demonstrate that the payments are hire charges only annot freight charges; and (d) no material 1s placed either before theTribunal or the authorities to corroborate and demonstrate thestatement / alibi of the assessee that the entry in the books of accountsdescribed as “freight charges”’ is as a result of factual mistake. He woulsubmit that in the light of the above, the question of disproving aunsubstantiated or non existing facts does not arise. He would state thatshifting of the burden of proof on the revenue to disprove the non-existing fact is contrary to law under the Indian Evidence Act and on theabove contentions the appellants counsel would submit that theimpugned order warrant interference at the hands of the Court andrequires to be set aside. 14)Per contra, the learned counsel for the respondent/assesseewould reiterate his contentions that the payments are indeed hire chargesand the entry in the books of accounts and vouchers describing thepayments as “freight charges” is a factual mistake committed by theassessee’s accountant. That apart he would submit that in the absence ofthe written sub-contract, it 1s erroneous on the part of the revenue topresume orf assume the violation of the mandate of Section 194C(2). H would also strongly condemn consequential invocation of the provisionsof Section 40(a)(1a) of the Act. He would submit that the tnvocation 1sbad in respect of the payments that have already been made and that theprovision could be invoked and would be applicable only in respect ofpending payments that are yet to be made. He would submit that if theinterpretation placed by the Assessing Authority is allowed, it wouldresult in grave in justice as the consequence are very grave and have thecapacity to financially ruin the assessee put him out from the businesspermanently. 15)The respondent counsel would relay on the various judicialpronouncements by the Tribunals and of the Panjab and Harayana HighCoutts. 16,The above appeal came to be admitted on 03.02.2011 on thesubstantial questions of law as framed by the revenue. Apart from thesame, this Court would also deem it necessary to frame an additionalissue, which has arisen incidentally as a result of the approach adoptedby the Tribunal, the same 1s as follows: Whether in thefacts and circumstances of the case, the incometax appellate Inibunal was right in allowing the appeal by merely relying on broadprinciples without reference to the criticalfacts of thecase? 17.For the sake of brevity and convenience the provisions of Section 15)The respondent counsel would relay on the various judicialpronouncements by the Tribunals and of the Panjab and Harayana HighCoutts. 16,The above appeal came to be admitted on 03.02.2011 on thesubstantial questions of law as framed by the revenue. Apart from thesame, this Court would also deem it necessary to frame an additionalissue, which has arisen incidentally as a result of the approach adoptedby the Tribunal, the same 1s as follows: Whether in thefacts and circumstances of the case, the incometax appellate Inibunal was right in allowing the appeal by merely relying on broadprinciples without reference to the criticalfacts of thecase? 17.For the sake of brevity and convenience the provisions of Section 194C of IT Act, are culled out for reference purpose only. 8*(1+![(1) Any person responsible for paying any sum to anyresident (hereinafter in this section referred to as the contractor) forcarrying out any work. (including supply of labourfor carrying out anywork) in pursuance ofa contract between the contractor and— shall, at the time ofcreait ofsuch sum to the account ofthe contractor or atthe time ofpayment thereof in cash or by issue of a cheque or draft or byany other mode, whichever ts earlier, deduct an amount equal to— (z)oneper cent in case ofadvertising,(22)in any other case twoper cent, ?ofSUC SUas income-tax on income comprised therein: Provided that no individual or a Hindu undividedfamily shall be lableto deduct income-tax on the sum credited or patd to the account of thecontractor where such sum is credited or paid exclusively for personalpurposes ofsuch individual or any member ofFlindu undwidedfamu!y.| (2) Any person (being a contractor and not being an individual or aHindu undividedfamily) responsible forpaying any sum to any resident(hereafter in this section referred to as the sub-contractor) inpursuance ofacontract with the sub-contractor for carrying out, or for the supply oflabourfor carrying out, the whole or any part of the work, undertaken bythe contractor orfor supplying whether wholly orpartly any labour whichthe contractor has undertaken to supply shall, at the time of creatt of suchsum to the account of the sub-contractor or at the time ofpayment thereofin cash or by issue ofa cheque or draft or by any other mode, whichever tsearlier, deduct an amount equal to oneper cent ofsuch sum as income-laxon income comprised therein: /Provided@@@@@ Explanation I, —@@@@@ Explanation H.— XXXXX Explanation Ill, —For the purposes of this section, the expression“Spork” shall also include (a)@@@@@(b)@@@@@ (c)carriage ofgoods andpassengers by any mode of transportother than by railways; (3) No deduction shall be made under sub-section (1) or sub-section (2)from— (2) the amount ofany sum credited orpata or likely to be credited or paidto the account of, or to, the contractor or sub-contractor, if such sumdoes not exceed twenty thousand rupees)to the account of, or to, the contractor or sub-contractor, if such sumdoes not exceed twenty thousand rupees) Provided that where the aggregate ofthe amounts ofsuch sums createdor paid or likely to be credited or paid during the financial yearexceeas fifty thousand rupees, the person responsible for paying suchsums referred to in sub-section (1) or, as the case may be, sub-sectionor paid or likely to be credited or paid during the financial yearexceeas fifty thousand rupees, the person responsible for paying suchsums referred to in sub-section (1) or, as the case may be, sub-section (2) shalt be Lable to aeauct income-tax [under this section: |” 1&8The provisions of Section 40(a)(ia) are culled out for the sake of ; 8:28.28;2* 40. Notwithstanding anything to the contrary in sections 30 to [38], thefollowing amounts shall not be deducted in computing the incomechargeable under the head “Profits and gains of business orprofession ,—following amounts shall not be deducted in computing the incomechargeable under the head “Profits and gains of business orprofession ,— (2) shalt be Lable to aeauct income-tax [under this section: |” 1&8The provisions of Section 40(a)(ia) are culled out for the sake of ; 8:28.28;2* 40. Notwithstanding anything to the contrary in sections 30 to [38], thefollowing amounts shall not be deducted in computing the incomechargeable under the head “Profits and gains of business orprofession ,—following amounts shall not be deducted in computing the incomechargeable under the head “Profits and gains of business orprofession ,— (a)in the case ofany assessee—/(t) any interest (not being interest on a loan issued for publicsubscription before the 1st day of April, 1938), royalty, fees fortechnical services or other sum chargeable under this Act, which 1spayable,—/(t) any interest (not being interest on a loan issued for publicsubscription before the 1st day of April, 1938), royalty, fees fortechnical services or other sum chargeable under this Act, which 1spayable,— (A)outstae Indta; on (B)in India to a non-resident, not being a company or to aforeign company,foreign company, Provided@@@@@ (ta) any interest, commission or brokerage, [rent, royalty,| fees fonprofessional services orfeesfor technical servicespayable to a resident,or amounts payable to a contractor or sub-contractor, being resident,for carrying out any work (including supply oflabourfor carrying outany work), on whith tax 1s deductible at source under ChapterAVLI-B and such tax has not been deducted or, after deduction, hasnot been paid during the previous year, or in the subsequentyearbefore the expiry ofthe timeprescribed under sub-section (1) ofsection&''A:professional services orfeesfor technical servicespayable to a resident,or amounts payable to a contractor or sub-contractor, being resident,for carrying out any work (including supply oflabourfor carrying outany work), on whith tax 1s deductible at source under ChapterAVLI-B and such tax has not been deducted or, after deduction, hasnot been paid during the previous year, or in the subsequentyearbefore the expiry ofthe timeprescribed under sub-section (1) ofsection&''A: 19.A perfunctory reading of the provisions of Section 194C of the Act obviates the necessity for any interpretational exercise as theprovisions are unambiguous. A reading of the provisions of Section194C mandates that any person who is involved in executing anycontract orf carrying out any work under a contract between anindividual and company etc., and where the ageregate of payments tosuch person/s or agency engaged by a contractor exceeds Rs.20,000/-, amandate 1s cast on such persons making payments to deduct a sum ofone percent or two percent at the time of making payments to thepetson, who carries out the work or such portion of the work under theContract. Thus in a sense, the provisions of Section 194C enjoins apositive duty on the persons making the payment to deduct a sum at thespecified rate and as mandated under the Act and that too at the time ofmaking of payments and the deducted amounts are to be deposited withthe authorities. One such activity which has been brought within the sweep of the above section is transportation of goods or carriage ofgoods by any mode of transport other than the railways. 2()The provisions of Section 40(a) provides an exemption from therigors of Chapter XVII-B, and the said Chapter includes the provisionsof Section 194C, provided aggregate of payments made to aperson/entity does not exceed Rs.20,000/-. 1.In the background of the law it is necessary to revisit the facts ofthis case and address the poser as to whether the said provisions areapplicable and the revenue was justified in invoking the same. sweep of the above section is transportation of goods or carriage ofgoods by any mode of transport other than the railways. 2()The provisions of Section 40(a) provides an exemption from therigors of Chapter XVII-B, and the said Chapter includes the provisionsof Section 194C, provided aggregate of payments made to aperson/entity does not exceed Rs.20,000/-. 1.In the background of the law it is necessary to revisit the facts ofthis case and address the poser as to whether the said provisions areapplicable and the revenue was justified in invoking the same. 2?)The undisputed facts are that the assessee declared a total incomeof Rs.25,14,811/- for the assessment year 2005-06. On an inspection ofthe accounts by the A.O., it was revealed that the assessee had receiveda sum of Rs.5,74,48,399/- as freight charges from M/s.InfrastructuresLogistics Pvt. Ltd., Goa and out of that he declared that he had paid asum of Rs.5,10,16,407/-. The said information was furnished videquestioner dated 06.09.2007, wherein the assessee was asked to furnishthe details of freight paid and also called upon to explain the reason as towhy a tax was not deducted on the freight charges paid. In response to the same, the assessee vide his letter dated 19.11.2007 stated that it 1s nota freight charges but it is lorry hire charges and that by mistake theaccountant has used the word freight paid. Thus it was asserted for thefirst time by the assessee that he had hired the vehicles belonging toothers for transportation of materials under contract with principle. Itwas also asserted that there are no written contracts with the lorryowners and who ever was available had been employed by them andpaid hire charges and that as the lorry owners are not fleet owners andpossess one orf two trucks, the question of making TDS from hircharges did not arise. With reference to the explanation offered underthe letter dated 19.11.2007, a further query was addressed by theAssessing Officer on 12.12.2007. It was pointed out to the assessee thathis explanation vide letter dated 19.11.2007 was self contradictory. It waspointed out that in one breath he has stated that the amounts paid to thelorry owners is not freight charges but hire charges and in next breath,he admits that there are no contracts. It was further pointed out thatthere is no hire agreement presented before the Assessing Officer. It wasfurther pointed out that except for a few cases, the ageregate of amountspaid to each lorry owners was in excess of Rs.50,000/- and as noted supra only those payments of aggregate which do not exceedRs.50,000/- are exempted under sub-section 3 of Section 194 of the Actand where no single payment of Rs.20,000/-, the same are exemptedfrom the purview of sub-section 3 of Section 194C and failure attractsthe consequences under Section 40(a)(1a) of the Act. weyIn reply, the assessee has reiterated that the word freight paid hasbeen mistakenly used by his accountant and that there are no contractswith the lorry transporters and that even if it is assumed that there isimplied contract, then the contract 1s for one trip and that the secondtrip will be an independent and that no amount in excess of Rs.20,000/-has been paid. That is, in sum and substance, the defence of the assesseeis that as he has not paid any transporter in excess of Rs.20,000/- for anysingle trip, that is there is no single transactions where payment hasexceeded Rs.20,000/-.But it 1s to be noted that it has not been denied bythe assessee, that in most of the cases, the ageregate of sums paid in theassessment year is in excess of Rs.50,000/- It 1s seen that the assesseehas conversely argued before the assessing authority stating that he hasnot made any single payment either in excess of Rs.20,000/- orRs.50,000/- and hence, he has sought exemption from the purview of the Act mandating deduction of tax at soutces.But yet again it is to benoted that there is no denial of the fact that the ageregate of thepayment in the assessment year in respect of the most of the$transporters exceeds Rs.50,000/and the provisions of Section 194C(1)tread _with Section 194C(i) mandates that, if the sum credited/paid to$any person exceeds Rs.50,000/in a financial year, then the said sumsare liable for deduction of tax at source, in other words, tax is to bededucted at source (IDS). The assessee has also relied upon a circulardated 01.10.2004 and the same has also been rejected 1n view of the factthat the provisions of Section 194C(1) had been amended with effectfrom 01.10.2004. Thus, in effect all the contentions raised by theassessee wete negated and the assessing authority invoking theprovisions of section 4O(a)(ia) of the Act disallowed a sum ofRs.4,07,73,435/- out of the declared sum of Rs.5,10,16,407/- as thisrepresented the total sum of amounts, where the ageregate of paymentsmade to the transporters exceeded Rs.50,000/- in the assessment year. Itis seen that the Assessing Authority has also brought out specificinstance which go to demolish the contention of the assessee. The assessee and his Chartered Accountant attended hearing before theAssessing Authority, DA.The dispute in a nutshell is as to whether the provisions ofsection 194C of the Act can be invoked only if any single paymentexceeds Rs.50,000/- or can be invoked if the ageregate of payment in anassessment year exceeds Rs.50,000/-. As stated supra there is nocontroversy regarding the said contention, the provision is clear andunambiguous and the word ageregate has been specifically used. In thatview of the matter, the assertion on behalf of the assessee, that only inrespect of payment which exceeds Rs.50,000/- is liable to be deducted atsource is liable to be reyected and 1s accordingly rejected. Accordingly,the substantial questions of law as framed by the appellant/revenue isanswered in favour of the revenue. D5.The simple issue has been approached by the Tribunal in anerroneous manner. The Tribunal under the guise of broad principles hasmisdirected itself resulting in adjudication of the dispute on the basis ofinferences and assumption, contrary to law. The Tribunal has rendered afinding without reference to the basic and critical facts which werenecessary for adjudication. The Tribunal has gravely erred in trying to adjudicate the appeal merely on the basis of broad principles. TheTribunal gravely erred in inferring that, there ought to be a sub-contractin writing and only in a such an event the provisions of the Act can beinvoked. It further seriously erred in holding the factual issue in favourof the assessee, when not even a shred as evidence was placed before it,A pointer in this direction, 1s the finding that no risk was undertaken bythe lorry owners. It was not the case of the assessee before the AssessingAuthority ot Commissioner (Appeals). The said contention beingquestion of fact, the appellate Tribunal erred in accepting the same andon the contrary ought to have outright rejected the same. It ought tohave seen that it is an improvement to the case put forth by the assesseebefore the original authority. It 1s not the finding of the Tribunal thatany independent material either in the form of say of lorry owners, etc.,wete placed before it compelling it to take a different view than the oneadopted by the original authority. The Tribunal has also gravely erred inholding that the assessee/appellant had made out a case because therevenue failed to place any material before it, contraverting the vagueand mere oral assertion of the assessee. The said reasoning is contrary toall known cannons of the law of evidence, logic and law mandates that the burden and onus is on the person, who alleges a fact, to prove thesaid fact. The assessee has pleaded that the entries “freight paid”’ 1s oaccount of a mistake committed by their accountant and they have comeup with the excuse very belatedly. This being the factual issue, theTribunal did not deem it necessary to call upon the assessee todemonstrate the said fact, but proceeded to accept the statement as aproven fact. It appears that the Tribunal has diverted itself fromaddressing the core issue, that is whether the assessee has paid any sums,the ageregate of which exceeds Rs.50,000/- in the assessment year to anysingle entity. The Tribunal has not addressed itself to any of the findingsof fact rendered by the Assessing Authority. In particular, severalinstances of the ageregate of payments have exceeded Rs.50,000/- in theassessment year have been placed on record. It does not render anyreasoning to unsettle the finding of the original authority, that even theaereement can also be an oral and that the transactions with the lorryowners/transporters is within the purview of the provisions of the Actas it amounts to carriage of goods other than the railways, 26.The finding that the appeal requires to be allowed in view of thedecision by the Co-ordinate Bench and that of the Punjab and Haryana High Court in the case of Commissioner of Income Tax Vs. United RiceLand Limited reported in (2010) 322 TTR 594 (P&H) 1s erroneous,Therein the finding of fact, that the amounts paid to the transporter isby way of hire charges, was rendered on the basis of evidence furnishedby the alleged transporters. The assessee therein was in the manufacturerand export of rice and there was an identified route, quantity etc., in viewof which certain facts could be easily identifiable. The transportation ofgoods was from its premises to the port and in the course of its export,In the present case, the facts and details are not only hazy but areobfuscated due to lack of clarity. Apart from stating that the ore wasrequired to be transported from point (a) to point (b), no details areprovided as to whether the point (b) was a licenced or registered place,where minerals could be stored there, etc., It is seen that a huge sumamounting to Rs.5=O00 crorers is spent merely for transportation of iroote from point (a) to point (b), no details are forth coming whether thetransportation 1s in the course of business or 1s being transported to thehands of end user. In such situation, this Court finds it hard to believethe version put out by the assessee. oT.The counsel for the respondent is unable to answer the queries 1nthis direction. As stated earlier, the Tribunal gravely erred in adverselyinferring against the revenue for having failed to disprove the oralassertion of the assessee. 28.On the other hand, the Tribunal ought to have adversely inferredagainst the assessee for having failed to place material to substantiate itsoral assertion. Consequently, the order of the Tribunal is vitiated andrequires to be interfered with. Accordingly, the impugned order underappeal is set aside and the order of the original authority dated26.12.2007 stands resurrected. The case of the assessee is rejected andthe question of law formulated by the appellant stands answered intavour of the revenue. 29)The appeal stands disposed of in the above terms. Sd/-JUDGE Vnp* Sd/-JUDGE