Itxa/1219/2012 Of Commissioner Of Income Tax - 22 v. M/S.bhail Bulk Carriers

k IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1219 OF 2012 Commissioner of Income Tax - 22..Appellant-Versus-M/s. Bhail Bulk Carriers..Respondent ........... Mrs. S.V. Bharucha for the Appellant.None for the Respondent. ........... CORAM: S.C. DHARMADHIKARI AND A. A. SAYED, JJ. DATE :- 12[th] NOVEMBER, 2014 P.C.: 1We heard Mrs. Bharucha in support of this Appeal. The Appeal challenges the order passed by the Tribunal on 7[th] March, 2012 in Income Tax Appeal No.3536/Mum/2011. The Assessment Year is 2007-2008. 2The Appeal arose out of the order of the First Appellate Authority dated 15[th] February 2011. The only issue was dis-allowance of Rs.56,03,210/- under section 40(a)(ia) for the failure to deduct tax at source under section 194C of the Income Tax Act, 1961. The Tribunal 1/3 found that this dis-allowance was not permissible because the Assessee a partnership firm is in the business of transport. It is a transport contractor. It was awarded a contract of Oil Transportation to various locations of Bharat Petroleum Corporation Ltd. and other companies. The Assessee received during the year in question Rs.2,83,06,986/- towards freight charges. The contract document shows that the Assessee alone was responsible for transportation of oil from one destination to other. The contractual liability was discharged by transporting oil mostly through the Assessee's own tankers and also from some hired tankers belonging to out side parties. An amount of Rs.1,79,03,198/- was paid to various parties and the Assessee furnished the details. The amounts paid and summary thereof is noted and what the Assessing Officer, the First Appellate Authority and Tribunal found that TDS (Tax Deducted at Source) had not been remitted or there is no deduction in cases of third parties. The Tribunal noted the rival contentions and rendered a finding of fact by referring to the legal provisions that the risk and responsibility for carrying out the contract work was solely that of the Assessee. There is no material to suggest that there was any contract or sub-contract, whether written or oral with the outside tanker owners and the Assessee. It is in these circumstances and when these out side tanker owners do not have any responsibility or liability towards the Bharat Petroleum Corporation Ltd. or katkam 3 itxa 1219.12.doc other principals then, in the absence of any privity, the obligation to deduct the tax at source was not that of the Assessee. In such circumstances, we do not find that the Appeal raises any substantial question of law, the findings cannot be termed as perverse or vitiated by error of law apparent on the face of the record. The Appeal is dismissed. (A. A. SAYED, J.) (S.C. DHARMADHIKARI, J.)