COMMISSIONER OF INCOME TAX Vs. BHAGWATI STEELS

JUDGEMENT

(1.) The revenue has approached this Court under Section 260A of the Income Tax Act, 1961 (for brevity "the Act") challenging the order dated 30-4-2009, passed by the Income Tax Appellate Tribunal, Chandigarh (for brevity "the Tribunal") in respect of the assessment year 2006-07 while deciding I. T. A. No. 63/Chandi/2009. The revenue has claimed that from the order of the Tribunal two substantial questions of law would emerge and are required to be adjudicated by this Court which are as under:

(2.) The facts of the case in brief are that the assessee-respondent filed its return of income for the assessment year 2006-07 declaring its income of Rs. 37,03,513. Thereafter, assessment was completed under Section 143(3) of the Act on 27-11-2008, assessing the income at Rs. 2,47,41,968 as various additions were made by the assessing officer (A-l). The assessee-respondent filed an appeal before the Commissioner (Appeals) who partly allowed the appeal, vide his order dated 12-1-2009 (A-2). The assessee-respondent then filed another appeal before the Tribunal by pleading the following four grounds:

(3.) Re: Question No. 1. On the first question, the Tribunal recorded a categorical finding of fact that there was no material on record to prove any written or oral agreement between the assessee and the recipients of goods for transportation or carriage thereof. The Tribunal had further observed that there was no material to show that the payments of freight had been made in pursuance of a contract of transportation of goods for a specific period, quantity or price. The aforesaid fact being an essential feature to test the applicability of Section 194C of the Act as considered by a Division Bench of this Court in the case of CIT v. United Rice Land Ltd.,2010 322 ITR 594. A further finding of fact is that the freight payment is Rs. 1,72,723 and none of the individual payments exceeded Rs. 20,000. It was also not disputed that the payments were made on the basis of individual G. Rs. issued by the truck owners for each trip separately. Although the aggregate of payments of two truck owners during the assessment year exceeded Rs. 20,000 which would still not lead to deduction of tax at source because there was no contract for a specific period, price or quantity for carriage of goods. The finding of the Tribunal in paragraph 11 reads thus: