1. Shri Hardarshan Singh Vs. DCIT New Delhi , ITA No. 1447(Del)/2011 (Dated: August 26, 2011) - DELHI ITAT
ISSUE: Whether the assessee, a transportation company, which earns commission income for arranging trucks for its clients from other transport companies, is not required to deduct TDS on payments made by it to the other transport company for transporting the goods as no work of transportation of goods is carried on by the assessee itself.
Held: that assessee arranges trucks of other transport companies for carriage of goods for which he receives commission from them which is credited to profit and loss account. In respect of this income, the assessee does not undertake the business of carriage of goods and no work is performed by him. The assessee acted as intermediary between the client and the other transport company.
The company carried the goods and the advance received from the customer was handed over to the driver of the company. In the bill, the advance and the commission of the assessee were deducted from the bill amount and the assessee had to receive commission from the company. Thus, it cannot be said that assessee really entered into the contract of transportation of goods. He merely acted as an intermediary. The bills are prepared in a manner that net commission income becomes payable by the actual transporter to the assessee. Thus, there was no liability on assessee for deduction of tax at source. Hence, no addition could have been made u/s 40(ia).
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2. CIT, Chennai Vs. M/s Madras Fertilizers Ltd , Tax Case (Appeal) No. 333 of 2005 (Dated: August 3, 2011)- MADRAS HIGH COURT
Held: “the accounts of the assessee showed NIL as regards the carry forward of loss and unabsorbed depreciation, rightly, the Commissioner of Income Tax revised the order of the officer to take the entire book profit of Rs.11,22,65,758/-, without any further adjustments for the purpose of working out 30% profit under Section 115J of the Income Tax Act, 1961. Thus, even though the assessee contended that mere adjustment as against the general reserve by itself would not defeat the claim of the assessee for considering the unabsorbed declaration in computation of the profit for the next year in terms of Section 205(1) (b), yet, the fact remains that when the accounts were made up for the assessment year 1989-1990, the loss and unabsorbed depreciation remained NIL. On the factual position that the assessee had no unabsorbed loss or unabsorbed depreciation to be carried forward for any consideration in the year under consideration, rightly, the Commissioner of Income Tax gave the direction which is in accordance with the provisions of the Act, as well as the Income Tax Act, 1961.“
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