Rajesh Jain Vs. DCIT, Circle-1(1), Bhilai (C.G)

Parties Involved

Facts Summary

The assessee, Rajesh Jain, carrying on business under the proprietary concern Jindutt Enterprises, was engaged as a C&F agent for various pharmaceutical companies and derived income from commission, reimbursement of expenses, interest, and house property. The assessee filed the return of income for the assessment year 2018-19 on 04.10.2018 declaring total income of Rs.19,67,490/-. The case was selected for complete scrutiny under the E-assessment Scheme, 2019 for verification of business expenses. The Assessing Officer observed that the assessee had shown gross receipts of Rs.1,74,74,377/- and net business income of Rs.21,46,897/-. The major expenses claimed included salary expenditure of Rs.57,82,553/- and transport expenditure of Rs.39,58,810/-. On verification of the transport expenses, it was found that payments aggregating to Rs.35,95,725/- had been made to six transporters without deduction of tax at source. The assessee explained that no tax was deducted in view of section 194C(6), as the transporters had furnished their PANs and declarations regarding ownership of fewer than ten goods carriages. However, the assessee admitted that the particulars of such payments had not been reported in the quarterly TDS statements in Form 26Q as required u/s 194C(7). The Assessing Officer disallowed 30% of the transport payments of Rs.35,95,725/-, amounting to Rs.10,78,718/-, u/s.40(a)(ia) and added to the total income. The total income was finally assessed at Rs.30,46,210/- as agai…

Legal Issues

• 1. Whether the assessee is entitled to exemption from deduction of tax at source under section 194C(6)?
• 2. Whether the failure to furnish prescribed particulars in Form 26Q can be treated as a mere technical lapse?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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