Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “B” BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals)-V, Chennai, dated 25.02.2014 and pertains to assessment year 2006-07. The only
Dr. B. Nischal, the Ld. Departmental Representative, submitted that the assessee paid hire charges of `51,19,851/- to various parties for hiring the car. However, TDS was not deducted at source. According to the Ld. D.R., the assessee is expected to deduct tax under Section 194C of the Income-tax Act, 1961 (in short 'the Act'). Therefore, the Assessing Officer, applying the provisions of Section 40(a)(ia) of the Act, disallowed the payment of hire charges. On an enquiry from the Bench whether it is simply hiring of the vehicles or the payment was made for carrying out any work?
The Ld. D.R. clarified that the payment was made only for hiring of the car. However, the Ld. D.R. referred to the grounds of appeal filed before this Tribunal and submitted that when any payment was made to a resident contractor, i.e. an owner of the vehicle, tax has to be deducted at the time of crediting of sum to the account of the vehicle owner. Since the tax was not deducted, according to the Ld. D.R., the CIT(Appeals) ought not have allowed the claim of the assessee.
We heard Sh. T. Banusekar, the Ld.counsel for the assessee also. Admittedly, the assessee hired a car/motor vehicle and paid assigned by the assessee other than simply hiring a vehicle. This Tribunal is of the considered opinion that a mere hiring of vehicle would not fall within the meaning of “carrying on any work”. Unless and until some work was assigned to an owner of vehicle other than hiring the vehicles, this Tribunal is of the considered opinion that the provisions of Section 194C are not applicable at all. In this case, admittedly, the assessee hired vehicle from various vehicle owners and used the same in his business to carry out his work. Therefore, no part of the work was assigned to the vehicle owner. This Tribunal is of the considered opinion that it is a case of hiring of vehicles, therefore, at the best, the provisions of Section 194-I of the Act would be applicable.
We have also carefully gone through the provisions of Section 194-I of the Act. Section 194-I was amended with effect from 13.07.2006 by the Taxation Laws (Amendment) Act, 2006.
Therefore, the hire charges/rent would be subjected to deduction of tax only from the assessment year 2008-09 and not for the assessment year 2006-07. In the case before us, the assessment year under consideration is 2006-07. Therefore, the assessee is
In view of the above, we do not find any reason to interfere with the order of the CIT(Appeals). Accordingly, the same is confirmed.
In the result, the appeal of the Revenue is dismissed.
Order pronounced on 19th June, 2015 at Chennai.