ACIT, CHENNAI V. K.Kodiarasan, CHENNAI

ITA 1847/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90498 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 26-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: T BANUSEKAR
• Keywords: Non-deduction of tax
• Section: 194C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1847/MDS/2014 ( )( / ASSESSMENT YEAR : 2006-07 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE XV, CHENNAI - 600 034. V. SHRI K. KODIARASAN, NO.13, RATHNA GRAHA APARTMENTS, RATHNA NAGAR, TENNAMPET, CHENNAI - 600 034. PAN : AAHPK 8834 B (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : DR. B. NISCHAL, JCIT -.+, / 0 / RESPONDENT BY : SH. T. BANUSEKAR, CA 1 / 2% / DATE OF HEARING : 10.06.2015 3') / 2% / DATE OF PRONOUNCEMENT : 19.06.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-V, CHENNAI , DATED 25.02.2014 AND PERTAINS TO ASSESSMENT YEAR 2006-07. THE ONLY 2 I.T.A. NO.1847/MDS/14 ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO DI SALLOWANCE OF HIRE CHARGES OF ` 51,19,851/- FOR NON-DEDUCTION OF TAX AT SOURCE. 2. DR. B. NISCHAL, THE LD. DEPARTMENTAL REPRESENTAT IVE, SUBMITTED THAT THE ASSESSEE PAID HIRE CHARGES OF ` 51,19,851/- TO VARIOUS PARTIES FOR HIRING THE CAR. HOWEVER, TDS W AS 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, APPL YING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, DISALLOWED THE PAY MENT OF HIRE CHARGES. ON AN ENQUIRY FROM THE BENCH WHETHER IT I S SIMPLY HIRING OF THE VEHICLES OR THE PAYMENT WAS MADE FOR CARRYIN G OUT ANY WORK? THE LD. D.R. CLARIFIED THAT THE PAYMENT WAS MADE ON LY FOR HIRING OF THE CAR. HOWEVER, THE LD. D.R. REFERRED TO THE GRO UNDS 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 T HE ACCOUNT OF THE VEHICLE OWNER. SINCE THE TAX WAS NOT DEDUCTED, ACC ORDING TO THE LD. D.R., THE CIT(APPEALS) OUGHT NOT HAVE ALLOWED THE C LAIM OF THE ASSESSEE. 3. WE HEARD SH. T. BANUSEKAR, THE LD.COUNSEL FOR TH E ASSESSEE ALSO. ADMITTEDLY, THE ASSESSEE HIRED A CAR/MOTOR V EHICLE AND PAID 3 I.T.A. NO.1847/MDS/14 HIRE CHARGES. IT IS NOT THE CASE OF THE REVENUE TH AT ANY WORK WAS ASSIGNED BY THE ASSESSEE OTHER THAN SIMPLY HIRING A VEHICLE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT A MERE H IRING OF VEHICLE WOULD NOT FALL WITHIN THE MEANING OF CARRYING ON A NY WORK. UNLESS AND UNTIL SOME WORK WAS ASSIGNED TO AN OWNER OF VEH ICLE OTHER THAN HIRING THE VEHICLES, THIS TRIBUNAL IS OF THE CONSID ERED OPINION THAT THE PROVISIONS OF SECTION 194C ARE NOT APPLICABLE AT AL L. 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 OWN ER. 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. 4. WE HAVE ALSO CAREFULLY GONE THROUGH THE PROVISIO NS OF SECTION 194-I OF THE ACT. SECTION 194-I WAS AMENDE D WITH EFFECT FROM 13.07.2006 BY THE TAXATION LAWS (AMENDMENT) AC T, 2006. THEREFORE, THE HIRE CHARGES/RENT WOULD BE SUBJECTED TO DEDUCTION OF TAX ONLY FROM THE ASSESSMENT YEAR 2008-09 AND NOT F OR THE ASSESSMENT YEAR 2006-07. IN THE CASE BEFORE US, TH E ASSESSMENT YEAR UNDER CONSIDERATION IS 2006-07. THEREFORE, TH E ASSESSEE IS 4 I.T.A. NO.1847/MDS/14 NOT EXPECTED TO DEDUCT TAX FOR THE PAYMENT OF HIRE CHARGES/RENT DURING THE YEAR UNDER CONSIDERATION. 5. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(APPEALS). ACCORDINGLY, T HE SAME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON 19 TH JUNE, 2015 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 19 TH JUNE, 2015. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-V, CHENNAI 4. 1 92 /CIT-X, CHENNAI-34 5. 7: -2 /DR 6. ;( < /GF.