ITO, Tirunelveli V. S.Kalaiarasan, Tirunelveli

ITA 1987/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7835 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-02-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 14-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: S KALAIARASAN
• Section: 194C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1987/MDS/2015 ' (' / ASSESSMENT YEAR : 2006-07 THE INCOME TAX OFFICER, WARD 2, TIRUNELVELI. V. SHRI S. KALAIARASAN, 83, MAIN ROAD, KOODANKULAM, TIRUNELVELI 627 106. PAN : AHFPA 0383 E (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SH. P. RADHAKRISHNAN, JCIT ,-*+ . / / RESPONDENT BY : SH. S. KALAIARASAN, ASSESSEE 0 . 1$ / DATE OF HEARING : 11.02.2016 2!( . 1$ / DATE OF PRONOUNCEMENT : 04.03.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, MADURAI , DATED 26.06.2015 AND PERTAINS TO ASSESSMENT YEAR 2006-07. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SE CTION 40(A)(IA) 2 I.T.A. NO.1987/MDS/15 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') IN RESPECT OF LORRY HIRE CHARGES. 3. WHEN THE APPEAL WAS TAKEN UP FOR HEARING, SHRI S . KALAIARASAN, THE ASSESSEE HIMSELF WAS PRESENT BEFOR E US. HE FILED AN APPLICATION SAYING THAT HE IS A PAUPER AND PERSO N OF WITHOUT MEANS, THEREFORE, HE PRAYED THAT THE APPEAL MAY BE HEARD AND DISPOSED OF ON MERIT. 4. IN VIEW OF THE ABOVE, WE HEARD LD. DEPARTMENTAL REPRESENTATIVE ON MERIT. 5. SH. P. RADHAKRISHNAN, THE LD. DEPARTMENTAL REPRE SENTATIVE, SUBMITTED THAT THE ASSESSEE HIRED LORRIES AND PAID HIRE CHARGES. ACCORDING TO THE LD. D.R., THE ASSESSEE IS A SUB-CO NTRACTOR AND FOR CARRYING OUT THE WORK AS SUB-CONTRACTOR, HE PAID TH E HIRE CHARGES. THEREFORE, THE SUB-CONTRACTOR IS LIABLE FOR DEDUCTI NG TAX IN RESPECT OF THE PAYMENT MADE TO LORRY OWNERS. ON A QUERY FROM THE BENCH, THE LD. D.R. CLARIFIED THAT ON SUB-CONTRACT, THE ASSESS EE HAS TO DEDUCT TAX. THE LD. D.R. HAS ALSO FURTHER CLARIFIED THAT THE LORRY WAS HIRED BY THE ASSESSEE FOR CARRYING OUT HIS SUB-CONTRACT W ORK. 3 I.T.A. NO.1987/MDS/15 6. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE WAS GIVEN SUB-CONTRACT. THE ASSESSEE APPEARS TO HA VE TAKEN THE WORK ON SUB-CONTRACT WHICH INVOLVED MINING / OVERHE AD REMOVAL AND TRANSPORTATION OF THE MINED MATERIAL FROM ANOTHER C OMPANY AND RECEIVED PAYMENT AS A SUB-CONTRACTOR. THEREFORE, T HE ASSESSEE HAS NOT GIVEN ANY SUB-CONTRACT TO ANYONE. THE ASSE SSEE HAS TAKEN UP THE WORK FROM A CONTRACTOR FOR CARRYING OUT HIS WORK. FOR CARRYING OUT THE WORK ASSIGNED TO HIM, THE ASSESSEE HIRED LO RRY AND PAID HIRE CHARGES. THEREFORE, THE MAIN CONTRACTOR WHO ASSIGN ED WORK TO THE ASSESSEE IS LIABLE FOR TAKING TAX AT SOURCE UNDER S ECTION 194C OF THE ACT. AS FAR AS THE ASSESSEE IS CONCERNED, THE PROV ISIONS OF SECTION 194C OF THE ACT IS NOT APPLICABLE IN RESPECT OF THE PAYMENT MADE TO LORRY OWNERS. THE MATERIAL AVAILABLE ON RECORD CLE ARLY ESTABLISHES THAT THE ASSESSEE HAS NOT GIVEN ANY WORK TO ANYONE EITHER ON SUB- CONTRACT OR OTHERWISE. WHILE CARRYING OUT THE SUB- CONTRACT WORK, THE ASSESSEE HIRED LORRY AND PAID LORRY HIRE CHARGES. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE PROV ISIONS OF SECTION 194C IS NOT APPLICABLE AT ALL. 4 I.T.A. NO.1987/MDS/15 7. NOW THE QUESTION ARISES FOR CONSIDERATION IS WHE THER THE HIRE CHARGES WOULD ATTRACT DEDUCTION OF TAX? SECTION 19 4-I OF THE ACT REQUIRES THE ASSESSEE TO DEDUCT TAX IN RESPECT OF H IRE CHARGES. HOWEVER, SECTION 194-I IS NOT APPLICABLE DURING THE YEAR UNDER CONSIDERATION. THEREFORE, DURING THE YEAR UNDER CO NSIDERATION, THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX IN RESPECT OF HIRE CHARGES PAID TO LORRY OWNERS FOR HIRING LORRIES. 8. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDING LY, THE SAME IS CONFIRMED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED ON 4 TH MARCH, 2016 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 4 TH MARCH, 2016. KRI. 5 I.T.A. NO.1987/MDS/15 . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-3, MADURAI 4. 0 81 /CIT-2, MADURAI 5. 69 ,1 /DR 6. :' ; /GF.