M/s Welspun Corp. Ltd., Formerly known as M/s. Welspun Gujarat Stahl Rohren Ltd., V. The Income Tax Officer, TDS-4, GANDHIDHAM

ITA 200/RJT/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2347 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 14-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K CHAKRAVARTY
• Assessee Lawyers: M J RANPURA C A
• Keywords: Question of law; Non-deduction of tax
• Section: 194C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] , ! , ! #$ BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.200/RJT/2014 ( / ASSESSMENT YEAR : 2007-08) M/S.WELSPUN CORP.LTD. (FORMELY KNOWN AS M/S.WELSPUN GUJARAT STAHL ROHREN LTD.) WELSPUN CITY, SURVEY NO.665 VILL.VARSAMEDHI TAL. ANJAR / VS. THE ITO TDS-4 GANDHIDHAM !) ./ ./ PAN/GIR NO. AAACW 0744 L ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+. / APPELLANT BY : SHRI M.J.RANPURA, C.A (AR) ,-)+/. / RESPONDENT BY : SHRI V.K. CHAKRAVARTY, DR 0/ / DATE OF HEARING 28/12/2015 12 / / DATE OF PRONOUNCEMENT 22/01/2016 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-II, RAJKOT [CIT(A) IN SHORT] ITA NO.200 /RJT /2014 M/S. WELSPUN CORP.LTD. VS. ITO ASST.YEAR 2007-08 - 2 - DATED 16/01/2014 PERTAINING TO ASSESSMENT YEAR (AY) 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEA L:- (WITHOUT PREJUDICE TO EACH OTHER) 1. THE LD.CIT(A) HAS ERRED CONFIRMING THE ORDER OF TH E AO U/S.201(1)/201(1A) R.W.S.194C, 194-I AND 194-J WHIC H IS BAD IN LAW AND NEEDS TO BE QUASHED. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE ACTION OF THE AO IN APPLYING THE PRO VISIONS OF SECTION 194C TO PAYMENTS MADE FOR HOTEL CHARGES WHEN SUCH P AYMENTS DO NOT CONSTITUTE WORKS CONTRACT. 3. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONF IRMING THE ACTION OF THE AO OF APPLYING THE PROVISIONS OF SECT ION 194-I INSTEAD OF SECTION 194C AS APPLIED BY THE APPELLANT TO PAYM ENTS FOR PLYING OF EMPLOYEES FROM ONE PLACE TO ANOTHER. 4. THE LD.CIT(A) HAS ERRED IN IGNORING THE DECISIONS O F JURISDICTIONAL HIGH COURT WHEREIN IT WAS HELD THAT PAYMENTS FOR PL YING OF EMPLOYEES FROM ONE PLACE TO ANOTHER ARE COVERED U/S .194C AND NOT U/S.194-I. 5. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE ACTION OF THE AO IN CHARGING INTERES T U/S.201(1A). 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND /OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2. GROUND NOS.1 & 6 ARE GENERAL IN NATURE WHICH R EQUIRE NO INDEPENDENT ADJUDICATION. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT A SURV EY ACTION WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 09. 11.2006, WHEREIN THE ASSESSING OFFICER (AO IN SHORT) OBSERVED THAT THE ASSESSEE HAD APPARENTLY NOT DEDUCTED/SHORT DEDUCTED TAX AT SOURC E ON VARIOUS ITA NO.200 /RJT /2014 M/S. WELSPUN CORP.LTD. VS. ITO ASST.YEAR 2007-08 - 3 - PAYMENTS. THE AO OBSERVED THAT THE ASSESSEE HAD PA ID HOTEL CHARGES TO M/S.SHARMA RESORTS PRIVATE LIMITED AMOUNTING TO RS. 28,47,243/-. THEREFORE, THE AO WHILE FRAMING THE ORDER U/S.201(1 ) AND 201(1A) R.W.S. 194-C, 194-I AND 194-J OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) DATED 22/03/2011, MADE ADDITION OF RS.63,892/- ON ACCOUNT OF NON-DEDUCTION OF TAX OF HOTEL CHARGES. FURTHER, AO OBSERVED THAT THE ASSESSEE HAD PAID RENT OF DG SET OF RS.10 LACS, RENT OF OTHER MACHINERY/CRANES OF RS.1,85,66,681/- AND BUS HIRE C HARGES OF RS.41,59,303/-, BUT IT HAD DEDUCTED TAX AT SOURCE U /S.194C INSTEAD OF SECTION 194-I OF THE ACT AND ACCORDINGLY THE AO MAD E ADDITION OF RS.8,44,373/- FOR SHORT DEDUCTION OF TAX. THE AO FURTHER OBSERVED THAT DURING THE YEAR, THE ASSESSEE HAD MADE PAYMENT OF R S.1,72,000/- TO HUGHES ESCORT COMMUNICATIONS LTD, BUT IT HAD DEDUCT ED TAX AT SOURCE U/S.194C INSTEAD OF 194-J AND THEREBY THERE WAS A S HORT DEDUCTION OF RS.5,789/- AND THE SAME WAS HELD TO BE RECOVERABLE FROM THE ASSESSEE. FURTHER, THE AO ALSO LEVIED INTEREST ON SHORT DEDUC TION. THE ASSESSEE BEING AGGRIEVED BY THE SAID ORDER, PREFERRED AN APP EAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE PARTLY ALLOWED THE APPEAL; THEREBY THE LD.CIT(A) DELETED T HE DEFAULT IN RESPECT OF PAYMENT TOWARDS INTERNET, HOWEVER OTHER ADDITION S WERE CONFIRMED. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), NOW THE AS SESSEE IS IN FURTHER APPEAL BEFORE US. ITA NO.200 /RJT /2014 M/S. WELSPUN CORP.LTD. VS. ITO ASST.YEAR 2007-08 - 4 - 4. GROUND NO.2 IS AGAINST CONFIRMATION OF ACTION FO R APPLYING THE PROVISIONS OF SECTION 194C TO PAYMENTS MADE FOR HOT EL CHARGES. THE LD.COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN APPLYING THE PROVISIONS OF SE CTION 194C OF THE ACT, AS SUCH THERE WAS NO CONTRACT BETWEEN THE ASSESSEE AND THE HOTEL. HE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAV OUR OF ASSESSEE BY THE JUDGEMENT OF HONBLE HIGH COURT OF BOMBAY RENDERED IN THE CASE OF EAST INDIA HOTELS LTD. AND ANOTHER VS. CENTRAL BOAR D OF DIRECT TAXES AND ANOTHER REPORTED AT (2010) 320 ITR 526 (BOM). HE S UBMITTED IN THE LIGHT OF THE JUDGEMENT OF HONBLE HIGH COURT OF BOM BAY IN THE CASE OF EAST INDIA HOTELS LTD. AND ANOTHER(SUPRA), THE ADDI TION DESERVES TO BE DELETED. 4.1. ON THE CONTRARY, THE LD.DR SUPPORTED THE ORDER S OF AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE JUDGEMENT RELIED UPON BY THE LD.COUN SEL FOR THE ASSESSEE. WE FIND THAT THE LD.CIT(A) HAS DECIDED THE ISSUE B Y OBSERVING AS UNDER:- I HAVE CAREFULLY CONSIDERED THE CONTENTION OF THE APPELLANT AND THE ORDER PASSED BY THE A.O. THE FACTUAL MATRIX TH AT EMERGES IS THE APPELLANT HAD NEGOTIATED CERTAIN RATES WITH THE HOTEL FOR ITS GUESTS. THESE RATES WERE APPLICABLE TO ALL ITS GUE STS UNTIL FURTHER NEGOTIATION. IT IS TRUE THAT THERE WAS NO STIPULAT ION FOR THE MINIMUM NUMBER OF GUESTS PER MONTH OR ANY GUARANTEE AS SUCH. HOWEVER, IT IS OBVIOUS THAT THE COMPANY MUST HAVE B EEN VISITED BY ITA NO.200 /RJT /2014 M/S. WELSPUN CORP.LTD. VS. ITO ASST.YEAR 2007-08 - 5 - A FAIR NUMBER OF GUESTS DURING THE YEAR. THE NEGOT IATION OF RATES AND FIXING OF THE SAME, IN MY CONSIDERED OPINION, A MOUNTS TO AN UNWRITTEN CONTRACT BETWEEN THE APPELLANT AND THE HO TEL. THE A.O. WAS THEREFORE CORRECT IN HOLDING THAT THE APPELLANT SHOULD HAVE DEDUCTED TAX U/S.194C. THE ACTION OF THE A.O. IS C ONFIRMED. HOWEVER, THE APPELLANT HAS NOW CONTENDED THAT THE H OTEL HAS FILED ITS RETURN OF INCOME AND PAID THE TAXES ON THE SAME . THE A.O. IS DIRECTED TO VERIFY THE SAME AND IF THE APPELLANTS CONTENTION IS FOUND CORRECT, THE DEMAND MAY BE REDUCED ACCORDINGL Y IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT IN CAS E OF HINDUSTAN COCA COLA BEVERAGES P.LTD. (SUPRA). 5.1 THE LD.COUNSEL FOR THE ASSESSEE HAS RELIED UPON THE JUDGEMENT OF HONBLE HIGH COURT OF BOMBAY RENDERED IN THE CASE O F EAST INDIA HOTELS LTD. AND ANOTHER VS. CENTRAL BOARD OF DIRECT TAXES AND ANOTHER REPORTED AT (2010) 320 ITR 526 (BOM), WHEREIN THE HONBLE HI GH COURT HAS HELD AS UNDER:- 20. IT IS TRUE THAT THE WORD WORK IN S. 194C IS NOT RESTRICTED TO WORKS CONTRACT ONLY AS HELD BY THE APEX COURT IN THE CAS E OF ASSOCIATED CEMENT CO. LTD. (SUPRA). HOWEVER, AS HELD BY THE AP EX COURT IN THE CASE OF BIRLA CEMENT WORKS (SUPRA) THE WORD WORK IN S. 194C HAS TO BE UNDERSTOOD IN A LIMITED SENSE AND WOULD EXTEND O NLY TO THE SERVICE CONTRACTS SPECIFICALLY INCLUDED IN THE SAID SECTION BY WAY OF EXPLN. III. THEREFORE, THE ARGUMENT OF THE REVENUE THAT THE SER VICE CONTRACT BETWEEN THE PETITIONER NO. 1 HOTEL AND ITS CUSTOMER S IS COVERED UNDER S. 194C OF THE ACT CANNOT BE ACCEPTED BECAUSE, NEITHER SUCH A CONTRACT CONSTITUTES WORK WITHIN THE MEANING OF S. 194C OF THE ACT NOR THOSE CONTRACTS ARE COVERED UNDER SERVICE CONTRACTS SPECI FICALLY INCLUDED BY WAY OF EXPLN. III TO S. 194C OF THE ACT. 21. IF THE CONTENTION OF THE REVENUE THAT THE WORDS A NY WORK IN S. 194C IS VERY WIDE ENOUGH TO INCLUDE ALL TYPES OF WO RK IS ACCEPTED, THEN ITA NO.200 /RJT /2014 M/S. WELSPUN CORP.LTD. VS. ITO ASST.YEAR 2007-08 - 6 - IT WOULD MEAN THAT EVEN THE HAIR-CUTTING WORK DONE BY A BARBER WOULD BE A WORK COVERED UNDER S. 194C AND THE PERSON MA KING PAYMENT TO THE BARBER WOULD BE COVERED UNDER S. 194C. SUCH A W IDE INTERPRETATION IS UNCALLED FOR, ESPECIALLY WHEN THE REVENUE ITSELF HAD CONSIDERED SINCE INCEPTION THAT S. 194C IS RESTRICTED TO THE WORKS D ONE BY CONTRACTORS/SUB-CONTRACTORS. APART FROM THE ABOVE, THE CBDT BY ITS CIRCULAR NO. 715, DT. 8TH AUG., 1995 [(1995) 127 CT R (ST) 13] HAS CLARIFIED THAT THE PAYMENTS MADE BY PERSONS OTHER T HAN INDIVIDUALS AND HUFS FOR HOTEL ACCOMMODATION TAKEN ON REGULAR BASIS WILL BE IN THE NATURE OF RENT SUBJECT TO TDS UNDER S. 194-I OF T HE ACT. THUS, THERE IS INCONSISTENCY IN THE STAND OF THE CBDT AS TO WHETHE R THE SERVICES RENDERED BY A HOTEL TO ITS CUSTOMERS IS COVERED UND ER S. 194C OR UNDER S. 194-I OF THE ACT. 22. IN THE PRESENT CASE, WE ARE CONCERNED WITH THE QUE STION AS TO WHETHER THE SERVICES RENDERED BY THE PETITIONER HOT EL TO ITS CUSTOMERS IS COVERED UNDER S. 194C OF THE ACT ? 23. AS NOTICED ABOVE, THE FACILITIES/AMENITIES MADE AV AILABLE BY THE PETITIONER NO. 1 HOTEL TO ITS CUSTOMERS DO NOT CONS TITUTE WORK WITHIN THE MEANING OF S. 194C OF THE ACT. CONSEQUENTLY, TH E CIRCULAR NO. 681, DT. 8TH MARCH, 1994 TO THE EXTENT IT HOLDS THAT THE SERVICES MADE AVAILABLE BY A HOTEL TO ITS CUSTOMERS ARE COVERED U NDER S. 194C OF THE ACT MUST BE HELD TO BE BAD IN LAW. 5.2. THEREFORE, RESPECTFULLY FOLLOWING THE JUDGEMEN T OF HONBLE HIGH COURT OF BOMBAY IN THE CASE OF EAST INDIA HOTELS LT D. AND ANOTHER VS. CENTRAL BOARD OF DIRECT TAXES AND ANOTHER(SUPRA), W E HEREBY DIRECT THE AO TO DELETE THE ADDITION. 6. GROUND NOS.3 & 4 ARE INTER-CONNECTED AND, THEREF ORE, THE SAME ARE DECIDED TOGETHER. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN APPLYING TH E PROVISIONS OF SECTION 194-I INSTEAD OF PROVISIONS OF SECTION 194C OF THE ACT. HE SUBMITTED THAT ITA NO.200 /RJT /2014 M/S. WELSPUN CORP.LTD. VS. ITO ASST.YEAR 2007-08 - 7 - THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSE SSEE BY THE JUDGEMENT OF HONBLE HIGH COURT OF GUJARAT RENDERED IN THE CA SE OF CIT (TDS) VS. SHREE MAHALAXMI TRANSPORT CO. REPORTED AT (2011) 33 9 ITR 484 (GUJ.). 6.1. ON THE CONTRARY, LD.DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE JUDGEMENT RELIED UPON BY THE LD.COUN SEL FOR THE ASSESSEE. WE FIND THAT THE LD.CIT(A) HAS DECIDED THE ISSUE BY OBSERVING AS UNDER:- I HAVE CAREFULLY CONSIDERED THE CONTENTION OF THE APPELLANT AND THE ORDER PASSED BY THE A.O. I HAVE ALSO PERUSED THE C OPY OF THE CONTRACT BETWEEN THE APPELLANT AND THE TRAVEL COMPANY. THE QUESTION WHICH IS REQUIRED TO BE DECIDED IS WHETHER THE ACTIVITY WAS FOR FERRYING PASSENGERS / WORKERS OF THE COMPANY OR THE VEHICLES WERE TAKEN ON HIRE. IF IT WAS A PURE ACTIVITY OF FERRYING PASSENGERS, I T WOULD AMOUNT TO A CONTRACT AND TAX WOULD HAVE TO BE DEDUCTED U/S.194C . HOWEVER, IF THE VEHICLES HAVE BEEN TAKEN ON RENT, IT WOULD AMOUNT T O HIRING OF VEHICLES AND THUS TAX WOULD HAVE TO BE DEDUCTED U/S. 1941, T HE PAYMENT BEING IN THE NATURE OF RENT. IN THE PRESENT CASE, THE ARRAN GEMENT BETWEEN THE APPELLANT AND THE TRAVEL COPANY WAS FOR HIRING OF B USES FOR PICKING UP AND DROPPING OF ITS EMPLOYEES. THE PAYMENT WAS TO BE MADE ON A FIXED MONTHLY BASIS IRRESPECTIVE OF NUMBER OF TRIPS OR PA SSENGERS. THE TIMING WAS UTTERLY AT THE APPELLANT'S DISCRETION. IN OTHER WORDS, THE BUSES WERE TAKEN ON HIRE. THE PAYMENT FOR THE SAME THUS DEFINI TELY AMOUNTS TO RENT AS DEFINED IN S.194-I. A SIMILAR ISSUE HAS BEEN DEC IDED BY THE HON'BLE ITAT, RAJKOT BENCH IN THE CASE OF IN THE CASE OF MA N INDUSTRIES LTD., VIDE ITA NO.363/RJT/2009 DT. 28/8/2009 WHEREIN IT H AS BEEN HELD AS UNDER:- ITA NO.200 /RJT /2014 M/S. WELSPUN CORP.LTD. VS. ITO ASST.YEAR 2007-08 - 8 - '....AFTER PLAIN READING OF THE PROVISIONS OF SECTI ON 1941, THE RENT WHICH IS INCLUDED IN PAYMENT FOR USE OF MACHINERY, PLANT, EQUIPMENT AND LAND AND FITTINGS AND RENT FOR HIRE O F ANY VEHICLE IS FORMING PART OF PLANT AND MACHINERY FOR THE PERI OD IN USE. IN THE PRESENT CASE, THE FITTINGS, THE VEHICLES WERE O WNED AND OPERATED BY THE CONTRACTORS WHICH WERE ENGAGED FOR CARRYING EMPLOYEES FROM ONE DESTINATION TO ANOTHER DESTINATI ON. IN OUR OPINION, THE SERVICES RECEIVED BY THE ASSESSEE FALL S WITHIN THE SCOPE OF SECTION 1941 AND NOT UNDER SECTION 194C' THE HON'BLE ITAT FURTHER HELD THAT:- 'WE FIND THAT SECTION I94C WAS APPLICABLE TILL ASSE SSMENT YEAR WITH EFFECT FROM 13.07.2006 AND BY AMENDMENT NEW SE CTION HAS COME INTO EFFECT AND SECTION I94C HAS BEEN CLARIFIE D BY FINANCE ACT, 2007. WE FIND THAT AS PER SECTION I94C, ANY PE RSON WHO IS PAYING ANY SUM TO ANY RECIPIENT FOR CARRYING OUT AN Y WORK IN PURSUANCE OF THE CONTRACT BETWEEN THE CONTRACTOR AN D ANY GOVERNMENT EMPLOYER HE IS LIABLE TO DEDUCT TAX AT S OURCE BUT THERE WAS EXPLANATION TO IT AND THEREAFTER SECTION 1941 HAS BEEN APPLIED. WE FIND THAT THE HON. SC IN THE CASE OF BI RLA CEMENT WORKS V/S. CBDT (248 ITR 216) HAS DISPROVED THE DEC ISION IN THE CASE OF CBDT V/S. COCHIN GOODS TRANSPORT ASSOCI ATION (1999) 236 ITR 993 (KER.). WE FIND FROM THE ABOVE P ROVISIONS OF LAW AND INTERPRETATION OF SUPREME COURT AND THEREAF TER THE AMENDMENT IN SECTION 1941, THE ASSESSEE PAID RENT F OR HIRING OUT ANY MACHINERY, THEN HE HAS TO DEDUCT TAX AT SOURCE AS PER THE PROVISIONS SECTION 1941..... ....THE AGREEMENT IS BETWEEN THE ASSESSEE COMPANY AND THE TRANSPORT CONTRACTOR OWNER IS ONLY FOR PROVIDIN G BUS SERVICES TO EMPLOYEES OF THE ASSESSEE COMPANY FOR PLYING EMP LOYEES FROM DIFFERENT PLACES TO FACTORY AND BACK WHICH IS GIVEN ON RENT PAID BY THE ASSESSEE........ .....SIMILARLY THEY HAVE HIRED BUSES FOR EMPLOYEES AND FOR BUSES THEY HAVE PAID ON MONTHLY BASIS AND BUSES HAVE BEEN TAKEN ON ITA NO.200 /RJT /2014 M/S. WELSPUN CORP.LTD. VS. ITO ASST.YEAR 2007-08 - 9 - MONTHLY BASIS IRRESPECTIVE OF QUANTUM OF PASSENGERS TAKEN AND THE BUSES CAN BE USED IN ABSOLUTE DISCRETION OF TRI PS OF THE ASSESSEE COMPANY. THEREFORE, WE ARE OF THE VIEW THA T SECTION 1941 IS APPLICABLE TO THE FACTS OF THE PRESENT CASE .... ' RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE 1TAT, RAJKOT BENCH, IT IS HELD THAT THE APPELLANT SHOULD HAVE DEDUCTED TAX U/S. 1941 AND NOT U/S.194C. THE SHORTFALL COMPUTED U/S.201(1) AND THE INTEREST COMPUTED THEREON U/S.201(1A) IS HEREBY CONFIRMED. 7.1. THE ABOVE FINDING OF THE LD.CIT(A) CANNOT BE A FFIRMED IN VIEW OF THE BINDING PRECEDENT OF HONBLE JURISDICTIONAL HIG H COURT RENDERED IN THE CASE OF CIT (TDS), VS. SHREE MAHALAXMI TRANSPOR T CO., WHEREIN THE HONBLE COURT HAS HELD AS UNDER:- 8. THUS, S. 194C OF THE ACT MAKES PROVISION FOR DEDUC TION OF TAX AT SOURCE IN RESPECT OF PAYMENTS MADE TO CONTRACTORS W HEREAS S. 194-I MAKES PROVISION FOR DEDUCTION OF TAX AT SOURCE IN R ESPECT OF INCOME BY WAY OF RENT. 9. EXAMINING THE FACTS OF THE PRESENT CASE IN THE LIG HT OF THE AFORESAID STATUTORY PROVISIONS, FROM THE FINDINGS OF FACT REC ORDED BY THE CIT(A) IT IS APPARENT THAT THE ASSESSEE HAS NOT TAKEN THE DUM PERS ON HIRE/RENT FROM THE PARTIES IN QUESTION. THE ASSESSEE HAS GIVE N CONTRACTS TO THE SAID PARTIES FOR THE TRANSPORTATION OF GOODS AND HA S NOT TAKEN MACHINERIES AND EQUIPMENT ON RENT. IN THE CIRCUMSTA NCES, THE CIT(A) WAS JUSTIFIED IN HOLDING THAT THE TRANSACTIONS IN Q UESTION BEING IN THE NATURE OF CONTRACTS FOR SHIFTING OF GOODS FROM ONE PLACE TO ANOTHER WOULD BE COVERED AS WORKS CONTRACTS, THEREBY ATTRAC TING THE PROVISIONS OF S. 194C OF THE ACT. THAT SINCE THE ASSESSEE HAD GIVEN SUB-CONTRACTS FOR TRANSPORTATION OF GOODS AND NOT FOR THE RENTING OUT OF MACHINERIES OR EQUIPMENTS, SUCH PAYMENTS COULD NOT BE TERMED AS RE NT PAID FOR THE USE OF MACHINERY AND THE PROVISIONS OF S. 194-I OF THE ACT WOULD NOT BE APPLICABLE. THE TRIBUNAL WAS, THEREFORE, JUSTIFIED IN UPHOLDING THE ORDER PASSED BY THE CIT(A). ITA NO.200 /RJT /2014 M/S. WELSPUN CORP.LTD. VS. ITO ASST.YEAR 2007-08 - 10 - 10. IN VIEW OF THE ABOVE DISCUSSION, IT IS NOT POSSIBL E TO STATE THAT THE TRIBUNAL HAS COMMITTED ANY LEGAL ERROR SO AS TO WAR RANT INTERFERENCE. NO QUESTION OF LAW, MUCH LESS, A SUBSTANTIAL QUESTI ON OF LAW CAN BE STATED TO ARISE OUT OF THE IMPUGNED ORDER OF THE TR IBUNAL. THE APPEAL IS, ACCORDINGLY, DISMISSED. 7.2. IN THE INSTANT CASE FROM THE FACTS IT CANNOT B E INFERRED THAT THE ASSESSEE HAS TAKEN BUSES ON RENT. MERELY BECAUSE T HE BUSES REMAIN PARKED IN THE PREMISES OF THE ASSESSEE WOULD NOT TA NTAMOUNT TO BUSES WERE TAKEN ON RENT. THE AO HAS NOT BROUGHT ON RECO RD ANY MATERIAL ON RECORD SUGGESTING THAT EVEN OFF-WORKING HOURS ALSO BUSES REMAINED WITH ASSESSEE-COMPANY. IT IS ALSO NOT BOUGHT ON RECORD THAT THE PAYMENTS WERE BEING MADE ON THE BASIS OF DAYS WITHOUT ANY RE STRICTION OF MAXIMUM KILOMETER. HENCE, WE HEREBY DIRECT THE A O TO DELETE THE ADDITION. 8. GROUND NO.5 IS CONSEQUENTIAL IN NATURE AND HELD ACCORDINGLY. 9. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 22 ND DAY OF JANUARY, 2016 AT AHMEDABAD. SD/- SD/- ( ) ( ) ! ! ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 22/ 01 /2016 . .,.. ./ T.C. NAIR, SR. PS ITA NO.200 /RJT /2014 M/S. WELSPUN CORP.LTD. VS. ITO ASST.YEAR 2007-08 - 11 - / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. 6 7 / CONCERNED CIT 4. 7 ( ) / THE CIT(A)-II, RAJKOT 5. 9:, , , /DR,ITAT,RAJKOT 6. :EFG0 / GUARD FILE. / BY ORDER, -9, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) & ' , / ITAT, RAJKOT 1. DATE OF DICTATION ..1.1.16 (DICTATION-PAD 4-- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 5.1.2016 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 22.1.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 22.1.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER