The ITO,(TDS), Valsad V. Hindalco Industries Ltd., SILVASSA

ITA 3039/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94212 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 31-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 05-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADIPKUMAR MAJUMDAR
• Assessee Lawyers: ARTI DEBNATH
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: S H RI ANIL CHATURVEDI , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER INCOME - TAX OFFICER, VALSAD (APPELLANT) VS HINDALCO INDUSTRIES LIMITED, VILLAGE KHUTLI, KHANVEL, SILVASSA - 396230 PAN: AAACH1201R (RESPONDENT) REVENUE BY : S H RI PRADIPKUMAR MAJUMDAR , SR. D . R. ASSESSEE BY: MS. ARTI DEBNATH , A.R. DATE OF HEARING : 31 - 07 - 2 015 DATE OF PRONOUNCEMENT : 07 - 08 - 2 015 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THESE R EVENUE S APPEALS FOR A.Y. 2009 - 10 & 2010 - 11, ARISE FROM ORDER OF THE CIT(A), VALSAD DATED 26 - 08 - 2011 IN APPEAL NO. CIT(A)/VLS/218/10 - 11, IN PROCEEDINGS UNDER SECTION 201(1)/201(1A) R.W.S. 194I OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE S IDENTICAL GROUND RAISED IN BOTH APPEALS CHALLENGES THE CIT(A) S O RDERS DELETING DEMANDS OF RS. 5,0 5,413/ - AND RS. 64,294/ - IN I T A NO . 3039 & 3 0 40 / A HD/20 11 A SSESSMENT YEAR 200 9 - 10 & 2010 - 11 I.T.A NO. 3039 - 3040 /AHD/20 11 A.Y. 2009 - 10 & 2010 - 11 PAGE NO ITO VS. HINDALCO INDUSTRIES LTD 2 THE FORMER APPEAL AND RS. 2,60,920/ - AND RS. 16,906/ - IN THE LATTER ONE, MADE U/S/. 201(1) R.W.S. 201(1A); RE SPE CTIVELY. THE PARTIES SAID THAT BOTH CASES INVOLVE SIMILAR FACTS. WE ACCORDINGLY TAKE I TA NO. 3039/AHD/11 AS THE LEAD CASE. 3. THE ASSESSEE S COMPANY MANUFACTURES ALUMINUM FOILS AN D WHEELS AT SILVASA (UT). THE D EPARTMENT CONDUCTED A SURVEY ON 24 - 09 - 200 9 IN ITS CASE. THE ASSESSEE HAD BEEN HIRING FORK LIFT AND HYDR A MACHINES. IT WOULD DEDUCT TDS U/S. 194C QUA THE PAYMENTS MADE IN LIEU OF THIS HIRING BY TREATING THE SAME AS WORK INSTEAD OF HIRING OF A MACHINE U/S. 194I OF THE ACT. THE AS SESSING OFFI CER IN THE ASSESSMENT ORDER DATED 17 - 11 - 2009 HELD THAT THE ABOVE STATED VEHICLES HIRING FELL WITHIN THE MEANING OF PLANT AND MACHINERY AND PAYMENTS IN QUESTION WERE TO BE TREATED AS RENT PAID TO BE SUBJECTED TO TDS DEDUCTION @ 11.33% U/S. 194I. HE TREATE D THE ASSESSEE TO BE AN ASSESSEE IN DEFAULT FOR RS. 5,69,705/ - AND RS. 64,292/ - U/S 201(1) AND 201(1A); RESPECTIVELY. 4. THE ASSESSEE PREFERRED AN APPEAL. THE CIT(A) HAS ACCEPTED ITS CONTENTIONS AS UNDER; - 5.3 I HAVE CONSIDERED THE OBSERVATION A.O. IN THE ORDER PASSED U/S. 201 (1) /201(1A) OF THE I.T. ACT AND THE CONTENTIONS RAISED BY THE A.R. OF THE APPELLANT IN THE WRITTEN SUBMISSION. THE CONTENTIONS RAISED BY THE A.R. OF THE APPELLANT SEEMS TO BE JUSTIFIED PARTICULARLY IN TERMS OF APPLICABILITY OF THE PROVISIONS OF SECTION 194C OF THE ACT. THE A.R. OF THE APPELLANT HAS RIGHTLY RAISED THE ISSUE THAT THE APPELLANT HAS HIRED VEHICLES AS WELL AS FORKLIFT MACHINERIES PROVIDED ALONG WITH MANPOWER WITH THE OBJECT OF CARRYING OUT SPECIFIC JOB. THE EFFECTIVE CONTROL OF VEHICLES AND EQUIPMENT REMAINS WITH THE SERVICE PROVIDERS AND THEY ARE THE ONE WHO ARE RESPONSIBLE FOR MAINTENANCE OF THEIR EQUIPMENT S . THUS, IT BECOMES AS CASE OF SERVICE CONTRACT AND NOT A CONTRACT OF HIRING OF VEHICLES AND EQUIPMENTS . THERE FORE, THE OBSERVATION OF THE A.O. AND APPLICATION I.T.A NO. 3039 - 3040 /AHD/20 11 A.Y. 2009 - 10 & 2010 - 11 PAGE NO ITO VS. HINDALCO INDUSTRIES LTD 3 OF SECTION 194I OF THE ACT WOULD NOT STAND IN THE EYES OF LAW. THEREFORE, THE SECTION INVOKED BY THE A.O. FOR LEVY OF TAX AND INTEREST IS DEFEATED. THUS, THE APPELLANT SUCCEEDS IN THIS GROUND OF APPEAL. 5. HEARD BOTH SIDES. RECORDS PERUSED. THE RELEVANT FACTS OF THE CASE STAND NARRATED HEREINABOVE. THE CIT(A) RECORDS A FINDING OF FACT THAT THE ASSESSEE HAD HIRED THE VEHICLE IN QUESTION WITH SKILLED MANPOWER PROVIDED BY THE PAYEE S FOR CARRYING OUT SPE CIFIC WORKS COVERED U/S . 194C FOR TDS DEDUCTION PURPOSES AND DID NOT PAY ANY RENT FOR DEDUCTING TDS U/S 194I. THE REVENUE DOES NOT CONTROVERT THIS CRUCIAL FINDING. THE HON BLE JURISDICTIONAL HIGH COURT IN CIT VS. RELIANCE ENGINEERING ASSOCIATES (2012) 20 9 TAXMAN 0351 DEALS WITH A CASE WHEREIN THE CONCERNED ASSESSEE HAD NOT TAKEN POSSESSION OF THE HIRED VEHICLES IN QUESTION AND THE RESPONSIBILITY OF OPERATION /MAINTENANCE RESTED WITH I TS PAYEES. THEIR LORDSHIP HOLD THAT SUCH A PAYMENT AMOUNTS TO THAT FOR C ARRYING OUT WORK ONLY U/S 194C AND NOT RENT COVERED U/S. 194I OF THE ACT. THE REVENUE FAIL TO DRAW ANY DISTINCTION ON FACTS OR LAW. WE DRAW SUPPORT THEREFROM AND HOLD THAT THE ASSESSEE HAD PAID FOR WORKS ONLY TO BE PERFORMED BY THE HIRED VEHICLES AND NOT TAKEN ON RENT, THE FORK LIFTS AND HYDRA MACHINES. THE CIT(A) S FINDINGS UNDER CHALLENGE ARE CO NFIRMED. REVENUE S APPEAL ITA NO. 3039/AHD/2011 IS DISMISSED. 6. SAME ORDER TO FOLLOW IN ITA NO. 3040/AHD/2011 . REVENUE S BOTH APPEAL S ITA NO. 3039/AHD/2011 AND ITA NO. 3040/AHD/2011 ARE DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 07 - 08 - 2015 SD/ - SD/ - ( ANIL CHATURVEDI ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 0 7 /08 /20 15 I.T.A NO. 3039 - 3040 /AHD/20 11 A.Y. 2009 - 10 & 2010 - 11 PAGE NO ITO VS. HINDALCO INDUSTRIES LTD 4 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,