The ITO,(TDS), Gandhinagar V. Gujarat Maritime Board, Gandhinagar

ITA 3302/AHD/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80371 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 17-09-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 13-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: S N SOPARKAR WITH H P SINGH
• Keywords: Recovery proceedings
• Section: 194C; 201(1); 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL CHATURVEDI , A.M.) I. T. A. NO S . 3301 & 3302 / AHD/ 20 1 0 (A SSESSMENT YEAR: 2008 - 09 & 2009 - 10) INCOME - TAX OFFICER, (TDS) GANDHINAGAR V/S GUJARAT MARITIME BOARD, SECTION - 10A, CHH ROAD, OPP. AIR FORCE,GANDHINAGAR (APPELLANT ) (RESPONDENT) PAN: AABCB6676L APPELLANT BY : SHRI M. K. SINGH, SR. D.R. RESPONDENT BY : SHRI S.N. SOPARKAR WITH H.P. SINGH (ADVOCATE) ( )/ ORDER DATE OF HEARING : 17 - 09 - 2014 DATE OF PRONOUNCEMENT : - 09 - 2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THESE 2 APPEAL S ARE FILED BY THE REVE NUE ARE AGAINST THE ORDER OF CIT(A) - XXI, AHMEDABAD DATED 08.09.2010 FOR A.Y. 2008 - 09 & 2009 - 10 RESPECTIVELY . 2. BEF ORE US, BOTH THE PARTIES SUBMITTED THAT THOUGH THE APPEALS RELATE TO TWO DIFFERENT ASSESSMENT YEARS BUT THE FACTS AND CIRCUMSTANCES OF BOTH THE CASES ARE SIMILAR AND THE SUBMISSIONS ARE ALSO COMMON FOR BOTH THE APPEALS AND THEREFORE BOTH THE APPEALS CAN BE HEARD TOGETHER. WE THERE F ORE PROCEED TO DISPOSE OF BOTH THE APPEALS TOGETHER FOR THE SAKE OF CONVENIENCE. WE THUS PROCEED WITH THE FACTS FOR A.Y. 2009 - 10 IN ITA NO. 3302/AHD/2010. 3. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. ITA NO S. 3301 & 3302/AHD/2010 . A.Y S . 2008 - 09 & 2009 - 10 2 4. ASSESS EE IS AN ENTITY STATUTORILY BROUGHT INTO EXISTENCE AS LOCAL AUTHORITY UNDER THE GUJARAT MARITIME BOARD ACT 1981. A SURVEY U/S 133A(1) WAS CARRIED OUT AT THE OFFICE PREMISES ON 8 & 9 TH SEPTEMBER 2008 . D URING THE COURSE OF SURVEY, IT WAS NOTICED THAT ASSESS EE HAS NOT DEDUCTED TDS AT THE TIME OF PAYMENT TO CERTAIN CONTRACTORS AS PER THE RATE PRESCRIBED IN ACCORDANCE WITH PROVISIONS OF CHAPTER XVIII OF THE ACT. THEREAFTER AFTER ISSUANCE OF SHOW CAUSE NOTICE AND AFTER RECEIPT OF ASSESSEE S REPLY , ORDER U/S 201 (1) AND 201(1A) R.W.S 194I OF THE ACT WAS PASSED ON 30.11.2009 AND THE TOTAL DEMAND ON ACCOUNT OF SHORT DEDUCTION OF TAX AND INTEREST WAS DETERMINED AT RS. 30,30,382 / - . AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) VIDE ORDER DATED 8.9.2010 ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS: - 1. THE LD.CIT(A) ERRED IN LAW AS WELL AS ON FACTS OF THE CASE IN DELETING THE ORDER PASSED U/S. 201 (1) OF RS.28,00,393 / - & INTEREST CHARGED U/S. 201 (1A) OF THE I T ACT OF RS. 2,29,989/ - RESPECTIVELY FOR A.Y. 2009 - 10 BY THE A.O. 2. THE LD.CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT AFTER 13.7.2006 THE PROVISION OF 194 I IS APPLICABLE ON HIRING CHARGES OF BOAT PAID TO SHM SHIP CARE, MUMBAI WHICH COVER USES OF PLANT AND MACHINERY AND NOT THE PROVISION OF 194C OF I.T. ACT. 3. THE LD.CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT AFTER 13.7.2006 THE PROVISION OF 1941 IS APPLICABLE ON HIRING CHARGES OF SCROLLE R PUT UP AT THE INTERNATIONAL AS WELL AS DOMESTIC AIRPORT PAID TO M/S P&B MEDIA CONSULTANT WHICH COVER USES OF PLANT AND MACHINERY AND NOT THE PROVISION OF 194C OF I.T. ACT. GRO UND NO. 1 IS GENERAL AND NOT ADJUDIC ATED AND THEREFORE DISMISSED. GROUND N O. 2 IS WITH RESPECT TO HIRE CHARGES OF BOAT PAID TO SHM SHIP C ARE MUMBAI. 5. A.O NOTICED THAT ASSESSEE HAD TAKEN ON HIRE 3 BOATS FOR PATROLLING AT DIFFERENT GMB PORTS FOR A PERIOD OF 3 YEARS AT THE RATE OF 8,01,900/ - PER BOA T/ PER MONTH. A.O NOTICED THAT A SSESSEE HAD MADE PAYMENT OF RS. 3,33,31,717/ - AND HAD DEDUCTED THE TAX AT 2% U/S 194C OF THE ACT. A.O WAS OF THE VIEW THAT ASSESSEE SHOULD HAVE DEDUCTED TDS U/S 194I AT 10% BECAUSE ACCORDING TO A.O THE HIRE CHARGES PAID FOR BOATS WAS IN THE NATURE OF RENT AND HENCE ATTRACTED THE PROVISIONS OF SECTION 194I OF THE ACT. HE WAS THEREFORE OF THE VIEW THAT THERE WAS SHORT DEDUCTION OF TAX BY THE ASSESSEE AND THEREFORE THE ASSESSEE WAS LIABLE FOR ITA NO S. 3301 & 3302/AHD/2010 . A.Y S . 2008 - 09 & 2009 - 10 3 INTEREST U/S 201 & 201(1A) . HE ACCORDINGLY WORKED OUT THE TOTAL TAX PAYABLE AT RS. 29,52,924/ - . AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A), CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION BY HOLDING AS UNDER: - 10. THE MATTER HAS BEEN CONSIDERED CAREFULLY AND EACH OF THE PAYMENT IS BEING DISCUSSED SEPARATELY. IN CASE OF M/S. SHM SHIP CARE, IT IS AN ADMITTED POSITION BY THE APPELLANT THAT THE CONTRACTOR INVOLVES HIRING OF THE BOATS. THE AUTHORIZED REPRESENTATIVE'S ARGUMENTS BOTH BEFORE THE ASSESSING OFFICER AS WELL A S BEFORE THE UNDERSIGNED THAT IT IS A COMPREHENSIVE CONTRACT INVOLVING A NUMBER OF ACTIVITIES AND THEREFORE IT PARTAKES THE CHARACTER OF A 'WORK CONTRACT'. IN THIS CONNECTION IT WILL BE WORTHWHILE TO SEE THE SCOPE OF CONTRACT AS PER CHAPTERS V & VI OF THE TENDER DOCUMENTS, THESE ARE AS FOLLOWS: 11. AS WOULD BE SEEN, THE TENDER IS FOR SUPPLY OF BOATS IN RUNNING CONDITION WITH CREW. THESE BOATS ARE AT THE DISPOSAL OF ASSESSEE ALL THE TIME AND IT IS FOR THE ASSESSEE TO UTILIZE THEM IN THE MANNER IT DEEMS APPROPRIATE. THE SCOPE OF WORK NOWHERE TALKS OF ANY JOB OR WORK TO BE COMPLETED. IN OTHER WORDS, IT IS NOT ONLY A CONTRACT FOR JOB BUT ALSO A CONTRACT FOR EQUIPMENTS. EVEN THE FINAL CONTRACT DATED 30/06/2007, WHICH HAS BEEN STYLED AS WORK ORDER, READS AS FOLLOWS: . 12. HENCE, IT IS COMPREHENSIVE ORDER FOR INTER ALIA HIRING OF BOATS TO BE PAID ON MONTHLY RENTAL BASIS. IT IS ALSO A CONTRACT OF PATROLLING. IT IS AN ACCEPTED POSITION IN INCOME - TAX PROCEEDINGS THAT NOMENCLATURE USED BY THE PARTIES OF A TRANSACTION DOES NOT DETERMINE THE NATURE OF TRANSACTION. IT WOULD BE A COMMONSENSE DERIVATION THAT PATROLLING WILL BE DONE BY EXPERT SECURITY PERSONNEL ON THESE BOATS AND NOT BY THE PERSONS PROPELLING THESE BOATS. HE NCE, IN MY VIEW, THE ACTION OF THE ASSESSING OFFICER IN TREATING THIS CONTRACT AS COVERABLE BY SECTION194 - I APPEARS TO BE QUITE UNJUSTIFIED AND NOT CONCURRING WITH THE VIEW TAKEN, I REJECT AO'S STANCE. 6. AGGRIEVED BY THE ORDER OF LD CIT(A) , REVENUE IS NOW IN APPEAL BEFORE US. 7. BEFORE US LD D.R. POINTED TO THE FINDINGS OF A.O AND SUBMITTED THAT ASSESSEE SHOULD HAVE DEDUCTED TAX AT 10% U/S 194I AND NOT AT 2% U/S 194C AS THE PAYMENT WAS COVERED U/S 194I AND NOT U/S 194C OF THE ACT. HE FURTHER SUBMITTED THAT CI T(A) HAD NOT ADDRESSED THE ISSUES RAISED BY THE A.O. HE THUS SUPPORTED THE ORDER OF A.O. THE LD A.R. ON THE OTHER HAND REITERATED THE SUBMISSIONS MADE BEFORE CIT(A). HE FURTHER POINTED TO THE SCOPE OF WORK OF THE TENDER AND WHICH WAS PLACED AT PAGE 24 OF T HE PAPER BOOK. HE FURTHER SUBMITTED THAT THE DEFINITION OF THE WORLD PLANT UNDER SUB - SECTION (3) OF SECTION 43 IS FOR THE PURPOSES OF SECTION 28 TO 41 AND IT CANNOT BE USED FOR THE PURPOSE OF SECTIONS IN CHAPTER XVII OF THE ACT. HE FURTHER PLACED RELIANC E ON THE DECISION OF HON BLE ALLAHABAD HIGH COURT IN THE CASE OF ACIT VS. LOTUS VALLEY EDUCATION SOCIETY REPORTED IN 2014 45 TAXMAN.COM 37 (ALLAHABAD). HE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID DECISION. HE FURTHER PLACED RELIANCE ON THE DECISION IN THE CASE OF GUJARAT STATE ITA NO S. 3301 & 3302/AHD/2010 . A.Y S . 2008 - 09 & 2009 - 10 4 PETROLEUM CORPORATION LTD. IN ITA NO. 2884/AHD/2010 ORDER DATED 29.11.2013 WHERE THE ISSUE WAS ABOUT THE HIRING CHARGES PAID FOR HELICOPTERS AND IT WAS HELD THAT TDS IS TO BE DEDUCTED U/S 194C . THE LD A.R. FURTHER SUBMITTED THA T THE PAYEE (SHM SHIP C ARE) HAS ALREADY PAID THE TAXES ON THE AMO UNTS RECEIVED FROM THE ASSESSEEAND IN SUPPORT OF WHICH H E PLACED ON RECORD THE CO PY OF THE INCOME TAX RETURN AT PAGE 27 OF THE PAPER BOOK. HE THEREFORE SUBMITTED THAT ONCE THE PAYEE HAS PAID THE TAX , THE ASSESSEE CANNOT BE CONSIDERED TO BE ASSESSEE IN DEFAULT AND FOR WHICH HE PLACED RELIANCE ON THE DECISION IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE PVT. LTD. VS. CIT (2007) (SC) 293 ITR 226 AND BHARTI AUTO PRODUCTS VS. CIT (2013) 145 ITD 1 ( SB). HE THUS SUPPORTED THE ORDER OF CIT(A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS ABOUT THE RATE OF DEDUCTION OF TDS. IT IS AN UNDISPUTED FACT THAT ASSESSEE HAD TAKEN ON HIRE BOATS AND ON THE PAYMENT OF HIRE CHARGES ASSESSEE HAS DEDUCTED TDS AT 2% U/S 194C WHEREAS IT IS R EVENUE S CONTENTION THAT ASSESSEE SHOULD HAVE DEDUCTED TDS AT 10% U/S 194I OF THE ACT. WE FIND THAT CIT(A) WHILE GRANTING RELIEF TO THE ASSESSEE HAS GIVEN A FINDING T HAT THE CONTRACT ENTERED BY THE ASSESSEE WITH SHM SHIP C ARE FOR HIRING OF BOATS WAS NOT ONLY A CONTRACT FOR JOB BUT ALSO A CONTRACT FOR EQUIPMENTS AND THEREFORE ASSESSEE HAD RIGHTLY DEDUCTED TDS @ 2% . WE FURTHER FIND THAT I N THE CASE OF ACIT VS. LOTUS VALL EY EDUCATION SOCIETY (SUPRA) THE HON BLE ALLAHA BAD HIGH COURT HAS NOTED THAT THE WORD RENT IN THE EXPLANATION TO SECTIO N 194I INCLUDES PLANT BUT TH A T PLANT HAS NOT BEEN DEFINED UNDER DEFINITION CLAUSE OF SECTION 2 OF THE ACT. IT THEREAFTER NOTED AS UNDER : - 9. IN THE PRESENT CASE, THE WORD ' RENT 1 HAS NOT BEEN DEFINED IN SECTION 2 OF THE ACT. THE DEFINITION OF THE' WORD ' PLANT' UNDER SUB SECTION (3) OF SECTION 43, FALLS IN CHAPTER IV - COMPUTATION OF TOTAL INCOME, WHICH IS NEITHER RELATABLE NOR APPLIC ABLE TO THE CHAPTER XVII, RELATING TO COLLECTION AND RECOVERY OF TAX. EVEN OTHERWISE, IT IS DIFFICULT TO BELIEVE THAT THE WORD ' PLANT' DEFINED IN CHAPTER IV - COMPUTATION OF TOTAL INCOME, FALLING UNDER SECTION 43 OF THE ACT, INCLUDES BUSES HIRED BY THE ED UCATIONAL INSTITUTIONS. THE DEFINITION OF PLANT' IN SUB SECTION (3) OF SECTION 43 OF THE ACT CLEARLY STATES THAT' PLANT' INCLUDES SHIPS, VEHICLES, BOOKS, SCIENTIFIC APPARATUS AND SURGICAL EQUIPMENT USED FOR THE PURPOSES OF THE BUSINESS OR PROFESSION. A PLA IN AND GENERAL INTERPRETATION OF PLANT' IN CHAPTER - IV OF SUB SECTION (3) OF SECTION 43 OF THE ACT WOULD SHOW THAT IT HAS INCLUDED THE USE OF SHIPS, VEHICLES, BOOKS, SCIENTIFIC APPARATUS AND SURGICAL EQUIPMENT FOR THE PURPOSES OF SECTION 28 TO 41. WE ARE NO T PERMITTED TO ADD OR SUBTRACT ANYTHING FROM IT, NOR CAN WE READ IT ITA NO S. 3301 & 3302/AHD/2010 . A.Y S . 2008 - 09 & 2009 - 10 5 AS AN INCLUSIVE DEFINITION TO BE USED FOR THE PUR POSE OF SECTIONS IN CHAPTER XVII - COLLECTION & RECOVERY OF TAX AT SOURCE. 9. BEFORE US REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONT ROVERT THE FINDINGS OF CIT(A) NOR HAS BROUGHT ANY CONTRARY BINDING DECISION IN ITS SUPPORT. IN VIEW OF THE AFORESAID FACTS WE FIND NO R E ASON TO INTERFERE WITH THE ORDER OF CIT(A). IN THE RESULT, THIS GROUND OF REVENUE IS DISMISSED. 3 RD GROUND IS WITH RE SPECT TO DEDUCTION OF TDS ON HIRING CHARGES OF SCROLLER AND DISPLAY OF ADVERTISEMENTS. 10. A.O NOTICED THAT ASSESSEE HAD MADE PAYM ENT OF RS. 7,72,250/ - TO M/S. P & B MEDIA CONSULTANT TOWARDS HIRING CHARGES OF SCROLLER FOR ADVERTISING AND DISPLAY AT DOMESTIC AND INT ERNATIONAL AIR PORT AND HAD MADE PAYMENT OF RS. 13,52,270/ - TO CHITRA PUBLICITY CO. TOWARDS HIRING OF 226 HOARDINGS FOR DISPLAY OF ADVERTISEMENT AT VAR IOUS OCCASIONS IN GUJARAT. A.O NOTICED THAT ASSESSEE HAD DEDUCTED TDS AT 2% U/S 194C OF THE ACT. A.O WAS OF THE VIEW THAT THE PAYMENT TO THE AFORESAID PARTIES ATTRACT TDS U/S 194I AND THEREFORE THE TAX WAS REQUIRED TO BE DEDUCTED AT 10%. THUS ACCORDING TO A.O, THERE WAS SHORT DEDUCTION OF TAX AND THEREFORE ASSESSEE WAS LIABLE FOR SIMPLE INTEREST ON TH E TAX AMOUNT FOR THE DELAY AS PER SECTION 201(A) OF THE ACT. HE ACCORDINGLY WORKED OUT THE TOTAL PAYMENT U/S 201(1) & 201(1A) AT RS. 2,20,963/ - . AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER: - 4.AS FAR AS THE PAYMENT TO M/S. P & B MEDIA CONSULTANTS IS CONCERNED, THE SAME HAVE BEEN MADE FOR PUTTING UP SCROLLER AT THE INTERNATIONAL AND DOMESTIC AIRPORTS FOR A PERIOD OF ONE YEAR. THE ASSESSING OFFICER'S ASSERTION IS THAT THE ASSESSEE HAS HIRED THE SCROLLERS AND THEREFORE THE TDS HAS TO BE COVERED BY PROVISIONS OF SECTION 194 - I. ON THE OTHER HAND, THE APPELLANT'S CONTENTION IS THAT IT IS A MERE CASE OF CONTRACT FOR PUBLICITY AND THEREFORE GETS COVERED BY PROVISIONS OF SECTION 194 - C, WHICH HAVE BEEN DULY FOLLOWED BY IT. THE FACTS OF THE CASE ARE EXACTLY SIMILAR AS IN APPEAL NO.CIT(A) - XXI/181/ITO(TDS)(GNR)/10 - 11 DATED 8/9/2010. AFTER CONSIDERING IN DETAILS, THE MATTER HAS BEEN DECIDED IN FAVOUR OF APPELLANT BY THE UND ERSIGNED IN THE ORDER DATED 8/09/2010 AND IT HAS BEEN UPHELD THAT THE TRANSACTION INVOLVED IS IN NATURE OF ADVERTISEMENT AND THEREFORE, THE MATTER IS COVERED BY SECTION 194C. SINCE THERE IS NO DIFFERENCE ON THE FACTS IN THE TWO SITUATIONS, IN THE PRESENT APPEAL ALSO, IT IS HELD THAT THE ASSESSEE HAD CORRECTLY DEDUCTED/PAID IDS IN THIS CONTEXT AS PER THE PROVISION OF SECTION 194C 8. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE AUTHORIZED REPRESENTATIVE HAS GIVEN SUBMISSIONS ON THE SAME LINES AS IN THE CA SE OF M/S, P & B MEDIA CONSULTANTS, I.E. PERTAINING TO GROUND NO. 2. THE GIST OF THE ARGUMENTS IS THAT THE HOARDINGS ARE IN THE NATURE OF AN ADVERTISEMENT CONTRACT AND THERE WAS NO OTHER ITA NO S. 3301 & 3302/AHD/2010 . A.Y S . 2008 - 09 & 2009 - 10 6 ASPECT OF THE CONTRACT. AS PER THE AUTHORIZED REPRESENTATIVE, IN VIEW OF CBDT CIRCULAR NO. 715 DATED 08/08/1995, THE MATTER IS COVERED BY PROVISIONS OF SECTION 194C AND NOT BY SECTION 194 - I. 9. THE MATTER HAS BEEN CONSIDERED AND I THINK, IN MY VIEW, THE SAME CONSIDERATION AS APPLIED IN THE PAYMENT TO M/S. P & B MEDIA CONSUL TANTS WOULD BE APPLICABLE TO M/S. CHITRA PUBLICITY CO. PVT. LTD. ALSO. THE RIGHTS OBTAINED BY THE APPELLANT WHEN THE TRANSACTION WAS ENTERED INTO WITH M/S. CHITRA PUBLICITY CO. PVT. LTD. WAS IN THE FORM OF BOOKING THE SPACE FOR ADVERTISEMENTS. IT WOULD BE INCORRECT TO PRESUME THAT THE RESPONSIBILITY OF UTILIZING THE SPACE WAS ON THE APPELLANT ITSELF AND M/S. CHITRA PUBLICITY CO. PVT. LTD. WAS NOT REQUIRED TO DO ANY FURTHER JOB THAN HANDING OVER THE SPACE TO THE APPELLANT TO UTILIZE THE SPACE AS THE APPELLAN T DESIRES. IN FACT, THE WHOLE TRANSACTION WAS IN THE NATURE OF ADVERTISEMENT AND PUBLICITY. THEREFORE, I THINK THE ASSESSING OFFICER WAS NOT AT ALL CORRECT WHEN HE CAME TO THE CONCLUSION THAT THE TDS SHOULD HAVE BEEN DEDUCTED AS PER THE PROVISIONS OF SECTI ON 194 - I. THE ASSESSING OFFICER'S ACTION IN THIS CONTEXT IS REJECTED AND THE APPELLANT'S STANCE IS CONFIRMED 11. AGGRIEVED BY THE ORDER OF LD CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. 12. BEFORE US, LD D.R. RELIED ON THE ORDER OF A.O ON THE OTHER HAND LD A.R . REITERATED THE SUBMISSIONS MADE BEFORE A.O AND CIT(A) AND FURTHER PLACED RELIANCE ON THE DECISION OF AHMEDABAD TRIBUNAL IN THE CASE OF GUJARAT STATE PETROLEUM CORPORATION (SUPRA). HE THUS SUPPORTED THE ORDER OF CIT(A). 13. WE HAVE HEARD THE RIVAL SUBMISSI ONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE DECIDING THE PAYMENT MADE TO P & B MEDIA CONSULTANT HAS GIVEN A FINDING THAT THE TRANSACTION INVOLVED IS IN THE NATURE OF ADVERTISEMENT AND THEREFORE THE MATTER IS COVERED BY PROVISIONS OF S ECTION 194C. WITH RESPECT TO THE TRANSACTION WITH CHITRA PUBLICITY , CIT(A) HAS GIVEN A FINDING THAT THE TRANSACTION ENTERED WAS IN THE FORM OF BOOKING THE SPACE FOR ADVERTISEMENTS AND THE ENTIRE TRANSACTION WAS IN THE NATURE OF ADVERTISEMENT AND PUBLICITY AND THE ASSESSEE HAD RIGHTLY DEDUCTED TDS U/S 194C OF THE ACT. BEFORE US, REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF CIT(A). IN VIEW OF THE AFORESAID FACTS WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS T HIS GROUND OF REVENUE IS DISMISSED. 14. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ITA NO. 3301/AHD/2010 FOR A.Y. 2008 - 09 ITA NO S. 3301 & 3302/AHD/2010 . A.Y S . 2008 - 09 & 2009 - 10 7 15. THE GROUNDS RAISED READS AS UNDER: - 1.THE LD.CIT(A) ERRED IN LAW AS WELL AS ON FACT S OF THE CASE IN DELETING THE ORDER PASSED U/S.201 (1) OF RS.34,36,476/ - & INTEREST CHARGED U/S. 201 (1A) OF THE I T ACT OF RS.7,41,553/ - RESPECTIVELY FOR A.Y. 2008 - 09 BY THE A.O. 2.THE LD.CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT AFTER 13.7.2006 THE P ROVISION OF 194 I IS APPLICABLE ON HIRING CHARGES OF BOAT PAID TO SHM SHIP CARE, MUMBAI WHICH COVER USES OF PLANT AND MACHINERY AND NOT THE PROVISION OF 194C OF I.T. ACT. 3.THE LD.CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT AFTER 13.7.2006 THE PROVISION OF 1941 IS APPLICABLE ON HIRING CHARGES OF SCROLLER PUT UP AT THE INTERNATIONAL AS WELL AS DOMESTIC AIRPORT PAID TO M/S P&B MEDIA CONSULTANT AND HOLDINGS FOR DISPLAY OF ADVERTISEMENT AT VARIOUS LOCATION AT GUJARAT PAID TO M/S. CHITRA PUBLICITY CO. PVT. LT D. WHICH COVER USES OF PLANT AND MACHINERY AND NOT THE PROVISION OF 194C OF I.T. ACT. 4THE LD.CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT AFTER 13.7.2006 THE PROVISION OF 1941 IS APPLICABLE ON HIRING CHARGES OF BUSES PAID TO GUJARAT ROAD TRANSPORT CORPO RATION WHICH COVER USES OF PLANT AND MACHINERY AND NOT THE PROVISION OF 194C OF I.T. ACT. GROUND NO. 1 IS GENERAL AND THEREFORE NOT ADJUDICATED. GROUND NO. 2 IS WITH RESPECT TO HIRE CHARGES FOR BOAT AND GROUND NO. 3 IS WITH RESPECT TO ADVERTISEMENT. 16. B EFORE US, BOTH THE PARTIES SUBMITTED THAT THE GROUNDS NO. 2 & 3 ARE IDENTICAL TO GROUND NO. 2 & 3 FOR A.Y. 09 - 10 EXCEPT FOR THE AMOUNTS AND THE SUBMISSIONS MADE BY THEM WHILE ARUGING THE GROUNDS FOR A.Y. 09 - 10 WOULD EQUALLY APPLY TO PRESENT GROUNDS. 17. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BEFORE US, SINCE BOTH THE PARTIES HAVE ADMITTED THAT THE PRESENT GROUNDS ARE SIMILAR TO GROUND NO. 2 & 3 FOR A.Y. 09 - 10 (ITA NO NO. 3302/AHD/2010) WE FOR SAME REASONS GIVEN HEREINABOVE, WHILE DISPOSING THE APPEAL FOR A.Y. 09 - 10, ALSO DISMISS THE PRESENT GROUNDS. THUS THESE GROUNDS OF REVENUE ARE DISMISSED. GROUND NO. 4 IS WITH RESPECT TO TDS ON HIRING CHARGES OF BUSES PAID TO GUJARAT STATE ROAD TRANSPORT CORPORATION (GSRTC) . 18. A.O NOTICED T HAT ASSESSEE HAD MAD E PAYMENT OF RS. 1,15,16,532/ - TO GUJARAT STATE ROAD TRANSPORT CORPORATION (GSRTC) FOR HIRING OF BUSES. HE ALSO NOTICED THAT ASSESSEE HAD NOT DEDUCTED TDS BEFORE MAKING THE PAYMENT OF HIRE ITA NO S. 3301 & 3302/AHD/2010 . A.Y S . 2008 - 09 & 2009 - 10 8 CHARGES . A.O WAS OF THE VIEW THAT THE HIRE CH ARGES FOR VEHICLES PAID BY THE ASSESSEE WERE IN THE NATURE OF RENT AND WERE SUBJECT TO PROVISIONS OF SECTION 194I OF THE ACT. SINCE ASSESSEE HAD NOT DEDUCTED TDS HE WORKED OUT THE TAX U/S 201 AND INTEREST U/S 201(1A) AT RS. 14,75,492/ - . AGGRIEVED BY THE OR DER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) GRANTED RELIEF TO THE ASSESSEE BY HOLDING AS UNDER: - 11. AS IS CLEAR FROM THE APPELLANT'S SUBMISSION, AS FAR AS THE LIABILITY TO DEDUCT THE TAX IS CONCERNED, THE SAME HAS BEEN MORE OR LESS ADMI TTED. IT IS AN ADMITTED FACT THAT THE APPELLANT HAS HIRED BUSES FROM M/S. G.S.R.T.C. BUT HAS NOT BEEN DEDUCTED TAX AS PER THE PROVISIONS OF SECTION 194C FOR THE PAYMENTS MADE. FURTHER, AS OBVIOUS FROM THE PRECEDING PARA, THE APPELLANT HAS SUBMITTED SUFFICI ENT SUBSTANTIATION TO THE EFFECT OF M/S. GSRTC HAVING BEEN A CHARITABLE ENTITY AS ALSO HAVING NO TAX LIABILITY FOR THE PERIOD IN QUESTION AND HENCE, BENEFIT OF DEPARTMENTAL INSTRUCTION NO. 275/201 /95 - IT/(B) DATED 29.07.1997 CANNOT BE DENIED TO APPELLANT. 12. REGARDING THE AUTHORIZED REPRESENTATIVE'S REFERENCE TO BOARD'S CIRCULAR DATED 29/01/1997 AND THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN COCO COLA BEVERAGES (P) LTD. (SUPRA), I AM OF THE VIEW THAT THE SAME IS SQUARELY APPLICABLE SO FAR AS THE PRESENT APPEAL IS CONCERNED. 19. AGGRIEVED BY THE ORDER OF LD CIT(A) , REVENUE IS NOW IN APPEAL BEFORE US. 20. BEFORE US LD D.R. SUBMITTED THAT ASSESSEE SHOULD HAVE DEDUCTED TDS BEFORE MAKING PAYMENT TO GSRTC. HE FURTHER SUBMITTED THAT IF GSRTC W AS NOT LIABLE FOR TAX , IT SHOULD HAVE OBTAINED LOWER/NIL DEDUCTION TAX CERTIFICATE FROM THE ASSESSING OFFICER AND THEN THE ASSESSEE COULD HAVE BEEN JUSTIFIED FOR NON DEDUCTION OF TAX. HE THEREFORE SUBMITTED THAT CIT(A) HAS WRONGLY HELD THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX. HE THUS SUPPORTED THE ORDER OF A.O. ON THE OTHER HAND LD A.R. SUBMITTED THAT ASSESSEE AND THE PAYEE BOTH ARE GOVERNMENT CONCERNS. HE FURTHER SUBMITTED THAT THE AMOUNT PAID BY THE ASSESSEE TO GSRTC HAS ALREADY BEEN CONSIDERED BY GSRTC AS ITS INCO ME AND HAS ALSO PAID THE TAX. H E PLACED ON RECORD THE COPY OF THE ACKNOWLEDGEMENT OF FILING OF RETURN, COMPUTATION OF INCOME, RECEIPT AND EXPENDITURE ACCOUNT AT PAGE 39 TO 42 OF THE PAPER BOOK. HE ALSO PLACED ON RECORD THE COPY OF THE CERTIFICAT E ISSUED BY GSRTC WHEREIN THEY HAVE CONFIRMED OF CONSIDERING THE A MOUNT RECEIVED FROM ASSESSEE AS ITS INCOME. THE LD A.R. THEREFORE SUBMITTED THAT ONCE THE PAYEE HAS PAID THE TAXES , THE ASSESSEE CANNOT BE CONSIDERED TO BE ASSESSEE IN DEFAULT AND FOR WHI CH HE PLACED RELIANCE ON THE DECISION IN THE CASE OF HINDUSTAN COCO COLA BEVERAGES VS. CIT (SUPRA). HE WAS SUPPORTED THE ORDER OF CIT(A). ITA NO S. 3301 & 3302/AHD/2010 . A.Y S . 2008 - 09 & 2009 - 10 9 21. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT ASSESSEE HAS MA DE PAYMENT OF HIRE CHARGES TO GSRTC WHICH IS ALSO GOVERNMENT UNDERTAKING. IT IS ALSO A FACT THAT THE AMOUNT PAID BY THE ASSESSEE HAS BEEN CONSIDERED AS INCOME BY THE PAYEE. BEFORE US , ASSESSEE HAS RELIED ON THE DECISION IN THE CASE OF HINDUSTAN COCO COLA B EVERAGES(SUPRA) FOR THE PROPOSITION THAT IF THE PAYEE HAS PAID THE TAX, THE DEDUCTOR CANNOT BE HELD TO BE AN ASSESSEE IN DEFAULT . BEFORE US, REVENUE HAS NOT BROUGHT ANY CONTRARY BINDING DECISION BEFORE US IN SUPPORT OF ITS CONTENTION. FURTHER WE FIND TH AT CIT(A) HAS RELIED ON DEPARTMENTAL INSTRUCTION NO. 275/201/95 - IT/(B) DATED 29.7.1997. BEFORE US, REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF CIT(A). IN VIEW OF THESE FACTS WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A). THUS THIS GROUND OF REVENUE IS DISMISSED. 22. THUS THE APPEAL OF REVENUE IS DISMISSED. 23. IN THE RESULT, BOTH THE APPEAL S OF REVENUE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 25 - 0 9 - 201 4 . SD/ - SD/ - (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD