ITO (TDS), Mathura V. M/s Indian Oil Corporation Ltd., Mathura

ITA 41/AGR/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60150 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-05-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 25-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R MURLIDHAR
• Section: 133A; 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NOS.14 & 15/AGR/2010 ASSESSMENT YEARS : 2009-10 & 2008-09 RESPECTIVELY M/S INDIAN OIL CORPORATION LIMITED, VS. INCOM E TAX OFFICER (TDS), (MARKETING DIVISION), MATHURA. MATHURA REFINERY, MATHURA. (PAN: AAACI 1681 G). ITA NOS.41 & 42/AGR/2010 FINANCIAL YEARS : 2008-09 & 2007-08 RESPECTIVELY INCOME TAX OFFICER (TDS), VS. M/S INDIAN OIL CORPO RATION LIMITED, MATHURA. (MARKETING DIVISION), MATHURA REFINERY, MATHURA. (PAN: AAACI 1681 G). ITA NOS.98 & 99/AGR/2010 ASSESSMENT YEARS : 2009-10 & 2008-09 RESPECTIVELY M/S INDIAN OIL CORPORATION LIMITED, VS. INCOM E TAX OFFICER (TDS), (MARKETING DIVISION), MATHURA. MATHURA REFINERY, MATHURA. (PAN: AAACI 1681 G). ITA NOS.103 & 104/AGR/2010 FINANCIAL YEARS : 2007-08 & 2008-09 RESPECTIVELY INCOME TAX OFFICER (TDS), VS. M/S INDIAN OIL CORPO RATION LIMITED, MATHURA. (MARKETING DIVISION), MATHURA REFINERY, MATHURA. (PAN: AAACI 1681 G). (APPELLANTS) (RESPONDENTS) ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 2 ASSESSEE BY : SHRI R. MURLIDHAR, ADVOCATE REVENUE BY : SHRI WASEEM ARSHAD, SR. D.R. DATE OF HEARING : 22.05.2012 DATE OF PRONOUNCEMENT : 25.05.2012 ORDER PER BENCH: THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND R EVENUE. ITA NOS.14 & 15/AGR/2010 BY THE ASSESSEE AND ITA NOS.41 & 42/AGR /2010 BY THE REVENUE HAVE BEEN FILED AGAINST COMMON ORDERS DATED 15.12.2009 F OR F.YS. 2007-08 & 2008-09 AND ITA NOS.98 & 99/AGR/2010 BY THE ASSESSEE AND IT A NOS.103 & 104/AGR/2010 BY THE REVENUE HAVE BEEN FIELD AGAINST COMMON ORDER S DATED 15.01.2010 FOR F.YS. 2007-08 & 2008-09 RESPECTIVELY PASSED BY THE LEARNE D CIT (APPEALS)-I, AGRA. ITA NOS.14 & 15/AGR/2010 BY THE ASSESSEE AND ITA NO S.41 & 42/AGR/2010 BY THE REVENUE 2. THE COMMON GROUNDS RAISED IN THESE APPEALS PERTA IN TO RATE OF DEDUCTION OF TAX AT SOURCE ON TRANSPORTATION CHARGES PAID TO THE TRANSPORTER FOR CARRIAGE OF GOODS FROM ONE LOCATION TO ANOTHER LOCATION. ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 3 3. THE BRIEF FACTS OF THE ISSUE ARE THAT A SURVEY U NDER SECTION 133A OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) WAS CO NDUCTED ON 09.02.2009. THE ASSESSEE IS RUNNING OIL REFINERY AND MANUFACTURING PETROL, DIESEL AND OTHER PETROLEUM PRODUCTS. THE SAID PRODUCTS ARE BEING TR ANSPORTED FROM THE REFINERY TO THE MARKET TO VARIOUS DESTINATIONS THROUGH TRUCK TA NKERS ETC. DURING THE COURSE OF SURVEY, IT WAS FOUND THAT THE ASSESSEE HAD BEEN MAK ING PAYMENTS TO THE OPERATORS FROM WHOM IT HAD TAKEN TANKERS FOR TRANSPORTATION O F OIL AND OIL PRODUCTS FROM ITS REFINERY TO VARIOUS PLACES AND DEDUCTING TAX AT SOU RCE UNDER SECTION 194C OF THE ACT @ 2%. THE ASSESSING OFFICER WAS OF THE VIEW TH AT AFTER 01.06.2007 THE ASSESSEE WAS LIABLE TO DEDUCT TAX @ 10% AS PER AMEN DED PROVISIONS OF SECTION 194- I OF THE ACT. THE ASSESSING OFFICER ACCORDINGLY CR EATED DEMAND OF SHORT DEDUCTION AND CHARGED INTEREST UNDER SECTION 201(1) AND 201(1 A) READ WITH SECTION 194-I OF THE ACT AS UNDER :- FINANCIAL YEAR SHORT DEDUCTION INTEREST CHARGED TO TAL DEMAND 2007-08 62470407 9750136 72220533 2008-09 (TILL DEC 08) 48838751 3183563 52022324 TOTAL 111309158 12933699 124242857 4. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE P AYMENTS MADE BY THE ASSESSEE ARE COVERED BY THE DEFINITION OF RENT FOR PLANT AND PLANT INCLUDES SHIPS, VEHICLES, BOOKS, ETC. THE CIT(A) AFTER CONSIDERING THE ASSESSEES SUBMISSIONS AND ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 4 VARIOUS TERMS AND CONDITIONS OF AGREEMENT BETWEEN T HE ASSESSEE AND THE CONCERNED PARTIES, CBDT CIRCULAR N.558 DATED 28.03.1990 AND A MENDED PROVISIONS OF SECTION 194-I W.E.F. 01.06.2007 FOUND THAT THE ASSESSEE HAS ENTERED INTO THE AGREEMENT FOR TAKING TANK/TRUCK ON HIRE FOR PURPOSE OF TRANSPORTI NG ITS PRODUCTS. THE CIT(A) WAS OF THE VIEW THAT THE AGREEMENT EXECUTED ARE TYPICAL AGREEMENT WHICH CANNOT BE SAID THAT THESE AGREEMENTS WERE PURELY FOR TAKING T HE TANKER TRUCKS ON RENT NOR THAT THE CONTRACTORS HAVE SIMPLY TRANSPORTED THE PETROLE UM PRODUCTS AND CARRIED OUT WORK AS STIPULATED IN THE AGREEMENT. THE CIT(A) WA S OF THE VIEW THAT BOTH THE SECTIONS 194C AND 194-I OF THE ACT ARE APPLICABLE. THE CIT(A) ACCORDINGLY HELD THAT IT WILL BE FAIR AND REASONABLE IF 50% OF THE P AYMENT IS HELD TO BE LIABLE FOR TDS UNDER SECTION 194-I AND BALANCE 50% UNDER SECTI ON 194C OF THE ACT. 5. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF TH E CIT(A) RAISING A GROUND THAT THE CIT(A) HAS ERRED IN DIRECTING THAT ONLY 50 % OF THE PAYMENT OF HIRE CHARGES OF TANKER IS LIABLE FOR TDS UNDER SECTION 194-I OF THE ACT. THE CIT(A) OUGHT TO HAVE HELD THAT THE ENTIRE PAYMENT IS SUBJECT TO TDS UNDER SECTION 194-I OF THE ACT. THE ASSESSEE IS IN APPEAL RAISING EFFECTIVE GROUND THAT THE CIT(A) HAS ERRED IN HOLDING THAT 50% OF PAYMENT IS SUBJECT TO TDS UNDER SECTION 194-I OF THE ACT WHEREAS THE ASSESSEE WAS CORRECTLY FOLLOWING IN MAK ING TAX DEDUCTED AT SOURCE UNDER SECTION 194C @ 2%. ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 5 6. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE LD. AUTHORISED REPRESENTATIVE AFTER BRIEFING ON THE TERMS AND CONDITIONS OF THE AGREEMENT AND FACTS OF THE CASE SUBMITTED THAT THE ISSUE IS COVERED N FAVOUR OF THE ASSESSEE BY VARIOUS DECISIONS OF I.T.A.T. AND HONB LE HIGH COURTS INCLUDING ASSESSEES OWN CASE BY DELHI BENCH IN THE CASE OF I .T.O., HARDWAR VS. INDIAN OIL CORPORATION (MARKETING DIVISION) IN ITA NOS.1829 TO 1834/DEL/2011 AND C.O. NOS.166 TO 171/DEL/2011 ORDER DATED 16 TH NOVEMBER, 2011. THE RELEVANT FINDING OF I.T.A.T. IS REPRODUCED AS BELOW :- WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE AS ALSO THE AFORESAID DECISIONS. THE ISSUE BEFORE US IS AS TO WHETHER THE ASSESSEE COMPANY WAS REQUIRED TO DEDUCT TAX AT SOURCE IN TERMS OF PROVISIONS OF SEC.194C OR U/S SEC.194-I OF THE ACT WHILE MAKING PAYMENTS TO THE CARRIER FOR TRANSPORTATION O F PETROLEUM PRODUCTS IN ACCORDANCE WITH AGREEMENT, SAMPLE COPY OF WHICH IS PLACED AT PG. 59 TO 72 OF THE PAPER BOOK. THE RELE VANT PROVISIONS OF SEC. 194C, STIPULATING DEDUCTION OF TAX AT SOURCE F ROM PAYMENTS TO CONTRACTORS FALL UNDER PART B OF THE CHAPTER-XVII O F THE ACT. IN TERMS OF THESE PROVISIONS, ANY PERSON RESPONSIBLE FOR PAY ING ANY SUM TO ANY RESIDENT FOR CARRYING OUT ANY WORK INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK IN PURSUANCE OF A CONTRACT BE TWEEN THE CONTRACTOR AND A SPECIFIED PERSON SHALL, AT THE TIM E OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF CHEQUE OR DRAFT OR ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO THE PERCENTAGE S PECIFIED THEREUNDER OF SUCH SUM AS INCOME TAX. THE TERM WO RK DEFINED IN CLAUSE (IV) OF THE EXPLANATION TO THE SEC. 194C OF THE ACT INCLUDES IN SUB-CLAUSE(C) CARRIAGE OF GOODS OR PASSENGERS BY AN Y MODE OF TRANSPORT OTHER THAN BY RAILWAYS. ON THE OTHER PROV ISIONS OF SEC. 1941 OF THE ACT FALLING UNDER THE SAME CHAPTER BEAR THE HEADING RENT. THE PROVISIONS OF THE SAID SECTION STIPULATE THAT A NY PERSON, NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHO IS R ESPONSIBLE FOR ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 6 PAYING TO A RESIDENT ANY INCOME BY WAY OF RENT ON A CCOUNT OF LAND, BUILDING, FURNITURE OR FITTINGS, MACHINERY, PLANT O R EQUIPMENT, SHALL AT THE TIME OF CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF CHEQ UE OR DRAFT OR ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT INCOME TAX THEREON AT THE RATE SPECIFIED THEREUNDER. 5.1 EXAMINING THE FACTS OF THE INSTANT CASE IN THE LIGHT OF THE AFORESAID STATUTORY PROVISIONS AND FROM THE UNDISPU TED FINDINGS OF FACTS RECORDED BY THE ID. CIT (APPEALS) IT IS APPAR ENT THAT THE ARRANGEMENT IN TERMS OF THE AFORESAID AGREEMENT IS OF THE NATURE OF TRANSPORT AGREEMENT AND NOT ONE FOR HIRING OF VEHIC LES, THE AGREEMENT BEING FOR TRANSPORTATION OF PETROLEUM PRODUCTS INCL UDING INDANE GAS. THE PREAMBLE TO THE AGREEMENT ITSELF SAYS THAT THE ASSESSEE COMPANY FOR DISTRIBUTION OF PETROLEUM PRODUCTS REQUIRED TAN K TRUCKS FOR ROAD TRANSPORTATION OF BULK PETROLEUM PRODUCTS FROM ITS VARIOUS STORAGE POINTS TO CUSTOMERS/OTHER STORAGE POINTS. AS PER C LAUSE 1 OF THE AGREEMENT, THE CARRIER ENGAGED IN THE BUSINESS OF O PERATING TANK TRUCKS, AGREED TO PROVIDE A STIPULATED NUMBER OF TA NK TRUCKS FOR THE EXCLUSIVE USE OF THE COMPANY. CLAUSE 2 STIPULATES THAT EACH TANK TRUCK WOULD BE ATTACHED TO A PARTICULAR LOADING/STORAGE P OINT FOR TRANSPORTATION OF BULK PETROLEUM PRODUCTS AND THE A SSESSEE COMPANY CAN ASSIGN A PARTICULAR TANK TRUCK TO DIFFERENT LOA DING/STORAGE POINT. IN TERMS OF CLAUSE 3 OF THE AGREEMENT, THE CARRIER ALONE IS REQUIRED TO PROVIDE CREW (DRIVER & CLEANER) FOR EFFICIENT OPERA TIONS. IN OTHER WORDS, IN THE INSTANT CASE THE TANK TRUCK OWNERS NO T SIMPLY CONFINED THEMSELVES TO THE EXTENT OF PROVIDING VEHICLES AT T HE DISPOSAL OF THE ASSESSEE IN LIEU OF RENT BUT ALSO ENGAGED THEIR DRI VERS IN DRIVING SUCH VEHICLES AND THEREBY IN TRANSPORTING PETROLEUM PROD UCTS FROM ONE PLACE TO THE OTHER. IN EFFECT, TANK TRUCK REMAINS IN POSSESSION OF THE STAFF OF THE CARRIER. IN THE EVENT TANK TRUCK IS N OT MADE AVAILABLE ON ANY PARTICULAR DAY, THE ASSESSEE COMPANY IS FREE TO USE THE SERVICES OF ANY OTHER TANK TRUCK AND RECOVER THE DIFFERENCE IN TRANSPORTATION CHARGES FROM THE CARRIER. THE ASSESSEE COMPANY, IN TERMS CLAUSE 6 OF THE AGREEMENT, IS REQUIRED TO PAY FOR THE TRANSPORT ATION WORK IN ACCORDANCE WITH STIPULATED RATES ON PER KL PER KM B ASIS. INTER ALIA, IT IS STIPULATED THAT NO IDLE CHARGES WOULD BE PAYA BLE. IN TERMS OF CLAUSE 8, THE CARRIER IS RESPONSIBLE FOR LOADING AN D DISCHARGE AND IN THE EVENT OF SHORTAGE, THE CARRIER IS MADE RESPONSI BLE. AFTER ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 7 CONSIDERING VARIOUS CLAUSES OF THE SAMPLE AGREEMENT , WE ARE OF THE OPINION THAT THE SAID AGREEMENT IS ESSENTIALLY FOR TRANSPORTATION OF BULK PETROLEUM PRODUCTS AND NOT FOR HIRING OF TANK TRUCKS. WE FIND THAT THE HON'BLE GAUHATI HIGH COURT IN THEIR DECISION DA TED 27.2.2009 IN CR3997/1998 IN THE CONTEXT OF DEDUCTION OF TAX U/S 27(A) OF THE ASSAM GENERAL SALES TAX ACT, 1993, AFTER ANALYZING THE TE RMS OF A SIMILAR AGREEMENT IN THE CASE OF THE ASSESSEE OBSERVED THAT THE SAID AGREEMENT OBLIGED THE CONTRACTOR TO OPERATE THE VEH ICLES FOR THE PURPOSE OF CARRYING PETROLEUM AND PETROLEUM PRODUCT S, AS PER THE DIRECTIONS OF THE ASSESSEE COMPANY, FROM ONE PLACE TO ANOTHER. IF THE VEHICLE REMAINED OFF THE ROAD AND, CONSEQUENT THERE UPON, THE ASSESSEE COMPANY SUSTAINED ANY LOSS, THE CONTRACTOR WAS LIAB LE TO MAKE GOOD THE LOSS. IF, IN CERTAIN CIRCUMSTANCES, THE CONTRAC TOR WAS UNABLE TO CARRY THE PETROLEUM AND/OR PETROLEUM PRODUCTS IN A PARTICULAR VEHICLE, WHEREIN HE HAD UNDERTAKEN TO CARRY, HE COU LD CARRY THE PRODUCTS IN DRUMS IN STAKE-TRUCKS. SIMILARLY, THE CONTRACTOR WAS ALSO LIABLE TO MAKE GOOD THE LOSS, WHICH THE ASSESS EE COMPANY MIGHT SUSTAIN DUE TO SHORT DELIVERY OF ITS PRODUCTS OR DU E TO CONFISCATION THEREOF DURING THE COURSE OF CARRIAGE. IN THE LIGHT OF VARIOUS TERMS AND CONDITIONS OF THE AGREEMENT, THE HON'BLE HIGH COURT , OBSERVED THAT 54. THUS, WHEN THE CONTRACT AGREEMENT IS READ CLAU SE-BY-- CLAUSE, IT BECOMES ABUNDANTLY CLEAR THAT THERE IS N O TRANSFER OF THE RIGHT TO USE THE VEHICLE INVOLVED IN THE CONTRA CT AGREEMENT AND THAT THE CONTRACT AGREEMENT IS MERELY FOR CARRI AGE OF THE PETROLEUM AND PETROLEUM PRODUCTS AND NOTHING MORE. 5.2 THEREAFTER, HONBLE HIGH COURT AFTER CONSIDERIN G THE DECISIONS IN AHUJA GOODS AGENCIES V. STATE OF U.P. REPORTED I N (1997) 106 STC 540 AND LAXMI AUDIO VISUAL V. ASSTT. COMMISSIONER O F COMMERCIAL TAXES, REPORTED IN (2001) 124 STC 426 (KAR) CONCLUD ED AS UNDER: 58. IN THE CASE AT HAND TOO, THE TRANSACTIONS DO N OT AMOUNT TO TRANSFER OF THE RIGHT TO USE THE GOODS IN AS MUCH A S THE CONTRACTOR, AS A TRUSTEE OF THE PETROLEUM AND PETRO LEUM PRODUCTS, CARRIES THE SAME IN THE IDENTIFIED VEHICL ES OR IN EXCEPTIONAL CIRCUMSTANCES, IN SUCH A MANNER AS HAVE BEEN AGREED TO BY THE PARTIES CONCERNED ...... ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 8 5.3 IN NUTSHELL, THE HON'BLE GAUHATI COURT CONCLUD ED THAT THE CONTRACT WAS ESSENTIALLY FOR TRANSPORTATION OF PETR OLEUM PRODUCTS AND NOT FOR HIRING OF TRUCKS/TANKERS. FOLLOWING THE VIE W TAKEN IN THIS DECISION, THE ID. CIT(A) CONCLUDED THAT PROVISIONS OF SEC. 194C WERE APPLICABLE IN THE INSTANT CASE AND NOT THE PROVISIO NS OF SEC. 1941 OF THE ACT. THE ID. DR DID NOT PLACE ANY MATERIAL BEF ORE US IN ORDER TO CONTROVERT THE AFORESAID FINDING OF FACTS RECORDED BY THE ID. CIT(A) NOR BROUGHT TO OUR NOTICE ANY CONTRARY DECISION. 6. WE FURTHER FIND THAT THE HON'BLE GUJARAT HIGH C OURT WHILE ADJUDICATING A SIMILAR ISSUE IN RESPECT OF DEDUCTIO N OF TAX AT SOURCE FROM PAYMENTS FOR HIRING DUMPERS FOR TRANSPORTING B UILDING MATERIAL CONCLUDED IN THEIR DECISION DATED 11.01.2001 IN THE CASE OF SHREE MAHALAXMI TRANSPORT CO. IN ITA NO.1038 OF 2009 IN THE FOLLOWING TERMS:- 5. THE COMMISSIONER (APPEALS) UPON APPRECIATION OF THE EVIDENCE ON RECORD HAS FOUND THAT THE ASSESSEE HAD GIVEN SUB- CONTRACTS OF TRANSPORTATION OF GOODS FROM ONE PLACE TO ANOTHER. TO PROVE THE NATURE OF CONTRACTS, THE ASSESSEE HAD PRODUCED VARIOUS BILLS ISSUED BY SUCH; SUB-CONTRACTORS TO SH OW THAT, THE CONTRACTS WERE MAINLY CARRIED OUT FOR SHIFTING OF G OODS FROM ONE PLACE TO ANOTHER. THE COMMISSIONER (APPEALS) AL SO FOUND THAT THE CHARGES WERE COLLECTED BY SUB-CONTRACTORS ON THE BASIS OF THE QUANTITY OF GOODS TRANSPORTED AND THE NUMBE R OF TRIPS CARRIED OUT; THE ASSESSEE HAD NOT ACQUIRED DUMPERS ON RENT OR LEASE; AND THAT THE POSSESSION AND CONTROL OF VEHIC LES WAS WITH THE SUB-CONTRACTORS, WHO ONLY PROVIDED SERVICES OF SHIFTING OF GOODS FROM ONE PLACE TO ANOTHER PLACE. IT WAS NOTED THAT EVIDENCE IN SUPPORT OF ABOVE WAS SUBMITTED TO THE A SSESSING OFFICER DURING ASSESSMENT PROCEEDINGS. IN THE BACKG ROUND OF THE AFORESAID FINDINGS OF FACT RECORDED BY HIM, THE COMMISSIONER (APPEALS) WAS OF THE VIEW THAT WHEN TH E. TRANSPORTATION, CONTRACT WAS IN THE NATURE OF SHIFT ING OF GOODS FROM ONE PLACE TO ANOTHER, SUCH CONTRACTS WOULD BE COVERED AS WORKS CONTRACTS AND PROVISIONS OF SECTION 194C WOUL D BE APPLICABLE, ACCORDING TO THE COMMISSIONER (APPEALS) , SINCE THE ASSESSEE HAD GIVEN SUB-CONTRACTS FOR TRANSPORTATION OF GOODS AND NOT FOR THE RENTING OUT OF MACHINERIES OR EQUIP MENTS, SUCH ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 9 PAYMENTS COULD NOT BE TERMED AS RENT PAID FOR THE U SE OF MACHINERY AND THE PROVISIONS OF SECTION 194-I OF TH E ACT WOULD NOT APPLY TO SUCH CONTRACTS. THE COMMISSIONER (APPE ALS) ACCORDINGLY HELD THAT THE ASSESSEE HAS RIGHTLY DEDU CTED TDS UNDER SECTION 194C OF THE ACT; THAT THERE WAS NO DE FAULT NO THE PART OF THE ASSESSEE UNDER THE TDS PROVISIONS AND A S SUCH THERE WAS NO SHORT DEDUCTION OF TAX AND SET ASIDE THE LEV Y OF INTEREST UNDER SECTION 201 (1A) OF THE ACT. ... 9. EXAMINING THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE AFORESAID STATUTORY PROVISIONS, FROM THE FINDINGS O F FACT RECORDED BY THE COMMISSIONER (APPEALS) IT IS APPARE NT THAT THE ASSESSEE HAS NOT TAKEN THE DUMPERS ON HIRE RENT FRO M THE PARTIES IN QUESTION. THE ASSESSEE HAS GIVEN CONTRA CTS TO THE SAID PARTIES FOR THE TRANSPORTATION OF GOODS AND HA S NOT TAKEN MACHINERIES AND EQUIPMENT ON RENT. IN THE CIRCUMSTA NCES, THE COMMISSIONER (APPEALS) WAS JUSTIFIED IN HOLDING THA T THE TRANSACTIONS IN QUESTION BEING IN THE NATURE OF CON TRACTS FOR SHIFTING OF GOODS FROM ONE PLACE TO ANOTHER WOULD B E COVERED AS WORKS CONTRACTS, THEREBY ATTRACTING THE PROVISIO NS OF SECTION 194C OF THE ACT. THAT SINCE THE ASSESSEE HAD GIVEN SUB- CONTRACTS FOR TRANSPORTATION OF GOODS AND NOT FOR T HE RENTING OUT OF MACHINERIES OR EQUIPMENTS, SUCH PAYMENTS COULD N OT BE TERMED AS RENT PAID FOR THE USE OF MACHINERY AND TH E PROVISIONS OF SECTION 194-I OF THE ACT WOULD NOT BE APPLICABLE . THE TRIBUNAL WAS, THEREFORE, JUSTIFIED IN UPHOLDING THE ORDER PASSED BY THE COMMISSIONER (APPEALS). 7. LIKEWISE, IN THEIR ANOTHER DECISION DATED 11.1. 2001 IN THE CASE OF CIT VS. SWAYAM SHIPPING SERVICES PVT. LTD. IN ITA N O.1037 OF 2009, HON'BLE GUJRAT HIGH COURT CONCLUDED AS UNDER:- 6. THE FACTS ARE NOT IN DISPUTE. THE ASSESSEE HAS CARRIED OUT FREIGHT AND TRANSPORTATION WORKS CONTRACTS WITH THR EE TRANSPORTERS WHO TRANSPORTED THE GOODS BELONGING TO THE ASSESSEE AND ITS CLIENTS TO VARIOUS PLACES THROUGH THEIR VEHICLES. THE ASSESSEE HAD NOT TAKEN THE TRAILERS/CRANES ON H IRE OR RENT ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 10 FROM THE SAID PARTIES. THE ASSESSEE HAS GIVEN SUB-C ONTRACTS TO THE SAID PARTIES FOR THE TRANSPORTATION OF GOODS AN D NOT FOR RENTING OUT OF MACHINERIES AND EQUIPMENTS. SECTION 194-I OF THE ACT MAKES PROVISION OF DEDUCTION OF TAX AT SOUR CE WHERE ANY PERSON WHO IS RESPONSIBLE FOR PAYING TO A RESIDENT ANY INCOME BY WAY OF RENT WHERE AS SECTION 194C OF THE ACT MAK ES PROVISION FOR DEDUCTION OF TAX AT SOURCE WHERE ANY PERSON IS RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT FOR CARRYING OUT ANY WORK INCLUDING SUPPLY OF LABOUR FOR CARRYING OU T ANY WORK IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR A ND A SPECIFIED PERSON. IN THE FACTS OF THE PRESENT CASE , THERE IS NOTHING TO INDICATE THAT THE ASSESSEE HAS TAKEN TRA ILERS/CRANES ON RENT SO AS TO ATTRACT THE PROVISIONS OF SECTION 194-I OF THE ACT. THE ASSESSEE HAD GIVEN SUB-CONTRACTS FOR TRAN SPORTATION OF GOODS. IN THE CIRCUMSTANCES, THE SAID TRANSACTIONS WOULD FALL WITHIN THE PURVIEW OF SECTION 194C OF THE ACT AS TH E ASSESSEE WAS RESPONSIBLE FOR PAYING THE AMOUNT IN QUESTION F OR CARRYING OUT WORK IN PURSUANCE OF CONTRACTS BETWEEN THE ASSE SSEE AND THE TRANSPORTERS AND AS SUCH WAS REQUIRED TO DEDUCT TAX AT SOURCE AT THE RATE PRESCRIBED UNDER THE SAID SECTIO N. THE COMMISSIONER (APPEALS) WAS, THEREFORE, JUSTIFIED IN HOLDING THAT THE ASSESSEE WAS NOT AN ASSESSEE IN DEFAULT WI THIN THE MEANING OF THE SAID EXPRESSION AS CONTEMPLATED UNDE R SECTION 201 OF THE ACT AND CONSEQUENTLY, THE TRIBUNAL WAS J USTIFIED IN CONFIRMING THE ORDER PASSED BY THE COMMISSIONER (AP PEALS). 8. APART FROM CIRCULAR NOS. 558 AND 681 ISSUED BY THE CBDT, CLAUSE 49.3 OF THE EXPLANATORY NOTES TO FINANCE (NO .2) ACT, 2009 POINTS OUT THAT TAX IS REQUIRED TO BE DEDUCTED AT SOURCE I N TERMS OF PROVISIONS OF SEC. 194C OF THE ACT ON PAYMENTS TO TRANSPORT CO NTRACTORS' ENGAGED IN THE BUSINESS OF PLYING, HIRING OR LEASING GOODS CARRIAGES AND AMENDED PROVISIONS WOULD EXEMPT PAYMENTS TO TRANSPO RT OPERATORS IF OPERATOR FURNISHES ITS PAN TO THE DEDUCTOR. 9. WE ALSO FIND THAT THE HON'BLE BOMBAY HIGH COURT IN THEIR DECISION DATED 29.6.2007 IN INDIAN NATIONAL SHIP OW NERS ASSOCIATION AND OTHERS VS. CIT (TDS) IN CWP NO. 400 OF 2007 CON CLUDED THAT THE PROVISIONS OF SECTION 194-I OF THE ACT ARE APPLICAB LE ONLY IN RESPECT OF RENT FOR LAND OR BUILDING (INCLUDING FACTORY BUILDI NG), FURNITURE, FITTINGS ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 11 OR ANY OTHER MACHINERY ATTACHED THERETO AND NOT FOR ANYTHING ELSE LIKE SHIPS, TRANSPORT VEHICLES (INCLUDING RAILWAYS) AND FREIGHT/CHARTER HIRE PAYMENTS THERETO. HON'BLE HIGH COURT FURTHER HELD THAT EXPLANATION-III OF SECTION 194-C, CLARIFIES THAT THE EXPRESSION 'WO RK' MEANS CARRIAGE OF GOODS AND PASSENGERS BY ANY MODE OF TRANSPORT OT HER THAN BY RAILWAYS AND TAX FROM FREIGHT PAYMENTS HAVE TO BE D EDUCTED UNDER THIS SECTION AND NOT UNDER SECTION 194-I OF THE ACT. FO LLOWING THE VIEW TAKEN IN THIS DECISION, LTAT IN THE CASE OF ACCENTU RE SERVICES (P) LTD., 2010-TIOL-618-ITAT-MUM HELD THAT EXPRESSION PLANT A ND MACHINERY USED IN EXPLANATION TO SEC. 194-I OF THE ACT REFERS ONLY TO THE PLANT AND MACHINERY USED BY THE ASSESSEE IN THEIR BUSINESS BY HIRING THEM BUT NOT THE HIRING THE TRANSPORT SERVICES. THE ITAT DELHI BENCH IN THEIR DECISION IN THE CASE OF LOTUS EDUCATION SOCIETY (SU PRA) HELD THAT PROVISIONS OF SECTION 194-I OF THE ACT COULD NOT BE APPLIED IN THE CASE OF PAYMENTS MADE TO BUS OPERATORS, PROVIDING PICK UP A ND DROP FACILITY TO SCHOOL STUDENTS. IN AHMEDABAD DEVELOPMENT AUTHORITY , ITAT AHMEDABAD BENCH IN THEIR DECISION DATED 10.3.2011 I N ITA NO.1637/AHD./2010 HELD IN THE CONTEXT OF DEDUCTION OF TAX AT SOURCE FROM FIXED RENT PAYMENTS FOR HIRING CARS THAT PROVI SIONS OF SECTION 194C OF THE ACT WERE APPLICABLE IN RESPECT OF PAYME NT FOR VEHICLE HIRE CHARGES AND NOT THE PROVISIONS OF SECTION 194-I OF THE ACT. 10. IN THE LIGHT OF CONSISTENT VIEW TAKEN IN THE A FORESAID DECISIONS AND CONSIDERING THE VARIOUS CLAUSES IN THE AFORESAI D BULK PETROLEUM PRODUCTS ROAD TRANSPORT AGREEMENT, WE HAVE NO HESIT ATION IN UPHOLDING THE FINDINGS OF ID. CIT(A) IN CONCLUDING THAT THE ARRANGEMENT FOR TRANSPORTATION OF PETROLEUM PRODUCT S WAS ESSENTIALLY A CONTRACT FOR TRANSPORTATION OF GOODS AND NOT AN ARR ANGEMENT OF HIRING OF VEHICLES. IN VIEW THEREOF, TAX IS REQUIRED TO B E DEDUCTED AT SOURCE FROM THE PAYMENTS TO THE CARRIER IN TERMS OF PROVIS IONS OF SEC. 194C OF THE ACT AND NOT U/S 194-I OF THE ACT. THEREFORE, G ROUND NOS. 1.1 & 1.2 IN THESE SIX APPEALS OF THE REVENUE ARE DISMISSED. AS A COROLLARY, GROUNDS RAISED IN THE SIX COS BECOME ACADEMIC AND D O NOT SURVIVE FOR OUR ADJUDICATION. ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 12 7. LD. DEPARTMENTAL REPRESENTATIVE, HOWEVER, RELIED UPON THE ORDER OF THE ASSESSING OFFICER BUT HE DID NOT DISPUTE THAT THE F ACTS OF THE CASE OF DELHI BENCH AND FACTS OF THE CASE UNDER CONSIDERATION ARE IDENT ICAL. 8. SINCE ON IDENTICAL SET OF FACTS THE ISSUE HAS BE EN DECIDED BY THE I.T.A.T., DELHI BENCH IN ASSESSEES OWN CASE VIDE ORDER DATED 16.11.2011, IN THE LIGHT OF THE FACTS, WE SET ASIDE THE ORDER OF CIT(A) AND THE ORD ER OF THE ASSESSING OFFICER. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE WHICH ARE IDENTICAL TO THE FACTS OF THE CASE DECIDED BY I.T.A.T., DELHI BENCH (SUPRA), WE H OLD THAT THE PAYMENTS PAID OR PAYABLE TO OPERATORS OF THE TANKER TRUCK OWNERS BY THE ASSESSEE COMPANY IS SUBJECT TO DEDUCTION OF TAX AT SOURCE UNDER SECTION 194C OF THE ACT @ 2%. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. THUS, THE APPEALS OF THE ASSESSEE FOR A.YS. 2009- 10 & 2008-09 ARE ALLOWED AND THE APPEALS OF THE REV ENUE FOR F.YS. 2008-09 & 2007-08 ARE DISMISSED. ITA NOS.98 & 99/AGR/2010 BY THE ASSESSEE AND ITA NO S.103 & 104/AGR/2010 BY THE REVENUE 9. THE COMMON ISSUE RAISED IN THESE APPEALS PERTAIN S TO DEDUCTION OF TAX AT SOURCE IN RESPECT OF PAYMENT OF HIRE CHARGES PAID F OR LMV AND BUSES. ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 13 10. DURING THE COURSE OF SURVEY CONDUCTED ON 09.02. 2009, IT WAS ALSO FOUND THAT THE ASSESSEE HIRED LMV AND BUSES FROM DIFFERENT PAR TIES FOR ITS EMPLOYEES TO LOOK AFTER THE ADMINISTRATION OF THE REFINERY AND OTHER FUNCTIONS PUNCTUALITY ETC. DURING THE COURSE OF SURVEY, IT WAS FOND THAT THE A SSESSEE WAS DEDUCTING TAX ON PAYMENT OF HIRE CHARGES @ 2% UNDER SECTION 194C OF THE ACT. THE ASSESSING OFFICER WAS OF THE VIEW THAT AFTER AMENDMENT W.E.F. 01.06.2007 THE ASSESSEE IS LIABLE TO DEDUCT TAX AT SOURCE UNDER SECTION 194-I OF THE ACT @ 10%. THE ASSESSING OFFICER ACCORDINGLY CREATED ADDITIONAL DE MAND AND CHARGED INTEREST, THE DETAILS OF WHICH ARE AS UNDER :- FINANCIAL YEAR SHORT DEDUCTION INTEREST CHARGED TO TAL DEMAND 2007-08 21,20,277 4,27,579 25,47,856 2008-09 (TILL DEC 08) 10,21,826 1,00,152 11,21,978 TOTAL 31,42,103 5,27,731 36,69,834 11. THE CIT(A) AFTER CONSIDERING THE ASSESSEES SUB MISSION AND AFTER EXAMINING THE CLAUSE-WISE AGREEMENT OF VEHICLE HIRE FOUND THA T SOME OF THE CLAUSES PERTAINING TO RENT PART IS LIABLE FOR DEDUCTION OF TAX UNDER S ECTION 194-I AND SOME OF THE CLAUSES PERTAINING TO WORK PART IS LIABLE FOR DEDUC TION OF TAX @ 2%. THE CIT(A) ACCORDINGLY APPORTIONED THE PAYMENT AS PER SECTION 194C AND 194-I AND DIRECTED THE ASSESSING OFFICER TO COMPUTE THE TAX AND INTERE ST UNDER SECTION 201(1)/201(1A) OF THE ACT. ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 14 12. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. AS PER THE DISCUSSIONS MADE ABOVE WHILE DECIDING TH E APPEALS RELATING TO TAX DEDUCTED AT SOURCE IN RESPECT OF PAYMENT FOR TANKER TRUCK ETC, WE HOLD THAT THE CIT(A) WAS NOT CORRECT IN MAKING APPORTION IN BETWE EN THE SECTIONS 194-I AND 194C OF THE ACT. IN RESPECT OF THESE APPEALS ALSO THE LD. REPRESENTATIVES OF THE PARTIES SUBMITTED THAT THE EFFECTIVE FACTS FOR DECI DING THE ISSUE ARE COMMON IN THE CASE UNDER CONSIDERATION AND IN THE CASE OF A DECIS ION OF I.T.A.T., AHMEDABAD BENCH IN THE CASE OF AHMEDABAD URBAN DEVELOPMENT AU THORITY VS. ACIT TDS CIRCLE IN ITA NO.1637/AHD/2010 ORDER DATED 10.03.20 11. THE RELEVANT FINDING NOTED FROM COPY OF ORDER FILED IN ASSESSEES PAPER BOOK IS REPRODUCED AS UNDER :- 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND TH E MATERIAL AVAILABLE ON RECORD. THE FACTS NOTED BY THE AO ARE NOT IN DISPUTE THAT THE ASSESSEE HAD HIRED CARS ON FIXED RENT PAYMENT A ND TDS WAS DEDUCTED @ 2% TREATING THE SAME AS CONTRACT AS PER SECTION 194C OF THE IT ACT. THE AO ALSO NOTED THAT THE ASSESSEE HA D MADE VEHICLE HIRE CHARGES PAYMENT IN CONNECTION WITH PLYING OF EMPLOY EES FROM ONE PLACE TO ANOTHER. IT WAS ALSO NOTED BY THE AO THAT VEHICLES ARE OWNED AND MAINTAINED BY CONTRACTORS. THE ASSESSEE PAID F IXED PAYMENT FOR USE OF THE HIRED CARS AND ALL THE EXPENSES ARE BORN E BY THE CONTRACTORS. IT IS ALSO ADMITTED FACT THAT THE ASS ESSEE IS A LOCAL AUTHORITY. THE PROVISIONS OF SECTION 194C OF THE I T ACT IS APPLICABLE TO THE ASSESSMENT YEAR UNDER APPEAL PROVIDED (A) AN Y PERSON RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT (B) ANY LOCAL AUTHORITY (AS THE ASSESSEE IS) REFERRED TO AS A CONTRACTOR FO R CARRYING OUT ANY WORK IN PURSUANCE OF THE CONTRACT BETWEEN THE CONTR ACTOR AND THE LOCAL AUTHORITIES ETC., SHALL AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE CONTRACTOR OR AT ANY TIME OF PAYMENT THEREOF IN CASH OR ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE WHI CHEVER IS EARLIER, ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 15 DEDUCT AN AMOUNT EQUAL TO, (I) 1% IN CASE OF ADVER TISING, (II) OR IN ANY OTHER CASE 2%, OF SUCH SUM AS INCOME TAX OR INC OME COMPRISED THEREIN. THE DEFINITION OF WORK HAS BEEN PROVIDED IN EXPLANATION (III) TO SECTION 194C OF THE IT ACT WHICH PROVIDES FOR THE PURPOSE OF THIS SECTION, EXPRESSION WORK SHALL ALSO INCLUDE: (A) ADVERTISING, (B) BROADCASTING AND TELECASTING INCLUDING PRODUCT ION OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING, (C) CARRIAGE OF GOODS AND PASSENGERS BY ANY MODE O F TRANSPORT OTHER THAN RAILWAYS, (D) CATERING. THE AO ADMITTED THAT THE ASSESSEE HAD HIRED THE CAR S ON FIXED RENT PAYMENT OWNED AND MAINTAINED BY CONTRACTOR. THE AS SESSEE PAID VEHICLE HIRE CHARGES AND ALL THE EXPENDITURE ARE BO RNE BY THE CONTRACTOR. IT IS ALSO ADMITTED FACT THAT VEHICLE CHARGES WERE PAID IN CONNECTION WITH PLYING OF EMPLOYEES FROM ONE PLACE TO ANOTHER. THUS, IT IMPLIES THAT THE PASSENGERS WERE TRANSPORTED BY THE DRIVERS AND VEHICLES OF THE VEHICLE OWNER/CONTRACTOR AND IN CON SIDERATION OF THAT THE VEHICLE OWNERS/CONTRACTORS WERE PAID BY THE ASS ESSEE THE FIXED AMOUNT. THEREFORE, SUB-CLAUSE (C) TO EXPLANATION (I II) OF THE PROVISIONS OF SECTION 194C OF THE IT ACT WOULD APPL Y IN THE CASE OF THE ASSESSEE. IN OUR OPINION THE ABOVE PAYMENT OF VEHIC LE HIRE CHARGES CLEARLY FALLS WITHIN THE SCOPE OF SECTION 194C OF T HE IT ACT. THE ASSESSEE, THEREFORE, CORRECTLY DEDUCTED TAX THEREOF AS PER THE PROVISIONS OF SECTION 194C (EXPLANATION (III)(C) OF THE IT ACT. SAME VIEW IS TAKEN BY ITAT AHMEDABAD B BENCH IN THE CA SE OF M/S. MUKESH TRAVELS CO. (SUPRA) COPY OF WHICH IS PLACED ON RECORD. THE AO HOWEVER, NOTED THAT THE PROVISIONS OF SECTION 19 4-I OF THE IT ACT WOULD APPLY IN THE MATTER BEING RENT PAID TO THE CO NTRACTOR WHICH PROVIDES AS UNDER: (PRIOR TO AMENDMENT W.E.F. 1-10- 2009). 194-I ANY PERSON, NOT BEING AN INDIVIDUAL OR A HIN DU UNDIVIDED FAMILY, WHO IS RESPONSIBLE FOR PAYING TO [A RESIDENT] ANY INCOME BY WAY OF RENT, SHALL, AT THE TIME OF CR EDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE OR AT THE TIME O F PAYMENT THEREOF IN CASH OR BY THE ISSUE OF A CHEQUE OR DRAF T OR BY ANY ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 16 OTHER MODE, WHICHEVER IS EARLIER, [DEDUCT INCOME-TA X THEREON AT THE RATE OF- [(A) TEN PER CENT FOR THE USE OF ANY MACHINERY OR PLANT OR EQUIPMENT; AND (B) FIFTEEN PER CENT FOR THE USE OF ANY LAND OR BUI LDING (INCLUDING FACTORY BUILDING OR LAND APPURTENANT TO A BUILDING (INCLUDING FACTORY BUILDING) OR FURNITURE OR FITTIN GS WHERE THE PAYEE IS AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY; AND;]] (C) TWENTY PERCENT FOR THE USE OF ANY LAND OR BUILD ING (INCLUDING FACTORY BUILDING), OR LAND APPURTENANT TO A BUILDIN G (INCLUDING FACTORY BUILDING) OR FURNITURE OR FITTINGS WHERE TH E PAYEE IS A PERSON OTHER THAN AN INDIVIDUAL OR A HINDU UNDIVIDE D FAMILY PROVIDED THAT NO DEDUCTION SHALL BE MADE UNDER THIS SECTION WHERE THE AMOUNT OF SUCH INCOME OR, AS THE CASE MAY BE, THE AGGREGATE OF THE AMOUNTS OF SUCH INCOME CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE FINANCIAL YEAR BY THE AFORESAID PERSON TO THE ACCOUNT OF, OR TO, THE PAYE E, DOES NOT EXCEED ONE HUNDRED AND TWENTY THOUSAND RUPEES : [PROVIDED FURTHER THAT AN INDIVIDUAL OR A HINDU UND IVIDED FAMILY, WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNOV ER FROM THE BUSINESS OR PROFESSION CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE (A) OR CLAUSE (B) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANCIAL YEAR IN WHICH SUCH INCOME BY WAY OF RENT IS CREDITE D OR PAID, SHALL BE LIABLE TO DEDUCT INCOME TAX UNDER THIS SEC TION.] EXPLANATION.- FOR THE PURPOSES OF THIS SECTION,- [(I) RENT MEANS ANY PAYMENT, BY WHATEVER NAME CAL LED, UNDER ANY LEASE, SUB-LEASE, TENANCY OR ANY OTHER AG REEMENT OR ARRANGEMENT FOR THE USE OF (EITHER SEPARATELY OR TO GETHER) ANY,- (A) LAND; OR (B) BUILDING (INCLUDING FACTORY BUILDING); OR ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 17 (C) LAND APPURTENANT TO A BUILDING (INCLUDING FACT ORY BUILDING); OR (D) MACHINERY; OR (E) PLANT; OR (F) EQUIPMENT; OR (G) FURNITURE; OR (H) FITTINGS, WHETHER OR NOT ANY OR ALL OF THE ABOVE ARE OWNED BY THE PAYEE;] (II) WHERE ANY INCOME IS CREDITED TO ANY ACCOUNT, W HETHER CALLED SUSPENSE ACCOUNT OR BY ANY OTHER NAME, IN THE BOOKS OF ACCOUNT OF THE PERSON LIABLE TO PAY SUCH INCOME, SUCH CREDITING SHALL BE DEEMED TO BE CREDIT OF SUCH INCO ME TO THE ACCOUNT OF THE PAYEE AND THE PROVISIONS OF THIS SEC TION SHALL APPLY ACCORDINGLY.] THE ABOVE DEFINITION OF RENT DOES NOT PROVIDE ANY I TEM FOR VEHICLE HIRE CHARGES. THEREFORE, PROVISIONS OF SECTION 194-I HA S BEEN WRONGLY APPLIED IN THE MATTER BY THE AO. CONSIDERING THE A BOVE DISCUSSIONS WE ARE OF THE VIEW THAT THE AUTHORITIES BELOW HAVE WRONGLY APPLIED THE PROVISIONS OF SECTION 194-I OF THE IT ACT IN THE MA TTER. WE ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHORITIE S BELOW AND DELETE THE DEMAND AND THE INTEREST THEREON FOR SHORTFALL A S NOTED BY THE AO ON THIS ISSUE. 13. THE LD. DEPARTMENTAL REPRESENTATIVE, HOWEVER, R ELIED UPON THE ORDER OF THE ASSESSING OFFICER BUT DID NOT CONTROVERT IN RESPECT OF THE FACTS OF THE CASE UNDER CONSIDERATION AND FACTS OF THE ORDER OF I.T.A.T., A HMEDABAD BENCH IN THE CASE OF AHMEDABAD URBAN DEVELOPMENT AUTHORITY (SUPRA). SIN CE THE FACTS RELATED TO THE ISSUE TO BE DECIDED ARE IDENTICAL, BY RESPECTFULLY FOLLOWING THE ABOVE ORDER OF I.T.A.T., AHMEDABAD BENCH AND IN THE LIGHT OF THE F ACTS, WE FIND THAT THE ASSESSEE ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 18 WAS RIGHTLY DEDUCTING TAX UNDER SECTION 194C OF THE ACT IN RESPECT OF PAYMENT TO LMV AND BUSES. THE ASSESSING OFFICER IS DIRECTED A CCORDINGLY. THUS, THE APPEALS OF THE ASSESSEE FOR A.YS. 2009-10 & 2008-09 ARE ALL OWED AND THE APPEALS OF THE REVENUE FOR F.YS. 2007-08 & 2008-09 ARE DISMISSED. 14. SUMMARY OF RESULT:- 1. ITA NOS.14 & 15/AGR/2010 FOR A.YS. 2009-10 & 200 8-09 FILED BY THE ASSESSEE ARE ALLOWED. 2. ITA NOS.41 & 42/AGR/2010 FOR F.YS. 2008-09 & 200 7-08 FILED BY THE REVENUE ARE DISMISSED. 3. ITA NOS.98 & 99/AGR/2010 FOR A.YS. 2009-10 & 200 8-09 FILED BY THE ASSESSEE ARE ALLOWED. 4. ITA NOS.103 & 104/AGR/2010 FOR F.YS. 2007-08 & 2 008-09 FILED BY THE REVENUE ARE DISMISSED (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* ITA NOS.14, 15, 41, 42, 98, 99,103 & 104/AGR/2010 A.YS. 2009-10 & 2008-09 . 19 COPY OF THE ORDER FORWARDED TO: APPELLANT RESPONDENT CIT CONCERNED CIT (APPEALS) CONCERNED D.R., ITAT AGRA BENCH, AGRA GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY