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2014 (1) TMI 175 - AT - Income TaxDisallowance u/s.40(a)(ia) of the Act – Effect of Amendment u/s 194C(1) of the Act – Held that:- The payments are in relation to a contractual work - the assessee is an individual and the provision of section 194C(1)(k), including specified individuals/HUFs within the purview of section 194C(1), prescribing the obligation to deduct tax on the contractual payments, is only by Finance Act, 2007, w.e.f. 01.06.2007 - This is not a case of a sub-contract has been made out by the Revenue - The contracts entered into by the assessee with the different car/travel agents, as it appears, are independent contracts for car rental services, being entered into by it in accordance with the needs of its business - the assessee is hiring the cars therefrom on his own account for a cost - As far as the vendors are concerned, they are only providing cars for a hire to the assessee, which could include the services of the driver as well. It cannot be said to be a case of sub-contract – Following Mythri Transport Corporation v. Asst. CIT [2009 (1) TMI 337 - ITAT VISAKHAPATNAM] - prior to its substitution by Finance (No.2) Act, 2009 w.e.f. 01/10/2009, the hiring of vehicles by a contractor for his own use in executing the contracts undertaken by him, is not a case of sub-contract/s, so as to attract the provision of s. 194C(2) - it is not a case of a sub-contract, so as to be visited by the rigor of s. 194C(2) - The provision of section 194C is not applicable to it for the current year - the question of invocation of section 40(a)(ia) of the Act in view of the non-deduction of tax u/s.194C by it does not arise – Decided in favour of Assessee.
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