TMI Blog2008 (11) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... g out of any work by the truck owners, for which, any payment was made by the assessee. When the assessee entered into a contract for the purpose of taking temporary possession of trucks from the truck owners, it did not amount to the assessee entering into any contract for carrying out any work. Once the contract was not for carrying out any work. as per CIT vs. Poompuhar Shipping Corporation Ltd.[ 2006 (1) TMI 60 - MADRAS HIGH COURT] , the provisions of s. 194C are not attracted. Explanation III to s. 194C explains the expression work as used in ss. 194C(1) and (2) of the Act. Obviously, the Explanation cannot operate beyond the field of the section read with the Explanation. The Explanation would be applicable if the assessee had made any payment for carrying out any work including, as per the Explanation, carriage of goods and passengers by any mode of transport other than by railways. The Explanation cannot apply to a situation not amounting to a contract for carrying out any work as contemplated in s. 194C, and entering into a contract for hiring of trucks is not equivalent to entering into a contract for carrying out any work. Therefore, Expln. III to s. 194C is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the addition rightly made by the AO; that the continuous activity of the assessee, of hiring trucks shows that the trucks were hired by the assessee for the purpose of transporting the goods covered under service contract, liable for deduction of TDS within the meaning of s. 194C of the Act. 6. The learned counsel for the assessee, on the other hand, has submitted supporting the impugned order, that the deletion of the addition made by the AO has rightly been ordered by the learned CIT(A); that the assessee did not enter into any contract between the assessee and the truck owners for carrying goods or passengers; that the payment made was of hiring charges not subject to TDS under s. 194C of the Act; that the hiring charges of transport is different from a transport contract for carriage of goods; and that as such, there being no force therein, the appeal filed by the Department is liable to be dismissed. 7. We have heard the parties and have perused the material on record. The learned CIT(A), while deleting the addition, has observed as follows: "The AO also effected addition of Rs. 17,40,000 on account of hire charges in respect of hiring of trucks. It was the plea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced w.e.f. 1st day of April, 2005 because the relevant clause of the introduction of Finance Bill have made it applicable from 1st of April, 2005. In view of the said provision the other arguments of the appellant that it will not effect the transactions before 21 Sept., 2004 as it got the assent of the Hon'ble President on 21 Sept., 2004 are also rejected." 8. The question here is as to whether the addition made by the AO has rightly been deleted by the learned CIT(A), holding that the provisions of s. 194C of the Act are not attracted. Undisputedly, the transaction herein is taking of trucks on hire by the assessee. As per the AO, Expln. III to s. 194C of the Act is squarely applicable to such a transaction. Expln. III to sub-s. (3)(c) to s. 194C of the Act reads as under: "For the purpose of this section, the expression 'work' shall also include- (a) .......... (b) .......... (c) carriage of goods and passengers by any mode of transport other than by railways." 9. In CIT vs. Poompuhar Shipping Corporation Ltd. (2006) 202 CTR (Mad) 243 : (2006) 282 ITR 3 (Mad), the assessment year involved was 1994-95. Explanation III to s. 194C of the Act was incorporated w.e.f. 1st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Department that the assessee entered into any contract with the truck owners for transportation of goods or passengers from one place to another. Thus, the hiring of trucks for the purpose of using them in the assessee's business would not amount to a contract for carrying out any work, as contemplated in s. 194C of the Act, as held in CIT vs. Poompuhar Shipping Corporation Ltd. 12. For carrying out any work, manpower is the sine qua non and without manpower, it cannot be said that work has been carried out. Under s. 194C of the Act "carrying out any work" is the substance for making a payment relating to such work, liable for deduction tax at source. The provisions of s. 194C are attracted only where any sum is paid for carrying out any work including supply of labour for carrying out any work. In the present case, it is not the case of the Department that the trucks taken on hire by the assessee from the truck owners were supplied by the truck owners to the assessee along with manpower, i.e., drivers and/or conductors. The trucks were undeniably put to use by the personnel of the assessee. Thus, nothing has been brought on record by the Department to the effect that manpower ..... X X X X Extracts X X X X X X X X Extracts X X X X
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