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2015 (10) TMI 386 - ITAT DELHIDisallowance u/s 40(a)(ia) - non deduction of tds on amount paid to LDS Engineers as covered u/s 194C - CIT(A) identified the nature of transaction by considering it as ‘the payment for hiring of machines i.e. dumpers as partaking the character of work’ & proceeded by holding that the deduction of tax at source was required to be made u/s 194C by taking it as ‘work contract’ Held that:- We are at loss to appreciate as to how machinery given on a monthly rental can be construed as ‘work contract’, being a consideration for carriage of goods by any mode of transport, as has been canvassed by the ld. CIT(A). AR has relied on an order passed by the Delhi bench of the tribunal in ACIT Vs Sanjay Kumar (2011 (7) TMI 662 - ITAT, Delhi) in which it has been held that the payment made by the assessee for taking cranes on lease on time basis, did not constitute payment with regard to ‘works contract’ as defined in sec. 194C and hence the assessee was not required to deduct tax at source under this action. No contrary precedent has been brought to our notice by the ld. DR. Thus we hold that the authorities below were not justified in making and sustaining disallowance u/s 40(a)(ia) of the Act in the given circumstances. - Decided in favour of assessee. Depreciation on Earth moving machine - @ 30% allowed by CIT(a) as against 15% allowed by the A.O - Held that:- There is no dispute on the fact that the assessee company used the machines on hire business, on which depreciation @ 30% was claimed. These facts as recorded in the impugned order have not been controverted by the ld. DR. It is patent that when a particular vehicle is used by its owner on hire basis, then the normal rate of depreciation needs to be discarded and substituted with the higher rate of depreciation. We, therefore, uphold the impugned order on this score. - Decided in favour of assessee.
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