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2016 (11) TMI 1309 - ITAT KOLKATATDS u/s 194C - non deduction of tds on payment towards hire charges - disallowance u/s 40(a)(ia) - Held that:- As from amended definition of rent for the purpose of Sec.194I that payment for use of machinery, plant or equipment was considered as “rent” for the purpose of Sec.194I only w.e.f. 13.7.2006. Prior to such amendment any payment of rent for use of machinery, plant or equipment was not considered as “Rent” for the purpose of Sec.194I. The payment of rent for use of any plant, machinery or equipment cannot fall within the ambit of Sec.194C also as it does not fall within the definition of the term “Work” as laid down in Sec.194C of the Act. In the light of the aforesaid statutory provision we are of the view that the disallowance u/s 40(a)(ia) of the Act was rightly deleted by CIT(A) as the payment towards hire charges do not require deduction of tax at source at the relevant point of time when it was paid or credited to the account of the payee. With regard to the argument of the ld. DR that the payment in question, if it is a composite payment for carrying out work as well as hiring of machinery, then the provision of section 194C of the Act would be attracted, we are of the view that it is neither the case made out by the AO nor the case made out in the grounds of appeal before the Tribunal. Nevertheless a perusal of the relevant bills evidencing the payment of hiring charges shows that these were payments made independently of any contract for carrying out work and was hiring simpliciter. There is no material on record to show that the payment in question was part of a composite payment for carrying out a work as a part of which machinery was also hired. We are therefore of the view that the provision of section 194C of the Act are not attracted.- Decided against revenue.
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