TMI Blog2011 (2) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act and therefore, the assessee was liable to deduct ITDS therefrom under the provisions of section 194C of the Act - The assessee could not point out that the aforesaid payment of Rs. 42,84,497/- included any amount which was lesser than the limit provided in section 194C of the Act on which tax was not deductible as per the provisions of that section - Appeal of the assessee are dismissed Addition of Rs. 49,000/- under section 69 - Assessing Officer added Rs. 49,000/- to the income of the assessee by invoking provisions of section 68 of the Act on the ground that the assessee could not satisfactorily explained the source of Rs. 49,000/- credited in its books of account - The name and address of the creditors who paid the advance amount of Rs. 49,000/- and the date and mode of payment of the said amount the assessee could not produce any material - In absence of any such material or evidence we do not find any good reason to interfere with the order - Appeal of the assessee is dismissed - ITA NO. 2594/AHD/2010 - - - Dated:- 25-2-2011 - BEFORE SHRI MUKUL SHRAWAT, JUDICIAL MEMBER AND SHRI N.S.SAINI, ACCOUNTANT MEMBER Appellant by : Shri Tej Shah. Respondent by: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in possession of the vehicle, hence consideration for using services of hiring of vehicle is not rent within the meaning of section 194-I of the Income tax Act, 1961. Still further it was submitted that hire charges for services does not constitute work and if that had been so then separate provisions for deduction of TDS such as section 194D insurance commission, 194G commission on sale of lottery tickets, 194H commission and brokerage and 194J fees for professional or technical services would not have been provided. 6. The Learned Assessing Officer held that provisions of section 194C provides that ITDS has to be deducted from any sum paid for carrying out "any work" in pursuance to a contract between the contractor and sub-contractor. The Learned Assessing Officer observed that Hon ble Supreme Court in the case of Associated Cement Co. v. CIT (1993) 201 ITR 435(SC) has held that "any work" occurring in section 194C means any work and not only a "work contract". The Learned Assessing Officer further observed that the act was amended to include Explanation III where by certain types of jobs were deemed as work for the purpose of section 194C. As per clause (c) of Explanation I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lasma Research, District Gandhinagar vide Agreement dated 20.1.2006 for providing, operating and maintaining in good condition six buses having 52 or more seat capacity and two mini buses of 25 seats capacity for 14 hours per day to transport staff/official visitors from various destinations to the campus of the Institute and back on the routes and timings to be decided by the Institute. It was explained by the Learned Authorised Representative of the assessee that as all the vehicles were not owned by the appellant it had to hire vehicles to fulfil the contract undertaken. That the payments made to the persons (refer to the table in the preceding para) did not come in the category of sub-contract payments because the entire risk and responsibility of fulfilling the contract with the Institute was that of the appellant and not of the parties to whom payments were made. It was argued by the Learned Authorised Representative of the assessee that the appellant received only commission income because from the Payment received from the Institute, it paid the charges to other persons for supplying the vehicles. Another line of argument taken during the course of appellate proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is not applicable because there involvement of other lorry owners in carrying out the work undertaken by the appellant was not found, (please refer to the head notes of the decision) but here the appellant is not disputing the fact that they were involved. The point of the appellant is that because the risk and responsibility was its, it was not required to deduct TDS from payments made to the persons from whom buses etc., were hired. Hon ble ITAT Hyderabad Bench decision cited in the case of Teja Construction is not applicable because in that case the assessee was not found maintaining any books of account, the Learned Assessing Officer rejected the books of account and estimated certain percentage of the gross receipts. And also disallowed certain payments under section 40(a)(ia). Hon ble ITAT held that as the books of account of the assessee had been rejected, it could not be punished by invoking section 40(a)(ia) "for a same offence on double occasions." In view of the aforesaid discussion I am of the view that the payments to the seven persons totalling to Rs. 42,84,497 fall under the category of sub-contract payments clearly attracting the provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve necessary registration. The assessee was not having sufficient vehicles of his own for providing the above contracted service. Therefore, the assessee obtained services of others to complete the assignment. The payments made to such vehicle owners were debited in Profit and loss account under the head hire charges totalling to Rs. 42,84,497/-. The assessee did not deduct any ITDS from the payment made to the vehicle owners. The Learned Assessing Officer was of the view that the assessee was liable to deduct tax out of the aforesaid payment of Rs. 42,84,497/- under section 194C of the Act and therefore, disallowed the expenditure of Rs. 42,84,497/- by invoking provisions of section 40(a)(ia) of the Act. On appeal, Learned Commissioner of Income Tax (Appeals) confirmed the action of the Learned Assessing Officer. 11. Before us, the first argument of the Learned Authorised Representative of the assessee was that the payments made to other vehicle owners were deductible under section. 28(i) because of overriding title and as no deduction was claimed in respect of aforesaid payment under sections 30 to 38 of the Act therefore, no disallowance under section 40(a)(ia) can be made. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icles at the disposal of the assessee and they have not carried out any work. The assessee also heavily relied upon the decision of Vishakhapatanam Bench of the Tribunal in the case of Mythri Transport Corporation v. ACIT (2010) 1 ITR 290. 14. We find that work for the purposes of section 194C has been defined as under :- "Explanation III. For the purposes of this section, the expression "work" shall also include- (a) advertising; (b) Broadcasting and telecasting including production of programmes for such broadcasting or telecasting; (c) carriage of goods and passengers by any mode of transport other than by railways ; (d) catering." 15. Thus, it is observed that providing of services of carrying of passengers by vehicles is deemed as work within the meaning of section 194C of the Act. Further, it is observed that the assessee has admitted that the vehicles were driven by the drivers employed by the vehicle owners. Thus, it implies that the passengers were transported by the drivers and vehicles of the vehicle owners and in consideration of that the vehicles owners were paid by the assessee. In our considered view the above payment clearly falls within the scope of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 194C of the Act on which tax was not deductible as per the provisions of that section. We therefore find that the lower authorities were justified in disallowing sum of Rs. 42,84,497/- under section 40(a)(ia) of the Act for non-deduction of tax as per the provisions of section 194C of the Act. We therefore, do not find any good and justifiable reason to interfere with the order of the Learned Commissioner of Income Tax (Appeals) which is confirmed and the grounds of appeal of the assessee are dismissed. 16. Ground No. 4 of the appeal reads as under:- The Learned Commissioner of Income Tax (Appeals) erred in law and on facts of the case in confirming addition of Rs. 49,000/- under section 69 of the Act. 17. The brief facts of the case are that the Learned Assessing Officer found that the assessee has credited Rs. 49,000/- and debited at the same time Rs. 83,000/- in the books of account. On query by the Learned Assessing Officer the assessee explained that the amount was receipt for hiring of vehicle and that such amount did not bear the name of the person and therefore it is credited to suspense account. It was also submitted that the accountant had committed a mi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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