TMI Blog2012 (4) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, no one can presume that the contractee has to do any work on behalf of the assessee. The assessee has to make use of the equipment/vehicle made available on payment of hire for his use. Therefore, it is hire of equipment/vehicle simplicitor and Section 194I would be applicable – Decided against the assessee. Applicability of Section 40(a)(ia) on short deduction of tax – Held that:- Since this issue was not considered by the lower authorities. Hence, matter is remitted back to the file of the A.O. for the limited pupose of determining whether short deduction of tax would attract the provisions of section 40(a)(ia) - IT Appeal No. 11(Coch.) of 2011 - - - Dated:- 29-3-2012 - N.R.S. Ganesan, B.R. Baskaran, JJ. ORDER N.R.S. Gane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, even assuming that the assessee has to deduct tax u/s 194-I of the Act, it will not be a case of non deduction. It may be a case of short deduction. Therefore, the provisions of section 40(a)(ia) is not applicable. The ld representative placed his reliance on various case laws. 4. On the contrary, Smt. Vijayaprabha, the ld. DR submitted that the agreement said to be entered into between the assessee and Shri P Bhasi is only for hiring of machinery and not for carrying out any work of contract. Therefore, the provisions of section 194-I would be applicable and the assessee has to deduct tax u/s 194-I of the Act @ 10%. According to the ld. DR, it is a case of use of machinery, plant and equipment and it is not a contract for car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of the agreement read as below: "02. The Parties hereto agree that this Agreement shall be a Composite contract for hire of vehicles to be used for loading, unloading and transport of the products of the Party of the Second Part and the entire Agreement shall be deemed to be an indivisible contract. 03. The control, custody, ownership and possession of all the vehicles under hire shall remain at all times with the Party of the First Part and it is expressly understood by and between the Parties hereto that the Party of the Second Part will have only the right to use the vehicles and there is no transfer of right to use the vehicles. 04. The Party of the first Part shall provide the Drivers, Cleaners and other staff required for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t/vehicle, etc. as per the contract for the fixed hours. The assessee was expected to make payment after use of the vehicles/equipments as per the agreement. Even though the agreement does not disclose anything about the carrying out of work by the contractee, the assessee claims that it is only a contract for carrying out the work. This Tribunal is of the opinion that the agreement clearly shows that the assessee is taking vehicles on hire for use of the same for particular hours for the purpose of using the same in his business activity. The agreement does not require the contractee to do any work at all. Merely because the words "loading unloading" are used in the contract, no one can presume that the contractee has to do any work on b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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