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TMI Blog2012 (7) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... ew that the payment to vehicle hire comes under section 194-I of the Act. Therefore, the assessee was liable to deduct tax @ 10%. The Assessing Officer calculated short deduction and charged interest. The details of calculation are as under :- S.No Name of the Transporter Amount TDS should be deducted TDS deducted Short deduction Interest 1. Ghamandilal Agrawal 1866628 211489 42299 169190 16919 2. Secular Bus Service 1354360 153449 30693 122756 12276 3. Sree Radha Krishna Travel & Tour 1518968 172100 37596 134504 13450 4. Surendra Singh/Hathras 920690 94831 20688 74143 7414 5. Tilak Raj Bedi 828930 85380 18784 66596 6660 6. Viveka Chandola 333725 34374 6876 27498 2750 7. Secular Travels 1851010 209719 41944 167775 16778 TOTAL 8674311 961342 198880 762462 76247 S.No. Name of the Transporter Amount TDS should be deducted TDS deducted Short deduction 1. Secular Bus Service 1005960 113975 22797 91178 2. Sree Radha Krishna Travel & Tour 2375281 269119 53825 215294 3. Surendra Singh/Hathras 907020 93423 20555 72868 4. Tilak Raj Bedi 534840 55089 12122 42967 5. Vivekchandola 216 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid decisions. The issue before us is as to whether the assessee company was required to deduct tax at source in terms of provisions of sec.194C or u/s sec.194-I of the Act while making payments to the carrier for transportation of petroleum products in accordance with agreement, sample copy of which is placed at pg. 59 to 72 of the paper book. The relevant provisions of sec. 194C, stipulating deduction of tax at source from payments to contractors fall under Part B of the chapter-XVII of the Act. In terms of these provisions, any person responsible for paying any sum to any resident for carrying out any work including supply of labour for carrying out any work in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of cheque or draft or any other mode, whichever is earlier, deduct an amount equal to the percentage specified thereunder of such sum as income tax. The term 'work' defined in clause (iv) of the explanation to the sec. 194C of the Act includes in sub-clause(c) carriage of goods or passengers by any mode of transport other tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portation charges from the carrier. The assessee company, in terms clause 6 of the agreement, is required to pay for the transportation work in accordance with stipulated rates on per KL per KM basis. Inter alia, it is stipulated that no idle charges would be payable. In terms of clause 8, the carrier is responsible for loading and discharge and in the event of shortage, the carrier is made responsible. After considering various clauses of the sample agreement, we are of the opinion that the said agreement is essentially for transportation of bulk petroleum products and not for hiring of tank trucks. We find that the Hon'ble Gauhati High Court in their decision dated 27.2.2009 in CR3997/1998 in the context of deduction of tax u/s 27(a) of the Assam General Sales Tax Act, 1993, after analyzing the terms of a similar agreement in the case of the assessee observed that the said agreement obliged the contractor to operate the vehicles for the purpose of carrying petroleum and petroleum products, as per the directions of the assessee company, from one place to another. If the vehicle remained off the road and, consequent thereupon, the assessee company sustained any loss, the contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the evidence on record has found that the assessee had given sub-contracts of transportation of goods from one place to another. To prove the nature of contracts, the assessee had produced various bills issued by such; subcontractors to show that, the contracts were mainly carried out for shifting of goods from one place to another. The Commissioner (Appeals) also found that the charges were collected by subcontractors on the basis of the quantity* of goods transported and the number of trips carried out; the assessee had not acquired dumpers on rent or lease; and that the possession and control of vehicles was with the sub-contractors, who only provided services of shifting of goods from one place to another place. It was noted that evidence in support of above was submitted to the Assessing Officer during assessment proceedings. In the background of the aforesaid findings of fact recorded by him, the Commissioner (Appeals) was of the view that when the. transportation, contract was in the nature of shifting of goods from one place to another, such contracts would be covered as works contracts and provisions of section 194C would be applicable, According to the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quipments. Section 194-I of the Act makes provision of deduction of tax at source where any person who is responsible for paying to a resident any income by way of rent where as section 194C of the Act makes provision for deduction of tax at source where any person is responsible for paying any sum to any resident for carrying out any work including supply of labour for carrying out any work in pursuance of a contract between the contractor and a specified person. In the facts of the present case, there is nothing to indicate that the assessee has taken trailers/cranes on rent so as to attract the provisions of section 194-I of the Act. The assessee had given sub-contracts for transportation of goods. In the circumstances, the said transactions would fall within the purview of section 194C of the Act as the assessee was responsible for paying the amount in question for carrying out work in pursuance of contracts between the assessee and the transporters and as such was required to deduct tax at source at the rate prescribed under the said section. The Commissioner (Appeals) was, therefore, justified in holding that the assessee was not an assessee in default within the meaning of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. 10. In the light of consistent view taken in the aforesaid decisions and considering the various clauses in the aforesaid Bulk Petroleum Products Road Transport agreement, we have no hesitation in upholding the findings of Id. CIT(A) in concluding that the arrangement for transportation of petroleum products was essentially a contract for transportation of goods and not an arrangement of hiring of vehicles. In view thereof, tax is required to be deducted at source from the payments to the carrier in terms of provisions of sec. 194C of the Act and not u/s 194-I of the Act. Therefore, ground nos. 1.1 & 1.2 in these six appeals of the Revenue are dismissed. As a corollary, grounds raised in the six COs become academic and do not survive for our adjudication." 7. Ld. Departmental Representative, however, relied upon the order of the Assessing Officer but he did not dispute that the facts of the case of Delhi Bench and facts of the case under consideration are identical. 8. Since on identical set of facts the issue has been decided by the I.T.A.T., Delhi Bench in assessee's own case vide order dated 16.11.2011, in the light of the facts, we set aside the order of CIT(A) and the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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