TMI Blog2012 (11) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... tween the appellant and M/s. HPCL contained specifically provides that the appellant shall not sub-let any work entrusted to him & the appellant is assigned the job of transportation and it had performed the job of transportation by itself - The Revenue has not brought out any material to establish that the owner of the vehicles have performed any work other than hiring their vehicles to the appellant - in favour of assessee. - ITA No.351/Ahd/2009 & 255/Ahd/2010 - - - Dated:- 5-10-2012 - SHRI MUKUL KUMAR SHRAWAT, AND SHRI A. MOHAN ALANKAMONY, JJ. Appellant by Shri Tushar P. Hemani, AR Respondent by Shri T. Sankar, Sr. DR O R D E R PER A. MOHAN ALANKAMONY: These two appeals are preferred by the same assessee aggrieved by two different orders of the learned CIT, Valsad in appeal No. CIT(A)/VLS/220/07-08 dated 05-09-2008 and No.CIT(A)/VLS/297/08-09 dated 05-09-2009 passed u/s 250 read with section 143(3) of the Act for the assessment years 2005-06 and 2006-07 respectively. 2. The issues and facts involved in both the assessment years are identical and similar except the figures. Hence, for the sake of convenience both the appeals are heard together and dispos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1,09,03,430/- as against returned income of the assessee of Rs.3,08,610/- thereby making an addition of Rs.1,05,83,55/- u/s 40(a) (ia) of the Act. 5. Though the assessee has raised five elaborate grounds as reproduced above, the crux of the issue involved is relating to learned CIT(A) s confirmation of addition of Rs.1,05,83,555/- made by the learned AO by invoking provisions of section 40(a) (ia) of the Act. During the year under consideration, the assessee firm had entered into transport contract with Hiindustan Petroleum Corporation Ltd. (HPCL) for transportation of packed LPG Gas cylinders from HPCL LPG Plant at Panoli, Ankleshwar to the designated destinations in consideration for rent/carting charges as per rates prescribed in the Schedule attached with the LPG Cylinder Transportation Contract Agreement. During the course of assessment proceedings, on examination of the profit loss account of the assessee, the learned AO observed that the assessee has claimed Rs.1,05,83,555/- as carting expenses on which no tax was deducted at source in compliance with Sec. 194C of the Act. The learned AO afforded opportunity of being heard to the assessee. Before the learned AO, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated 30-03-2012 of ITAT Ahmedabad D Bench. 6. The learned DR on the other hand, relied on the order of the learned CIT(A). 7. We have heard the rival submissions and carefully perused the material on record. From the facts of the case it is apparent that the assessee was hiring trucks for the purpose of his business of providing transportation services to his client M/s. HPCL. Section 194 C of the Act makes it clear that TDS is deductible only in the case when the recipient contractors renders the work of carriage of goods or passengers by any mode of transport other than railways. In the case before us, it is evident that the assessee had only hired out the vehicles and rendered the services of transportation of goods i.e. LPG cylinders by itself at its own risk and reward. At this juncture we may peep into the decision of the Hon ble Madras High Court in the case of CIT Vs Poompuhar Shipping Corporation Ltd. [2006] 282 ITR 3 (Mad). The gist of the aforesaid decision is reproduced herein under: Under section 194C of the Income-tax Act, 1961, the tax is to be deducted when a contact is entered into for carrying out any work in pursuance of a contract between the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the limited function of providing the vehicles along with staff to the appellant for hire charges. The movements of the vehicles with the goods are at the command of the appellant. The appellant also undertakes the risk involved in the work of transportation it renders with the help of the hired vehicles. All these facts can be clearly established in the present case before us from the contract executed between the appellant and M/s. HPCL contained in page No.2 to 27 of the paper book. This contract in Para 9 also specifically provides that the appellant shall not sub-let any work entrusted to him. Further, relevant ingredients in the contract to establish that the appellant is assigned the job of transportation and it had performed the job of transportation by itself can be summarized as under:- Item No.1 vehicle for transportation:- The appellant is assigned with the work of transportation by M/s. HPCL and it has to provide the details of the vehicles pressed for the operation. The appellant has to transport the cylinders according to the schedule and route stipulated by M/s. HPCL. The appellant has to ensure that the trucks provided for transportation of LPG cylinders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early established that the appellant had performed the work of transportation by itself by hiring of vehicles and without subletting the work and therefore, the provisions of section 194C of the Act is not applicable and accordingly provisions of section 40(a) (ia) of the Act cannot be invoked. The Revenue has not brought out any material to establish that the owner of the vehicles have performed any work other than hiring their vehicles to the appellant. For the above said reasons we allow the appeal of the assessee in its favour and delete the addition of Rs.1,05,83,555/- made by the learned AO which was further confirmed by the learned CIT(A). 9. In the result, the appeal of the assessee is allowed. ITA No.255/Ahd/2010 (Assessee s appeal for AY: 2006-07) 9. This appeal has arisen due to recalling of the order of the Tribunal dated 26-12-2011 in ITA No.255/Ahd/2010 by allowing the Misc. Application No.63/Ahd/2012 vide order dated 01-06-2012. On the earlier occasion the Tribunal had dismissed the appeal for want of prosecution vide order dated 26/12/2011. 10. The assessee has in this appeal has taken seven elaborate grounds, wherein grounds No. 6 and 7 are general in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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