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TMI Blog2013 (12) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The ld. Commissioner of Income-tax (Appeals)-XV, Ahmedabad has erred in law and on facts in deleting the addition of Rs. 28,35,053/- made on account of hiring charges u/s. 40(a)(ia) of the Act. 2. The ld. Commissioner of Income-tax (Appeals)-XV, Ahmedabad has erred in law and on facts in deleting the disallowance of Rs. 10,10,258/- made on account of interest payment to private finance Company. 3. The ld. Commissioner of Income-Tax(Appeals)-XV, Ahmedabad has erred in law and on facts in holding that the addition under provisions of Section 40(a)(ia) of the Act, would be attracted only in respect of the payable amount of expenditure as on 31st March of the relevant previous year. 4. The ld. Commissioner of Income-Tax(Appeals)-XV, Ahmedabad has erred in law on facts deleting the disallowance made on account of expenses not proved during the Remand proceeding such as Office expenses of Rs. 21,640, Service Tax of Rs. 66,873/- and Telephone expenses of Rs. 32,360/- without any specific finding for such allowance. Ground no. 1 is with respect to addition of Rs. 28,35,053/- on account of hiring charges 4. During th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onditions are on appellant. There is no assignment of such work contract to any of such taxi/motor owner. It is only as and when in the case of eventuality of break-down of any appellant's vehicles, non-availability of extra vehicle, the appellant hire the vehicle from open market as per the suitability of his work contract. The appellant hire such vehicles in a discrete manner and not on a regular basis. The type of vehicle, period etc. differ from time to time as per the need of appellant on an urgent situation and accordingly payment for such hiring is made. There is no fixed hire charge. The appellant on these facts relied on various case laws as already discussed where it has been held that in such type of casual and non-recurring hiring of vehicle to complete a contract cannot be taken as sub-contract. I am inclined to accept the contention of the appellant that in the facts and circumstances of his case, payment of hiring charges to various motor car /vehicle owners or parties for occasional engagement in pursuant to complete his contract cannot be held as sub-contract and therefore the provisions for deduction of tax u/s.194C(2) is not applicable. The crucial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e work contract as per the terms and conditions and his own vehicles were not available, it had hired the vehicles. It was further submitted that the risk and responsibility to fulfill such work contract of PSU's was on the Assessee. The vehicles were hired by the Assessee only when required and there was no fixed hiring charges. He further submitted that rates paid to the taxi operators/owners varied depending upon the prevailing market conditions and Assessee had not entered into any contract either written or oral with the persons from whom the vehicles were taken by Assessee. It was further submitted that the Assessee never passed its responsibility as a contractor to the taxi owner/operator and in case of any breach of terms and conditions, the Assessee was only responsible--- He further placed reliance on the decision in the case of Kavita Chug vs. ITO (2011) 44 SOT 95 (Kolkata), decision of Bombay Tribunal in the case of Bhail Bulk Carriers vs. ITO ITA No. 3536/Mum/2011 and the decision of Ahmedabad Tribunal in the case of Shree Dhain Auto Transport Corporation IT(SS) No. 124/Ahd/2013 order dated 19.07.2013. He thus supported the order of CIT(A). 8. We have heard the rival ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest of Rs. 10,10,258/- to private finance companies without deduction of TDS u/s. 194A of the Act. The appellant contended that it is true that no deduction of TDS was made from such interest payment to Pvt. Companies like Kotak Mahindra Prime Ltd., G MAC Financial Services, TML Financial Services Ltd. and to two banks i.e. ICICI Bank and HDFC Bank because the appellant was in need of fund and the terms and conditions of such finance dictated the appellant. It was further contended that due to following of post dated cheque procedure by all these companies, nothing out of such interest payment remained payable as on 31.3.2008. It was also contended that interest payment to bank i.e. ICICI Bank as well as HDFC bank does not require the deduction of TDS as per the provisions. The appellant submitted detail in the form or repayment schedule from HDFC bank (For Scorpio GJ-1-AZ-9256) and ICICI bank (For vehicle No.3488). I am inclined to accept the contention of the appellant that as far as interest payment to Bank viz. ICICI bank and HDFC bank are concerned, provisions of section 194A of the Act are not applicable hence the interest paid to such bank is allowable and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra) has held that the decision of Special Bench in the case of Merilyn shipping (supra) does not lay down correct law. We therefore are of the view that the matter should go back to the file of A.O. so that matter can be decided afresh by him in the light of the aforesaid decision of Hon. Gujarat High Court. We therefore direct accordingly and remit the issue to the file of A.O. We also direct the Assessee to furnish all the required details called for by the A.O. promptly so as to enable the A.O. to decide the issue. In the result, this ground of Revenue is allowed for statistical purposes. Ground No. 4 is with respect to disallowance of various expenses. 14. On verification of the Profit and Loss account, A.O. noticed that Assessee has claimed various expenses aggregating to Rs. 96,76,944/-. The Assessee was asked to produce the supporting evidence in support of the expenses claimed. Due to the non compliance by the Assessee, A.O. disallowed 20% of balance of Rs. 53,99,445/- (96,76,944 less disallowance of car hire charges of Rs. 28,35,053/- and interest disallowance of Rs. 10,10,258/-) and added to the income. Aggrieved by the order of A.O., Assessee carried the matter before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and A.O. failed to identify any single mistake or discrepancy and he made a general remark. It is therefore considering the fact that appellant's books of accounts are audited, the appellant has shownbetter result i.e. gross profit of 49.90% and 23.30% Net profit during previous year against the G.P. of 28.10% and N.P. of 11.61% in immediately preceding previous year, and failure on the part of A.O. to identity any single deficiency or discrepancy, such disallowance at the rate of 20% is not justified. The A.O. is directed to delete the disallowance and addition so made. The appellant gets relief accordingly. 15. Aggrieved by the order of CIT(A), the Revenue is now in appeal before us. 16. Before us, the ld. D.R. submitted that the Assessee was asked to produce the evidence in support of the expenditure and since the Assessee did not produce the same, the A.O. was fully justified was estimating the disallowance. The ld. A.R. on the other hand reiterated the submissions made before CIT(A) and thus supported the order of CIT(A). 17. We have heard the rival submissions and perused the material on record. We find that CIT(A) while deleting the addition has noted that in the Remand R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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