TMI Blog2015 (3) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007 and till the time the registration was completed, Assessee could not have been said to have put to use the trucks for the purpose of business - Held that:- A commercial vehicle like a truck can be said to be ready for us only after the body fitting has been done on the chassis of the truck and thereafter the vehicle is registered with the prescribed Motor Vehicle Authorities. Before us, ld. A.R. has not placed any material on record to demonstrate that all the trucks were ready for use in all. aspects or even had obtained temporary registration of the vehicles or used for the business of the Assessee. The reliance placed by the assessee on the decisions are distinguishable on facts and are therefore not applicable to the present case. We therefore find that A.O was justified in denying the depreciation of ₹ 10,53,800/- on the 5 trucks. With respect to Truck No. 5056 it is Assessee’s submission that it had purchased the second hand truck on 07.04.2006 and the evidence of transfer of ownership in favour of Assessee was also furnished to the A.O. On the other hand we find that that A.O while disallowing the claim of depreciation of ₹ 1,05,000/- on the aforesaid tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the facts of the case in adding a sum of ₹ 4,99,03,878/- u/s 40 (a) (ia). The appellant submits that such addition cannot be sustained as the case of the assessee does not fall u/s 194 C which is the sine qua non for addition u/s 40 (a) (ia). 2. That the Id. CIT (A) erred in law and on the facts of the case, in sustaining disallowance/addition of ₹ 4,99,03,878/-, even though such sum was never claimed as expense u/s 30-38 of the act. 3. That the Id. CIT (A) erred in sustaining disallowance of ₹ 11,58,800/- on account of depreciation on trucks. 4. That the Id. CIT (A) erred in disallowing ₹ 11,72,036/- on account of difference of income as per income tax return and that as per the TDS certificates. Ground no. 1 2 are with respect to disallowance u/s. 40(a)(ia) of the Act. 4. During the course of assessment proceedings, A.O noticed that Assessee has made payment to the extent of ₹ 4,99,03,878/- to various truck owners towards freight charges of the trucks and had not deducted TDS u/s. 194C of the Act. Assessee was asked to show cause as to why no disallowance u/s. 40(a)(ia) be made to which Assessee interalia submitted that it had done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neither the argument is that any of them owned less than two trucks. Therefore in my view even as per section 194C(2) the appellant is liable to deduct TDS from ₹ 4,99,03,878 because he is an individual contactor making payments to sub-contractors i.e. to the persons who placed their trucks at the disposal of the appellant. I am thus in agreement with the stand taken with the AO (please refer to para 5.3 of the assessment order) that most important part of section 194C is the word carrying out any work which has been interpreted by Hon'ble Supreme Court in the decision in the case of Associated Cement Companies vs. CIT -207 ITR 435(SC) wherein the Hon'ble Supreme Court held that 'any work' occurring in Section 194C means any work and not only a 'work contract'. Here section 194C is applicable to the applicant because he is making payment to sub-contractors for supply of trucks for goods carriage. Another decision cited by the AO Hon'ble Supreme Court in the case of Birla Cement Works 115 Taxman 359(SC) is also applicable in this case. Further the AO's reliance on Board circular No. 681 dated 8.3.1994 clarifying 'transport contracts' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As far as present case is concerned, the relevant assessment year is A.Y. 2007-08 and therefore the amendment made to Section 194C(1)(K) of the Act which has been introduced with effect from 01.06.2007 has no applicability. We further find that a similar view has been taken by the Co-ordinate Bench in the case of Prasant Shah vs. ACIT (supra) where the Co-ordinate Bench has held as under:- + + it is further important to mention that vide an amendment with effect from 1/6/2007 an individual or HUF have also been inducted vide subclause (k) in section 194C(1) of the IT Act. At this juncture, it is worth to hold that as far as the AY in hand is concerned, i.e. AY 2007-08, this latest amendment of section 194C(1)(k) of the Act being introduced with effect from 01/06/2007 has no applicability. We therefore hold that if the Revenue Department had made an endeavour to invoke the provisions of section 40(a)(ia) for the infringement of the provisions of section 194C of the Act by holding that the assessee being an individual got covered by sub-section (1), then according to us, it was an incorrect application of law; 8. The aforesaid decision of Tribunal has been upheld by Hon ble G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r depreciation. He further submitted that the tucks were put to use on trial basis and were included in the block of assets. With respect to depreciation of R. 1,05,000/- on Truck No.5056 he submitted that the claim of depreciation was disallowed as the A.O had noted that the evidence of transfer of ownership was not supplied by the Assessee. Before us, ld. A.R. submitted that Truck No. 5056 was a second hand truck purchased by the Assessee and the evidence of the same was also supplied to the A.O. He therefore submitted Assessee could not be denied depreciation on the ground that transfer was not recorded under the Motor Vehicles Act. He further relied on the decision of Kerala High Court in the case of Nidish Transport Corporation 185 ITR 669 and Dilipsingh Sardarsingh Bagga 201 ITR 995. The ld. D.R. on the other hand supported the order of A.O and ld. CIT(A) and further submitted that the trucks were purchased by the Assessee in March, 2007 and were registered only in April, 2007 and therefore it cannot be said to have been put to use during the financial year ended 31st March, 2007 relevant to the assessment year under consideration and therefore Assessee was not eligible for d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. A.R. has not placed any material on record to demonstrate that all the trucks were ready for use in all aspects or even had obtained temporary registration of the vehicles or used for the business of the Assessee. The reliance placed by the assessee on the decisions are distinguishable on facts and are therefore not applicable to the present case. Before us, Ld. AR had relied on the decision in the case of Anil Bulk Carriers, we find that in that case the fact was that the oil tankers purchased by the Assessee had plied on the road on the last day of accounting year, were Challaned and fined by the Magistrate, though the registration of the vehicle was granted in next year. In such circumstances, the Hon ble High Court has held that since the oil tankers were used in the business on the last day of financial year, the Assessee was entitled to depreciation notwithstanding the fact that the vehicles were registered in the Assessee s name on the first day of next year. Seen in the light of aforesaid decision, in the present no material has been placed to demonstrate that the vehicle was in fact used before the year end and therefore the ratio of the decision relied is not applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certificate and the receipts shown by the Assessee, A.O noticed that there was difference of ₹ 11,72,036/- in the amount reflected to have been paid to the assessee as per the TDS certificates and that shown by the Assessee in the Profit and Loss account. The Assessee was therefore asked to clarify and reconcile the same to which Assessee submitted that the difference was on account of wrong calculation by the parties who had issued the TDS certificates. The submission of the Assessee was not found acceptable to the A.O. and he therefore considered the difference of ₹ 11,72,076/- between the amount reflected in the TDS certificates and as shown by the assessee in the Profit and Loss Account as the income of the Assessee. Aggrieved by the order of A.O., Assessee carried the matter before CIT(A) who confirmed the action of A.O by holding as under:- 6. Ground No. 3 is with respect to disallowance of ₹ 11,72,036 on account of income as per income tax return and that as per TDS certificates. After going through rival submissions the addition is confirmed because even in the written submission the appellant has acknowledged it as calculation mistake and has requested ..... X X X X Extracts X X X X X X X X Extracts X X X X
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