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TMI Blog2015 (7) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition of Rs. 3,49,793/- on account of short deduction and Rs. 1,46,913/- on account of interest thereon and in directing that provisions contained in section 194C is applicable on the payment made by assessee for hiring of buses, ignoring the fact of the case that the deductor company is liable to deduct the tax u/s 194 I at the rate of 10% for hiring of buses in view of amendment made u/s 194 I w.e.f. 01-06-2007. "2. The CIT(A) has erred in law and on facts in deleting the addition of Rs. 3,49,793/- on account of short deduction and Rs. 1,46,913/- on account of interest thereon without appreciating the fact that the hired vehicles were covered under the definition of plant and machinery as per provisions of section 43(3) and accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in detail, which is not convincing as the clauses(a),(b) & (c) of section 1941 of the Income Tax Act,1961 has been substituted for clauses (a) &(b) by the Finance Act, 2007 w.e.f. 1-6-2007 as under:- (a) Ten per cent for the use of any machinery or plant or equipment; Further as per section 43(3) of the Income tax Act, the plant includes vehicles, the section reads as under:- Section 43 of the Income Tax Act. (3) "Plant" includes ships, vehicles, books, used for the purpose of the business or profession [but does not include tea bushes or livestock] (l)' [or buildings or furniture and fittings]. As the section 1941 has been substituted by the Finance Act, 2007 after the date of insertion i.e. 1.7.1995 of work in Explanation - .HI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges TDS u/s 194C @ 2.2666% TDS u/s 194-I 10.3% Short Deduction u/s 194-I Defaults in months w.e.f. Oct. 2007 till date Interest u/s 201(1A) @ 1% Total Amount due 4435116 145820 662817 516997 30 155099 672096 FY Short deduction u/s 194I Interest on hiring charges Total amount payable 2007-08 349793 146913 496706 2008-09 516997 155099 672096 Total 866790 302012 1168802 5. Ld. CIT(A) held that the payments made to the transport service provider fall within the ambit of the provision of section 194C of the Act and provisions of section 194-I are not attracted for the following reasons: (a) The agreements/ contracts entered by the assessee with the transport service providers were primarily ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, which is an essential ingredient of hiring. The assessee had no interest i.e. as a lessee or sub-lessee or tenant in respect of the buses which were being used for transportation of the employees. The existence of landlord/ tenant relation or licensor/licensee is a must before the payment in question can be termed as a rent. Accordingly, we see no reason to interfere in the order of ld. CIT(A) in deleting the addition on account short deduction as also the interest charged u/s 201(1)/201(1A). ITA no. 5268 /Del/2013 - AY 2009-10 (Revenue's appeal): 7. Following grounds are raised: "1. The CIT(A) has erred in law and on facts in deleting the addition of Rs. 5,16,997/- on account of short deduction and Rs. 1,55,099/- on account of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thousand for hundred forty three only) levied under section 201(1A) of the Income Tax Act 1961, by the Ld. Assessing Officer on a/c of shortfall due to alleged non deduction of TDS on average rate under section 192(1) from payment of salary." 10. The AO required the assessee to explain as to why the tax had not been deducted from salary paid to employees on average rate of tax in term of section 192(1). The assessee submitted following reply: "Regarding average rate of TDS u/s 192(1) of the Act in respect of salary, we would like to inform you that we are deducting tax at source (TDS) as per the Act on the basis of the earnings available in a particular month. The total earnings vary due to various payments being made in between during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax (Appeals)- Noida, erred in confirming the interest for Rs. 36,399/- (Rupees forty six thousand three hundred ninety nine only) levied under section 201(1A) of the Income Tax Act 1961, by the Ld. Assessing Officer on a/c of shortfall due to alleged non deduction of TDS on average rate under section 192(1) from payment of salary." 15. There being no change in facts for the assessment year in question, therefore, for the reasons given by us in assessee's appeal for AY 2008-09, we restore the matter to the file of AO to provide opportunity to assessee to substantiate its claim for adopting the average rate for TDS. 16. In the result, revenue's appeals are dismissed and the assessee's appeals are allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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