TMI Blog2011 (4) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of ₹ 803,329/- on account of fuel and petrol, repair and maintenance an depreciation. Assessing Officer disallowed 20% of the said expenditure, which comes to ₹ 1,60,665/- on the ground of personal element. On appeal, the CIT(A) deleted the said disallowance by holding that no such adhoc disallowance can be made in respect of genuine expenditure like conveyance and traveling, fuel and petrol, repairs and maintenance and depreciation of on motor car as the business of the assessee itself is of hiring of cars and even because of urgent needs of the customers, he had to engage other s cars hence, there is no point to presume that there is personal use of such motor car. Aggrieved by the order of the CIT(A), the revenue is in ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer had misplaced the provision of law u/s 194C and he had not properly appreciated the provision of law u/s 194C that such hiring charges were not applicable to the individual of HUF. It was submitted that the assessee was the contractor undertakes the responsibility of providing cars for hire with drivers, fuel and maintenance and whenever there is a shortage of cars to be supplied to the customers on urgent call, assessee had to engage various cars from outside parties when taking such cars on contracts but engaging them for fulfilling the responsibility taken by the assessee. As regards, car parking charges, it was submitted that the assessee being an individual is not covered u/s 194C(1) as there is no contractual payment to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (k) was enacted with effect from 01/06/2007 by the Finance Act, 2007 and accordingly the provision of law under sub-clause (k) is applicable in AY 2008-09 and not in AY 2007-08. Obviously, learned Assessing Off icer had grossly erred in law as well as on fact by referring or applying the provision of law u/s 194C(1)(k). The identical issue has been decided by the Hon ble ITAT, Vishakhapatnam Bench in the case of Mythri Transport Corporation Vs. ACIT [2009] 124 TTJ (Visakha) 970, in favour of the appellant. The issue under this referred to case is that of applicabil ity of provision of section 40(a)( ia) with reference to section 194C in respect of payment made to persons from whom vehicles were hired and in this case it was to be decided as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel for the assessee has relied on the order of CIT(A). 10. We have heard the learned representatives of the parties and perused the record as well as gone through the orders of the authorities below. The Assessing Officer disallowed the vehicle hiring charges and parking charges of ₹ 1,66,06,873/- u/s 40(a)(ia) of the Act on the ground that the assessee failed to deduct TDS for while making payments. The contention of the learned counsel is that the assessee is an individual hence by virtue of sub-section (1) of section 194C, assessee was not required to make such TDS. The CIT(A) gave a categorical finding that it is an undisputed fact that the appellant is an individual and the provision of law u/s 194C(1)(k) was enac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sub-contractor. The assessee has also claimed before the tax authorities that the responsibility in the whole process lies with it only. Though the passing of liability is not the only criteria to decide about the existence of sub-contract, yet this contention of the assessee read with the liability clauses of the work order supports its submission that the individual vehicle owners are simple hirers of the vehicles. As per the provisions of s. 194C(2), the sub-contractor should carry out the whole or any part of the work undertaken by the assessee. The dictionary meaning of the words carry out is to carry into practice ; to execute ; to accomplish . It signifies a positive involvement in the execution of the whole or any part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the work undertaken by the assessee, it cannot be said that the payments made for hiring of vehicles fell in the category of payments towards sub-contracts and, therefore, assessee was not liable to deduct tax at source as per the provisions of s. 194C(2) from the payments made to the lorry owners and consequently, provisions of s. 40(a)(ia) were not applicable to such payments. 12. As regards car parking charges, Assessing Officer has not brought on record any evidence to show that there was a contractual payment or any sort of payment which was covered u/s 40(a) of the Act. In view of the specific findings given by the ITAT in the case of Mytrhi Transport Corporation (supra), we respectfully follow the decision of the ITAT in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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