TMI Blog2016 (4) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... hire charges - Decided against revenue - ITA No. 1457/PN/2013 - - - Dated:- 9-3-2016 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM For The Assessee : Smt. Deepa Khare For The Revenue : Dr. Subhash K.R. ORDER PER VIKAS AWASTHY, JM : The appeal has been filed by the Revenue against the order of Commissioner of Income Tax (Appeals)-V, Pune dated 10-04-2013 passed u/s. 201(1) and 201(1A) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) for the assessment year 2009-10. 2. The only issue raised by the Revenue in appeal is : 1. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that the provisions of section 194I are not applicable in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. In support of his findings, the Commissioner of Income Tax (Appeals) placed reliance on the judgment of Hon'ble Gujarat High Court in the case of CIT Vs. Swayam Shipping Services (P) Ltd. in Income Tax Appeal No. 1037 of 2009 reported as 339 ITR 647 (Guj.). Against the findings of Commissioner of Income Tax (Appeals), the Revenue is in appeal before the Tribunal. 4. Dr. Subhash K.R. representing the Department submitted that the Commissioner of Income Tax (Appeals) has erred in coming to the conclusion that on the payments made for hiring of excavation machinery and cranes the tax at source has been rightly deducted under the provisions of section 194C. The facts on record show that the assessee has been making payments for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. We have heard the submissions made by the representatives of rival sides and have perused the orders of the authorities below. The only issue in the appeal is; Whether on the payments made for hiring of machinery, cranes etc., the tax at source is to be deducted under the provisions of section 194C or section 194I of the Act. 7. The assessee had hired machinery, JCB, Poclain etc. for excavation. The fact whether the assessee has taken the machinery/cranes etc. on rent or contract can be ascertained from the terms and conditions of the agreement between the parties. Undisputedly, in the preset case there is no such written agreement. Therefore, whether the payments made by the assessee for using the machinery are in the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payments made for hiring of cranes, the provisions of section 194C would apply. In the said case contractor was to bear the expenses for petrol, operator day to day repair and maintenance of the cranes. The relevant extract of the Tribunal order is reproduced here-in-under: 18. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions relied on by the learned counsel for the assessee. The only dispute to be decided in the instant ground is regarding the applicability of provisions of section 194C or 194I on account of payments for hiring of cranes for loading and unloading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduct income-tax thereon at the rate specified thereunder. Thus, section 194C of the Act makes provision for deduction of tax at source in respect of payments made to contractors whereas section 194-I makes provision for deduction of tax at source in respect of income by way of rent. Examining the facts of the present case in the light of the aforesaid statutory provisions, from the findings of fact recorded by the Commissioner (Appeals) it is apparent that the assessee has not taken the dumpers on hire/rent from the parties in question. The assessee has given contracts to the said parties for the transportation of goods and has not taken machineries and equipment on rent. In the circumstances, the Commissioner (Appeals) was ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f contracts between the assessee and the transporters and as such the assessee was required to deduct tax at source at the rate prescribed under that section. The Commissioner (Appeals) was, therefore, justified in holding that the assessee was not an assessee in default within the meaning of the expression as contemplated under section 201 of the Act and, consequently, the Tribunal was justified in confirming the order passed by the Commissioner (Appeals) . 18.2 Since the facts in the instant case are identical to the cases decided by Hon ble Gujarat High Court, therefore, respectfully following the same we hold that provisions of section 194C are only applicable for such payments and not provisions of section 194I. The order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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