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TMI Blog2017 (5) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to as "Tribunal") in I.T.A. No.477/Lkw/2011 relating to Assessment Year 2008-09. It was admitted on the following substantial Question of Law as under :- (ii) "Whether the Income Tax Appellate Authority was justified in holding that the expenses incurred by the Assessee amounting to Rs. 2,31,11,513/- under head "Payment made of lorry hire charges' is not covered under Section 40(a)(ia) of the Income Tax Act, 1961 as the provisions of Section 194-C of the Income Tax Act, 1961 are not found applicable?" 3. The Assessing Officer (hereinafter referred to as "A.O.") vide order dated 30.12.2010 made addition by observing that Section 194-C is applicable in the case in hand on the ground that the Assessee is a Transporter and not Trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e copies of various challans pertaining to the parties enumerated by the Assessing Officer in the assessment order. I find that the Assessing Officer has not correctly appreciated the facts of the case. The list of parties attracting the provisions of Section 194C of the Income Tax Act, 1961 enumerated in the assessment order, consists of the names of the parties like "Direct","NO", "Shark Roadways Pvt. Ltd." (Appellant) and "AF" etc. It was explained to me that the parties mentioned by the AO as "Direct" and "AF" are those where the transporter was arranged directly from the market. The party mentioned by the AO as "NO" is that in respect of which no name was mentioned in the challans. The party mentioned by the AO as "Shark Roadways Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t company, computable under Section 28 of the Income Tax Act, 1961. The main issue for adjudication is whether; the payment made by the appellant to such individual truck owners/drivers without any contract is liable for deduction of TDS as envisaged in section 194C of the Income Tax Act, 1961. 7(3)(iii) Section 194C of the Income Tax Act, 1961 applies to any payment made to a contractor for carrying out any work in pursuance of a contract between the contractor and a specified person. The "contract" also includes "sub contract". For application of the provision of Section 194C of the Income Tax Act, 1961, on the appellant, it has to be seen whether, the appellant has entered into any "contract" or "sub contract" with the individual truc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or a contract with the appellant to undertake all the risks and responsibility for carrying out the contracted work. In absence of any evidence to prove the contentions of the AO on which the addition is based, even if, there is a regular pattern and continuous transportation, it cannot be said that these individual truck owners/drivers of transporters are contractors or sub contractor of the appellant company. The payment made to such transporters hired by the appellant are not in the nature of contract or sub contract within the meaning of Section 194C of the Income Tax Act, 1961. ................................ 7(3)(vii) Further, I agree with the submissions of the appellant that the hire charges paid by the appellant to the vario ..... X X X X Extracts X X X X X X X X Extracts X X X X
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