TMI Blog2015 (10) TMI 2785X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to section 44AE (7). On a perusal of section 194C (6) read with Explanation (II) to section 194C, it is crystal clear that the transport contractor is not required to be the owner of goods carriage for applicability of section 194C(6) - At this stage, we may observe here that an amendment has been made vide Finance Act, 2015 in section 194C (6) wherein it is specifically stated that w.e.f. 1.6.2015, the benefit of non deduction of tax on payment made to transport contractors would be applicable only if the transport contractor owns ten or less goods carriages at any time of the previous year and a declaration to this effect is furnished. Legislature has intentionally inserted the ownership condition for claiming the benefit of non deduction of tax which was not existing in the erstwhile section 194C(6) - Assessee (Person responsible) cannot be treated as assessee in default for not deducting tax on the payments made to the Bilaspur District Truck Operators Co-operative Society thus, we do not find any infirmity in the order of CIT(A) and accordingly we uphold the same. The appeal of the Revenue is dismissed. - ITA Nos. 651 & 652/Chd/2015, C.O. Nos. 33 & 34/Chd/2015 (In I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to become eligible for non deduction of tax at source i.e. (i) person must be contractor, and (ii) such persons receives payments during the course of business of plying, hiring or leasing of goods carrier. The Assessing officer has also stated that goods carriers have been explained in Explanation (II) to sub section (7) of section 194C which provides that goods carrier shall have the meaning assigned to it in the Explanation to Sub section (7) to section 44AE. The Assessing officer further observed that the expression goods carriage and heavy goods vehicles shall have the meaning practically assigned to them to of Motor Vehicle Act, 1988. He further observed that explanation to sub section (7) of section 44AE also provides that assessee who is in possession of goods carrier whether taken on hire, purchase or on installment for which the whole or part of amount payable is still due. The Assessing officer took the view that the concerns who is undertaking job of procuring business for its members to transport of products of the company, do not own any goods carriers and as such cannot be termed as contractors. He further held that the assessee is not engaged in the business o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to- --------------- (6) No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum. --------------- Explanation - For the purposes of this section, - ---------------- ` (ii) goods carriage shall have the meaning assigned to it in the Explanation to sub-section (7) of section 44AE; 44AE. Special provision for computing profits and gains of business of plying, hiring or leasing goods carriages. (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an assessee, who owns not more than ten goods carnages at any time during the previous year and who is engaged in the business of plying, hiring or leasing such goods carriages, the income of such business chargeable to tax under the head Profits and gains of business or profession shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich arose from the said agreement and to bear all risks arising therefrom 5.3 It is noteworthy that Explanation--(ii) below section 194C(7) refers to the definition of 'goods carriage', to have the same meaning as in Explanation (a) below sub-section (7) of section 44AE and so the reference is only in context of definition of goods carriage. Explanation-(a) below section 44AE(7) is applicable to section 194C, but Explanation-(b) below section 44AE{7) is applicable only to section 44AE. Therefore, the inference drawn by the Assessing Officer that for the purposes of claiming the benefit of sub-section (6) of section 194C, the appellant is required to satisfy the ownership criteria mentioned in Explanation-(b) below section 44AE(7) is not correct. 5.4 In view of the above, it is held that the Assessing Officer was not right in treating the person responsible as 'assessee in default' for not deducting tax on the payments made to the Society and the demand created u/s 201(1)/ (1A) is accordingly deleted. Grounds of appeal taken by the appellant are allowed. 6. We have heard the rival submissions and have also perused the materials available on record. The Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the benefit of presumptive taxation the assessee should not own more than ten goods carriages. Therefore, the assessee is not required to satisfy the ownership criteria as mentioned in clause (b) of Explanation to section 44AE (7). On a perusal of section 194C (6) read with Explanation (II) to section 194C, it is crystal clear that the transport contractor is not required to be the owner of goods carriage for applicability of section 194C(6) of the Act. At this stage, we may observe here that an amendment has been made vide Finance Act, 2015 in section 194C (6) wherein it is specifically stated that w.e.f. 1.6.2015, the benefit of non deduction of tax on payment made to transport contractors would be applicable only if the transport contractor owns ten or less goods carriages at any time of the previous year and a declaration to this effect is furnished. In our opinion, the Legislature has intentionally inserted the ownership condition for claiming the benefit of non deduction of tax which was not existing in the erstwhile section 194C(6) of the Act. In view of the above discussion, the assessee (Person responsible) cannot be treated as assessee in default for not deducting t ..... 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