Income Tax Appellate Tribunal - Agra
Indian Oil Corporation Ltd., Mathura vs Assessee on 22 May, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
AGRA BENCH, AGRA
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND
SHRI A.L. GEHLOT, ACCOUNTANT MEMBER
ITA Nos.14 & 15/Agr/2010
Assessment Years : 2009-10 & 2008-09 respectively
M/s Indian Oil Corporation Limited, vs. Income Tax Officer (TDS),
(Marketing Division), Mathura.
Mathura Refinery,
Mathura.
(PAN: AAACI 1681 G).
ITA Nos.41 & 42/Agr/2010
Financial Years : 2008-09 & 2007-08 respectively
Income Tax Officer (TDS), vs. M/s Indian Oil Corporation Limited,
Mathura. (Marketing Division),
Mathura Refinery,
Mathura.
(PAN: AAACI 1681 G).
ITA Nos.98 & 99/Agr/2010
Assessment Years : 2009-10 & 2008-09 respectively
M/s Indian Oil Corporation Limited, vs. Income Tax Officer (TDS),
(Marketing Division), Mathura.
Mathura Refinery,
Mathura.
(PAN: AAACI 1681 G).
ITA Nos.103 & 104/Agr/2010
Financial Years : 2007-08 & 2008-09 respectively
Income Tax Officer (TDS), vs. M/s Indian Oil Corporation Limited,
Mathura. (Marketing Division),
Mathura Refinery,
Mathura.
(PAN: AAACI 1681 G).
(Appellants) (Respondents)
2 ITA Nos.14, 15, 41, 42, 98, 99,103 &
104/Agr/2010
A.Ys. 2009-10 & 2008-09
.
Assessee by : Shri R. Murlidhar, Advocate
Revenue by : Shri Waseem Arshad, Sr. D.R.
Date of Hearing : 22.05.2012
Date of Pronouncement : 25.05.2012
ORDER
PER BENCH:
These are Cross Appeals filed by the assessee and Revenue. ITA Nos.14 & 15/Agr/2010 by the assessee and ITA Nos.41 & 42/Agr/2010 by the Revenue have been filed against common orders dated 15.12.2009 for F.Ys. 2007-08 & 2008-09 and ITA nos.98 & 99/Agr/2010 by the assessee and ITA Nos.103 & 104/Agr/2010 by the Revenue have been field against common orders dated 15.01.2010 for F.Ys.
2007-08 & 2008-09 respectively passed by the learned CIT (Appeals)-I, Agra.
ITA Nos.14 & 15/Agr/2010 by the Assessee and ITA Nos.41 & 42/Agr/2010 by the Revenue
2. The common grounds raised in these appeals pertain to rate of deduction of tax at source on transportation charges paid to the transporter for carriage of goods from one location to another location.
3 ITA Nos.14, 15, 41, 42, 98, 99,103 &104/Agr/2010 A.Ys. 2009-10 & 2008-09 .
3. The brief facts of the issue are that a survey under section 133A of the Income Tax Act, 1961 ('the Act' hereinafter) was conducted on 09.02.2009. The assessee is running Oil Refinery and manufacturing petrol, diesel and other petroleum products. The said products are being transported from the Refinery to the market to various destinations through Truck Tankers etc. During the course of survey, it was found that the assessee had been making payments to the operators from whom it had taken tankers for transportation of oil and oil products from it's refinery to various places and deducting tax at source under section 194C of the Act @ 2%. The Assessing Officer was of the view that after 01.06.2007 the assessee was liable to deduct tax @ 10% as per amended provisions of section 194- I of the Act. The Assessing Officer accordingly created demand of short deduction and charged interest under section 201(1) and 201(1A) read with section 194-I of the Act as under :-
Financial Year Short Deduction Interest Charged Total Demand 2007-08 62470407 9750136 72220533 2008-09 (till Dec '08) 48838751 3183563 52022324 TOTAL 111309158 12933699 124242857
4. The Assessing Officer was of the view that the payments made by the assessee are covered by the definition of rent for plant and plant includes ships, vehicles, books, etc. The CIT(A) after considering the assessee's submissions and 4 ITA Nos.14, 15, 41, 42, 98, 99,103 & 104/Agr/2010 A.Ys. 2009-10 & 2008-09 .
various terms and conditions of agreement between the assessee and the concerned parties, CBDT Circular N.558 dated 28.03.1990 and amended provisions of section 194-I w.e.f. 01.06.2007 found that the assessee has entered into the agreement for taking tank/truck on hire for purpose of transporting its products. The CIT(A) was of the view that the agreement executed are typical agreement which cannot be said that these agreements were purely for taking the tanker trucks on rent nor that the contractors have simply transported the petroleum products and carried out work as stipulated in the agreement. The CIT(A) was of the view that both the sections 194C and 194-I of the Act are applicable. The CIT(A) accordingly held that it will be fair and reasonable if 50% of the payment is held to be liable for TDS under section 194-I and balance 50% under section 194C of the Act.
5. The Revenue is in appeal against the order of the CIT(A) raising a ground that the CIT(A) has erred in directing that only 50% of the payment of hire charges of tanker is liable for TDS under section 194-I of the Act. The CIT(A) ought to have held that the entire payment is subject to TDS under section 194-I of the Act.
The assessee is in appeal raising effective ground that the CIT(A) has erred in holding that 50% of payment is subject to TDS under section 194-I of the Act whereas the assessee was correctly following in making tax deducted at source under section 194C @ 2%.
5 ITA Nos.14, 15, 41, 42, 98, 99,103 &104/Agr/2010 A.Ys. 2009-10 & 2008-09 .
6. We have heard the ld. Representatives of the parties and records perused.
The ld. Authorised Representative after briefing on the terms and conditions of the agreement and facts of the case submitted that the issue is covered n favour of the assessee by various decisions of I.T.A.T. and Hon'ble High Courts including assessee's own case by Delhi Bench in the case of I.T.O., Hardwar vs. Indian Oil Corporation (Marketing Division) in ITA Nos.1829 to 1834/Del/2011 and C.O. Nos.166 to 171/Del/2011 order dated 16th November, 2011. The relevant finding of I.T.A.T. is reproduced as below :-
"We have heard both the parties and gone through the facts of the case as also the aforesaid decisions. The issue before us is as to whether the assessee company was required to deduct tax at source in terms of provisions of sec.194C or u/s sec.194-I of the Act while making payments to the carrier for transportation of petroleum products in accordance with agreement, sample copy of which is placed at pg. 59 to 72 of the paper book. The relevant provisions of sec. 194C, stipulating deduction of tax at source from payments to contractors fall under Part B of the chapter-XVII of the Act. In terms of these provisions, any person responsible for paying any sum to any resident for carrying out any work including supply of labour for carrying out any work in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of cheque or draft or any other mode, whichever is earlier, deduct an amount equal to the percentage specified thereunder of such sum as income tax. The term 'work' defined in clause (iv) of the explanation to the sec. 194C of the Act includes in sub-clause(c) carriage of goods or passengers by any mode of transport other than by railways. On the other provisions of sec. 1941 of the Act falling under the same chapter bear the heading "Rent".
The provisions of the said section stipulate that any person, not being an individual or a Hindu undivided family, who is responsible for 6 ITA Nos.14, 15, 41, 42, 98, 99,103 & 104/Agr/2010 A.Ys. 2009-10 & 2008-09 .
paying to a resident any income by way of rent on account of land, building, furniture or fittings, machinery, plant or equipment, shall at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of cheque or draft or any other mode, whichever is earlier, deduct income tax thereon at the rate specified thereunder.
5.1 Examining the facts of the instant case in the light of the aforesaid statutory provisions and from the undisputed findings of facts recorded by the Id. CIT (Appeals) it is apparent that the arrangement in terms of the aforesaid agreement is of the nature of transport agreement and not one for hiring of vehicles, the agreement being for transportation of petroleum products including Indane gas. The preamble to the agreement itself says that the assessee company for distribution of petroleum products required tank trucks for road transportation of bulk petroleum products from its various storage points to customers/other storage points. As per clause 1 of the agreement, the carrier engaged in the business of operating tank trucks, agreed to provide a stipulated number of tank trucks for the exclusive use of the company. Clause 2 stipulates that each tank truck would be attached to a particular loading/storage point for transportation of bulk petroleum products and the assessee company can assign a particular tank truck to different loading/storage point. In terms of clause 3 of the agreement, the carrier alone is required to provide crew (driver & cleaner) for efficient operations. In other words, in the instant case the tank truck owners not simply confined themselves to the extent of providing vehicles at the disposal of the assessee in lieu of rent but also engaged their drivers in driving such vehicles and thereby in transporting petroleum products from one place to the other. In effect, tank truck remains in possession of the staff of the carrier. In the event tank truck is not made available on any particular day, the assessee company is free to use the services of any other tank truck and recover the difference in transportation charges from the carrier. The assessee company, in terms clause 6 of the agreement, is required to pay for the transportation work in accordance with stipulated rates on per KL per KM basis. Inter alia, it is stipulated that no idle charges would be payable. In terms of clause 8, the carrier is responsible for loading and discharge and in the event of shortage, the carrier is made responsible. After 7 ITA Nos.14, 15, 41, 42, 98, 99,103 & 104/Agr/2010 A.Ys. 2009-10 & 2008-09 .
considering various clauses of the sample agreement, we are of the opinion that the said agreement is essentially for transportation of bulk petroleum products and not for hiring of tank trucks. We find that the Hon'ble Gauhati High Court in their decision dated 27.2.2009 in CR3997/1998 in the context of deduction of tax u/s 27(a) of the Assam General Sales Tax Act, 1993, after analyzing the terms of a similar agreement in the case of the assessee observed that the said agreement obliged the contractor to operate the vehicles for the purpose of carrying petroleum and petroleum products, as per the directions of the assessee company, from one place to another. If the vehicle remained off the road and, consequent thereupon, the assessee company sustained any loss, the contractor was liable to make good the loss. If, in certain circumstances, the contractor was unable to carry the petroleum and/or petroleum products in a particular vehicle, wherein he had undertaken to carry, he could carry the products in 'drums' in 'stake-trucks'. Similarly, the contractor was also liable to make good the loss, which the assessee company might sustain due to short delivery of its products or due to confiscation thereof during the course of carriage. In the light of various terms and conditions of the agreement, the Hon'ble High Court, observed that "54. Thus, when the contract agreement is read clause-by-- clause, it becomes abundantly clear that there is no transfer of the right to use the vehicle involved in the contract agreement and that the contract agreement is merely for carriage of the petroleum and petroleum products and nothing more."
5.2 Thereafter, Hon'ble High Court after considering the decisions in Ahuja Goods Agencies V. State of U.P. reported in (1997) 106 STC 540 and Laxmi Audio Visual V. Asstt. Commissioner of Commercial Taxes, reported in (2001) 124 STC 426 (Kar) concluded as under:
"58. In the case at hand too, the transactions do not amount to transfer of the right to use the goods in as much as the contractor, as a trustee of the petroleum and petroleum products, carries the same in the identified vehicles or in exceptional circumstances, in such a manner as have been agreed to by the parties concerned ......"8 ITA Nos.14, 15, 41, 42, 98, 99,103 &
104/Agr/2010 A.Ys. 2009-10 & 2008-09 .
5.3 In nutshell, the Hon'ble Gauhati Court concluded that the contract was essentially for transportation of petroleum products and not for hiring of trucks/tankers. Following the view taken in this decision, the Id. CIT(A) concluded that provisions of sec. 194C were applicable in the instant case and not the provisions of sec. 1941 of the Act. The Id. DR did not place any material before us in order to controvert the aforesaid finding of facts recorded by the Id. CIT(A) nor brought to our notice any contrary decision.
6. We further find that the Hon'ble Gujarat High Court while adjudicating a similar issue in respect of deduction of tax at source from payments for hiring dumpers for transporting building material concluded in their decision dated 11.01.2001 in the case of Shree Mahalaxmi Transport Co. in ITA no.1038 of 2009 in the following terms:-
"5. The Commissioner (Appeals) upon appreciation of the evidence on record has found that the assessee had given sub- contracts of transportation of goods from one place to another. To prove the nature of contracts, the assessee had produced various bills issued by such; sub-contractors to show that, the contracts were mainly carried out for shifting of goods from one place to another. The Commissioner (Appeals) also found that the charges were collected by sub-contractors on the basis of the quantity· of goods transported and the number of trips carried out; the assessee had not acquired dumpers on rent or lease; and that the possession and control of vehicles was with the sub-contractors, who only provided services of shifting of goods from one place to another place. It was noted that evidence in support of above was submitted to the Assessing Officer during assessment proceedings. In the background of the aforesaid findings of fact recorded by him, the Commissioner (Appeals) was of the view that when the. transportation, contract was in the nature of shifting of goods from one place to another, such contracts would be covered as works contracts and provisions of section 194C would be applicable, According to the Commissioner (Appeals), since the assessee had given sub-contracts for transportation of goods and not for the renting out of machineries or equipments, such 9 ITA Nos.14, 15, 41, 42, 98, 99,103 & 104/Agr/2010 A.Ys. 2009-10 & 2008-09 .
payments could not be termed as rent paid for the use of machinery and the provisions of section 194-I of the Act would not apply to such contracts. The Commissioner (Appeals) accordingly held that the assessee has rightly deducted TDS under section 194C of the Act; that there was no default no the part of the assessee under the TDS provisions and as such there was no short deduction of tax and set aside the levy of interest under section 201 (1A) of the Act.
..............................................................................
9. 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 justified in holding that the transactions in question being in the nature of contracts for shifting of goods from one place to another would be covered as works contracts, thereby attracting the provisions of section 194C of the Act. That since the assessee had given sub- contracts for transportation of goods and not for the renting out of machineries or equipments, such payments could not be termed as rent paid for the use of machinery and the provisions of section 194-I of the Act would not be applicable. The Tribunal was, therefore, justified in upholding the order passed by the Commissioner (Appeals)."
7. Likewise, in their another decision dated 11.1.2001 in the case of CIT Vs. Swayam Shipping Services Pvt. Ltd. in ITA no.1037 of 2009, Hon'ble Gujrat High Court concluded as under:-
"6. The facts are not in dispute. The assessee has carried out freight and transportation works contracts with three transporters who transported the goods belonging to the assessee and its clients to various places through their vehicles. The assessee had not taken the trailers/cranes on hire or rent 10 ITA Nos.14, 15, 41, 42, 98, 99,103 & 104/Agr/2010 A.Ys. 2009-10 & 2008-09 .
from the said parties. The assessee has given sub-contracts to the said parties for the transportation of goods and not for renting out of machineries and equipments. Section 194-I of the Act makes provision of deduction of tax at source where any person who is responsible for paying to a resident any income by way of rent where as section 194C of the Act makes provision for deduction of tax at source where any person is responsible for paying any sum to any resident for carrying out any work including supply of labour for carrying out any work in pursuance of a contract between the contractor and a specified person. In the facts of the present case, there is nothing to indicate that the assessee has taken trailers/cranes on rent so as to attract the provisions of section 194-I of the Act. The assessee had given sub-contracts for transportation of goods. In the circumstances, the said transactions would fall within the purview of section 194C of the Act as the assessee was responsible for paying the amount in question for carrying out work in pursuance of contracts between the assessee and the transporters and as such was required to deduct tax at source at the rate prescribed under the said section. The Commissioner (Appeals) was, therefore, justified in holding that the assessee was not an assessee in default within the meaning of the said expression as contemplated under section 201 of the Act and consequently, the Tribunal was justified in confirming the order passed by the Commissioner (Appeals)."
8. Apart from circular nos. 558 and 681 issued by the CBDT, clause 49.3 of the explanatory notes to Finance (No.2) Act, 2009 points out that tax is required to be deducted at source in terms of provisions of sec. 194C of the Act on payments to transport contractors" engaged in the business of plying, hiring or leasing goods carriages and amended provisions would exempt payments to transport operators if operator furnishes its PAN to the deductor.
9. We also find that the Hon'ble Bombay High Court in their decision dated 29.6.2007 in Indian National Ship Owners' Association and Others Vs. CIT (TDS) in CWP no. 400 of 2007 concluded that the provisions of section 194-I of the Act are applicable only in respect of rent for land or building (including factory building), furniture, fittings 11 ITA Nos.14, 15, 41, 42, 98, 99,103 & 104/Agr/2010 A.Ys. 2009-10 & 2008-09 .
or any other machinery attached thereto and not for anything else like ships, transport vehicles (including railways) and freight/charter hire payments thereto. Hon'ble High Court further held that explanation-III of section 194-C, clarifies that the expression "work" means carriage of goods and passengers by any mode of transport other than by railways and tax from freight payments have to be deducted under this section and not under section 194-I of the Act. Following the view taken in this decision, lTAT in the case of Accenture Services (P) Ltd., 2010-TIOL-618-ITAT-Mum held that expression plant and machinery used in explanation to sec. 194-I of the Act refers only to the plant and machinery used by the assessee in their business by hiring them but not the hiring the transport services. The ITAT Delhi Bench in their decision in the case of Lotus Education Society (supra) held that provisions of section 194-I of the Act could not be applied in the case of payments made to bus operators, providing pick up and drop facility to school students. In Ahmedabad Development Authority, ITAT Ahmedabad Bench in their decision dated 10.3.2011 in ITA no.1637/Ahd./2010 held in the context of deduction of tax at source from fixed rent payments for hiring cars that provisions of section 194C of the Act were applicable in respect of payment for vehicle hire charges and not the provisions of section 194-I of the Act.
10. In the light of consistent view taken in the aforesaid decisions and considering the various clauses in the aforesaid Bulk Petroleum Products Road Transport agreement, we have no hesitation in upholding the findings of Id. CIT(A) in concluding that the arrangement for transportation of petroleum products was essentially a contract for transportation of goods and not an arrangement of hiring of vehicles. In view thereof, tax is required to be deducted at source from the payments to the carrier in terms of provisions of sec. 194C of the Act and not u/s 194-I of the Act. Therefore, ground nos. 1.1 & 1.2 in these six appeals of the Revenue are dismissed. As a corollary, grounds raised in the six COs become academic and do not survive for our adjudication."
12 ITA Nos.14, 15, 41, 42, 98, 99,103 &104/Agr/2010 A.Ys. 2009-10 & 2008-09 .
7. Ld. Departmental Representative, however, relied upon the order of the Assessing Officer but he did not dispute that the facts of the case of Delhi Bench and facts of the case under consideration are identical.
8. Since on identical set of facts the issue has been decided by the I.T.A.T., Delhi Bench in assessee's own case vide order dated 16.11.2011, in the light of the facts, we set aside the order of CIT(A) and the order of the Assessing Officer.
Under the facts and circumstances of the case which are identical to the facts of the case decided by I.T.A.T., Delhi Bench (supra), we hold that the payments paid or payable to operators of the tanker truck owners by the assessee company is subject to deduction of tax at source under section 194C of the Act @ 2%. The Assessing Officer is directed accordingly. Thus, the appeals of the assessee for A.Ys. 2009- 10 & 2008-09 are allowed and the appeals of the Revenue for F.Ys. 2008-09 & 2007-08 are dismissed.
ITA Nos.98 & 99/Agr/2010 by the Assessee and ITA Nos.103 & 104/Agr/2010 by the Revenue
9. The common issue raised in these appeals pertains to deduction of tax at source in respect of payment of hire charges paid for LMV and Buses.
13 ITA Nos.14, 15, 41, 42, 98, 99,103 &104/Agr/2010 A.Ys. 2009-10 & 2008-09 .
10. During the course of survey conducted on 09.02.2009, it was also found that the assessee hired LMV and Buses from different parties for its employees to look after the administration of the Refinery and other functions punctuality etc. During the course of survey, it was fond that the assessee was deducting tax on payment of hire charges @ 2% under section 194C of the Act. The Assessing Officer was of the view that after amendment w.e.f. 01.06.2007 the assessee is liable to deduct tax at source under section 194-I of the Act @ 10%. The Assessing Officer accordingly created additional demand and charged interest, the details of which are as under :-
Financial Year Short Deduction Interest Charged Total Demand 2007-08 21,20,277 4,27,579 25,47,856 2008-09 (till Dec '08) 10,21,826 1,00,152 11,21,978 TOTAL 31,42,103 5,27,731 36,69,834
11. The CIT(A) after considering the assessee's submission and after examining the clause-wise agreement of vehicle hire found that some of the clauses pertaining to rent part is liable for deduction of tax under section 194-I and some of the clauses pertaining to work part is liable for deduction of tax @ 2%. The CIT(A) accordingly apportioned the payment as per section 194C and 194-I and directed the Assessing Officer to compute the tax and interest under section 201(1)/201(1A) of the Act.
14 ITA Nos.14, 15, 41, 42, 98, 99,103 &104/Agr/2010 A.Ys. 2009-10 & 2008-09 .
12. We have heard the ld. Representatives of the parties and records perused.
As per the discussions made above while deciding the appeals relating to tax deducted at source in respect of payment for tanker Truck etc, we hold that the CIT(A) was not correct in making apportion in between the sections 194-I and 194C of the Act. In respect of these appeals also the ld. Representatives of the parties submitted that the effective facts for deciding the issue are common in the case under consideration and in the case of a decision of I.T.A.T., Ahmedabad Bench in the case of Ahmedabad Urban Development Authority vs. ACIT TDS Circle in ITA No.1637/Ahd/2010 order dated 10.03.2011. The relevant finding noted from copy of order filed in assessee's Paper Book is reproduced as under :-
"5. We have considered the rival submissions and the material available on record. The facts noted by the AO are not in dispute that the assessee had hired cars on fixed rent payment and TDS was deducted @ 2% treating the same as contract as per section 194C of the IT Act. The AO also noted that the assessee had made vehicle hire charges payment in connection with plying of employees from one place to another. It was also noted by the AO that vehicles are owned and maintained by contractors. The assessee paid fixed payment for use of the hired cars and all the expenses are borne by the contractors. It is also admitted fact that the assessee is a local authority. The provisions of section 194C of the IT Act is applicable to the assessment year under appeal provided (a) any person responsible for paying any sum to any resident (b) any local authority (as the assessee is) referred to as a contractor for carrying out any work in pursuance of the contract between the contractor and the local authorities etc., shall at the time of credit of such sum to the account of the contractor or at any time of payment thereof in cash or issue of a cheque or draft or by any other mode whichever is earlier, 15 ITA Nos.14, 15, 41, 42, 98, 99,103 & 104/Agr/2010 A.Ys. 2009-10 & 2008-09 .
deduct an amount equal to, (i) 1% in case of "advertising", (ii) or in any other case 2%, of such sum as income tax or income comprised therein. The definition of "work" has been provided in Explanation
(iii) to Section 194C of the IT Act which provides for the purpose of this section, expression "work" shall also include:
(a) Advertising,
(b) Broadcasting and telecasting including production of programmes for such broadcasting or telecasting,
(c) Carriage of goods and passengers by any mode of transport other than railways,
(d) Catering.
The AO admitted that the assessee had hired the cars on fixed rent payment owned and maintained by contractor. The Assessee paid vehicle hire charges and all the expenditure are borne by the contractor. It is also admitted fact that vehicle charges were paid in connection with plying of employees from one place to another. Thus, it implies that the passengers were transported by the drivers and vehicles of the vehicle owner/contractor and in consideration of that the vehicle owners/contractors were paid by the assessee the fixed amount. Therefore, sub-clause (c) to Explanation (iii) of the provisions of Section 194C of the IT Act would apply in the case of the assessee. In our opinion the above payment of vehicle hire charges clearly falls within the scope of section 194C of the IT Act. The assessee, therefore, correctly deducted tax thereof as per the provisions of section 194C (Explanation (iii)(c) of the IT Act. Same view is taken by ITAT Ahmedabad "B" Bench in the case of M/s. Mukesh Travels Co. (supra) copy of which is placed on record. The AO however, noted that the provisions of section 194-I of the IT Act would apply in the matter being rent paid to the contractor which provides as under: (prior to amendment w.e.f. 1-10-2009).
"194-I Any person, not being an individual or a Hindu undivided family, who is responsible for paying to [a resident] any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any 16 ITA Nos.14, 15, 41, 42, 98, 99,103 & 104/Agr/2010 A.Ys. 2009-10 & 2008-09 .
other mode, whichever is earlier, [deduct income-tax thereon at the rate of-
[(a) ten per cent for the use of any machinery or plant or equipment; and
(b) fifteen per cent for the use of any land or building (including factory building or land appurtenant to a building (including factory building) or furniture or fittings where the payee is an individual or a Hindu undivided family; and;]]
(c) twenty percent for the use of any land or building (including factory building), or land appurtenant to a building (including factory building) or furniture or fittings where the payee is a person other than an individual or a Hindu undivided family"
Provided that no deduction shall be made under this section where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the aforesaid person to the account of, or to, the payee, does not exceed one hundred and twenty thousand rupees :
[Provided further that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such income by way of rent is credited or paid, shall be liable to deduct income tax under this section.] Explanation.- For the purposes of this section,-
[(i) "rent" means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any,-
(a) land; or
(b) building (including factory building); or 17 ITA Nos.14, 15, 41, 42, 98, 99,103 & 104/Agr/2010 A.Ys. 2009-10 & 2008-09 .
(c) land appurtenant to a building (including factory building); or
(d) machinery; or
(e) plant; or
(f) equipment; or
(g) furniture; or
(h) fittings, whether or not any or all of the above are owned by the payee;]
(ii) where any income is credited to any account, whether called "Suspense account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.] The above definition of rent does not provide any item for vehicle hire charges. Therefore, provisions of section 194-I has been wrongly applied in the matter by the AO. Considering the above discussions we are of the view that the authorities below have wrongly applied the provisions of section 194-I of the IT Act in the matter. We accordingly, set aside the orders of the authorities below and delete the demand and the interest thereon for shortfall as noted by the AO on this issue."
13. The ld. Departmental Representative, however, relied upon the order of the Assessing Officer but did not controvert in respect of the facts of the case under consideration and facts of the order of I.T.A.T., Ahmedabad Bench in the case of Ahmedabad Urban Development Authority (supra). Since the facts related to the issue to be decided are identical, by respectfully following the above order of I.T.A.T., Ahmedabad Bench and in the light of the facts, we find that the assessee 18 ITA Nos.14, 15, 41, 42, 98, 99,103 & 104/Agr/2010 A.Ys. 2009-10 & 2008-09 .
was rightly deducting tax under section 194C of the Act in respect of payment to LMV and Buses. The Assessing Officer is directed accordingly. Thus, the appeals of the assessee for A.Ys. 2009-10 & 2008-09 are allowed and the appeals of the Revenue for F.Ys. 2007-08 & 2008-09 are dismissed.
14. Summary of result:-
1. ITA Nos.14 & 15/Agr/2010 for A.Ys. 2009-10 & 2008-09 filed by the assessee are allowed.
2. ITA Nos.41 & 42/Agr/2010 for F.Ys. 2008-09 & 2007-08 filed by the Revenue are dismissed.
3. ITA Nos.98 & 99/Agr/2010 for A.Ys. 2009-10 & 2008-09 filed by the assessee are allowed.
4. ITA Nos.103 & 104/Agr/2010 for F.Ys. 2007-08 & 2008-09 filed by the Revenue are dismissed (Order pronounced in the open Court) Sd/- Sd/-
(BHAVNESH SAINI) (A.L. GEHLOT)
Judicial Member Accountant Member
PBN/*
19 ITA Nos.14, 15, 41, 42, 98, 99,103 &
104/Agr/2010
A.Ys. 2009-10 & 2008-09
.
Copy of the order forwarded to:
Appellant
Respondent
CIT concerned
CIT (Appeals) concerned
D.R., ITAT
Agra Bench, Agra
Guard File.
By Order
Sr. Private Secretary
Income-tax Appellate Tribunal, Agra
True Copy