TaxTMI 
TaxTMI 
2008 (11) TMI 322
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....0,000 made on account of hire charges in respect of hiring of trucks by invoking s. 40(a)(ia) of the IT Act, 1961. 2. While deleting the addition the learned CIT(A) was not right in holding that the truck charges paid to the truck owners were not subject to the provisions of s. 194C of the IT Act, 1961 as the continuous activity of the assessee shows that these trucks were hired for the purpose of transporting goods covered under service contract within the ambit of the Circular No. 681, dt. 8th March, 1994 [(1994) 117 CTR (St) 229] liable for deduction of TDS within the meaning of s. 194C of the IT Act, 1961." 2. The AO observed that the assessee firm had made payment on account of hiring charges in respect of hiring of trucks, to th....
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....ition made by the AO has rightly been ordered by the learned CIT(A); that the assessee did not enter into any contract between the assessee and the truck owners for carrying goods or passengers; that the payment made was of hiring charges not subject to TDS under s. 194C of the Act; that the hiring charges of transport is different from a transport contract for carriage of goods; and that as such, there being no force therein, the appeal filed by the Department is liable to be dismissed. 7. We have heard the parties and have perused the material on record. The learned CIT(A), while deleting the addition, has observed as follows: "The AO also effected addition of Rs. 17,40,000 on account of hire charges in respect of hiring of trucks. ....
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....ps from the shipping company, 'it could not be construed as if the assessee entered into any contract for carrying out any work and being so, the Revenue cannot insist that the assessee ought to have deducted tax at source under s. 194C.' Similar was the decision of Hon'ble Tribunal of Pune Bench in the case of Datta Digamber Sahakari Kamgar Sanstha Ltd. vs. Asstt. CIT (2002) 77 TTJ (Pune) 540 dt. 25th Sept., 2000 wherein tanker owners merely entrusted their tankers to the assessee society and it was the society who took all the work relating to execution of transport contract. The provision of s. 194C was held not applicable. Therefore, in the light of the facts of the case of appellant and the decisions, the addition effected by the AO ca....
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.... not retrospective. The year under consideration is 2005-06. Therefore, the Expln. III to s. 194C of the Act is directly applicable. As per the Explanation, "work" shall also include carriage of goods or passengers by any mode of transportation other than railways. The expression used in s. 194C(1) is "any work", including supply of labour for carrying out any work. The work in the present case, for which, payments were made by the assessee, was hiring of trucks. In CIT vs. Poompuhar Shipping Corporation Ltd., payment of hire charges for taking temporary possession of ships was held not to fall within the provisions of s. 194C of the Act. It was held that hiring of ships for the purpose of using them in the assessee's business did not amoun....
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....it is not the case of the Department that the assessee entered into any contract with the truck owners for transportation of goods or passengers from one place to another. Thus, the hiring of trucks for the purpose of using them in the assessee's business would not amount to a contract for carrying out any work, as contemplated in s. 194C of the Act, as held in CIT vs. Poompuhar Shipping Corporation Ltd. 12. For carrying out any work, manpower is the sine qua non and without manpower, it cannot be said that work has been carried out. Under s. 194C of the Act "carrying out any work" is the substance for making a payment relating to such work, liable for deduction tax at source. The provisions of s. 194C are attracted only where any sum is....