TaxTMI 
TaxTMI 
2012 (10) TMI 655
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....sed by the Income Tax Appellate Tribunal is contrary to the evidence and material on the record of the case and is suffering from non-application of mind and, hence, perverse or not?" 2. The respondent assessee is a Co-operative Society principally engaged in the manufacturing of fertilizers. For its such activities, it consumes natural gas. Such gas is supplied by different agencies through pipelines. 3. It is the case of the Revenue that while purchasing gas from gas supplying agencies, the assessee entered into a work contract for transport of such gas from seller's premise to the buyer's consumption points. It is the case of the Revenue that upon payment of such work contract, the assessee was required to deduct appropriate TDS at appropriate rate under Section 194C of the Income Tax Act, 1961. 4. The Assessing Officer was of the opinion that, in facts of the case 194C of the Act would apply. The assessee carried the issue in appeal. CIT(Appeals) also held in favour of the Revenue observing that Clause (c) of Explanation III to Section 194C would cover a situation repelling the assessee's contention that only in case of transport of goods and passengers, such clause wo....
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....n 194C of the Act and vehemently contended that the Tribunal erred in reversing the orders passed by the Revenue authorities. He submitted that Section 194C of the Act was clearly attracted. The case on hand was covered by clause (c) of Explanation III to Section 194C of the Act. He submitted that the assessee had agreed to bear the transportation charges separately and that such charges were to be paid monthly. Our attention was drawn to Article 4.02 of the contract between the assessee and GAIL, wherein it was provided inter alia that the buyer i.e (the assessee) in addition to price of gas mentioned in Article 11, shall pay to the seller, monthly transportation charges of Rs. 49,58,250/- plus taxes with effect from 1.4.1996 for the facilities provided by the seller ( GAIL) for supply of gas to the point of delivery located at the buyer's premises. There is also escalation clause permitting increase in such charges on yearly basis after completion of first year of the agreement. 8. Reliance was placed by the Revenue in the case of Central Board of Direct Taxes vs. Cochin Goods Transport Association reported in [1999] 236 ITR 993 (Ker.) and in the case of Associated Cement Co. ....
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....*** (b) **** (c) carriage of goods and passengers by any mode of transport other than by railways; (d) ****" 11. From the above statutory provision, it can be seen that in case of carrying out of any work in pursuance of any contract between the contractor and any of the specified bodies provided under different clauses of sub-section (1) of Section 194C of the Act, which includes cooperative society, there had to be a deduction of 1% or 2%, as the case may be, at the time of credit of such sum to the account of the contractor or at the time of payment in cash or by issuance of cheque or draft or any other mode, whichever is earlier. Term 'work' in turn has been explained in Explanation III to Section 194C of the Act, which shall also include besides others, carriage of goods and passengers by any mode of transportation other than by railways. 12. In that view of the matter, if the assessee had entered into any contract for carrying out any work of carriage of goods with the seller, his case would certainly fall under clause (c) of Explanation III to Section 194C and in turn tax had to be deducted at source as specified in sub-Section (1) thereof. 13. The quest....
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.... present the invoice for the same to a Bank against Letter of Credit and draw the amount. 4.04 The BUYER shall make all proper and adequate arrangement for receiving GAS at the outlet of Gas Metering Station at its own risk and cost. Should any defect in the BUYER's intake arrangement arise, the same shall be rectified by the BUYER themselves. 4.05 For effecting deliveries of GAS as aforesaid the SELLER shall install and maintain at its own risk and cost, the piping control, regulation and metering equipment in the aforesaid Gas Metering Station and all other accessories. The said equipment so installed by the SELLER shall remain the property of the SELLER and the SELLER shall have the right to remove such equipment at any time within twelve (12) months after the expiry of the contract. The SELLER shall have the right to use the BUYER's utilities essentially required for installation, operation and maintenance of GAS metering station and allied equipment required for the supply of GAS on payment of such charges for utilities only as may be mutually agreed. All Statutory approvals shall be obtained by the SELLER. 4.6 The title of Gas shall pass from the SELLER to the BUYER ....