TaxTMI 
TaxTMI 
2014 (1) TMI 302
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....e on hiring of trucks, the ground that the assessee had failed to discharge his tax withholding obligations in respect of the same. 2. The issue lies in a narrow compass of undisputed material facts. The assessee is engaged in the business of, as stated in the assessment order itself, "transport, and hiring trucks and warehousing". In the course of the assessment proceedings, the Assessing Officer noticed that the assessee has paid truck hire charges amonting to Rs 6,50,000, but has not deducted any tax at source from the same. When Assessing Officer required the assessee to show cause as to why this amount not be disallowed under section 40(a)(ia), it was stated by the assessee that payments of truck hire charges are not under a sub contr....
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....ractor and not being an individual or a Hindu undivided family), responsible for paying any sum to any resident (hereafter in this section referred to as the subcontractor) in pursuance of a contract with the sub-contractor for carrying out, or for the supply of labour for carrying out, the whole or any part of the work undertaken by the contractor or for supplying whether wholly or partly any labour which the contractor has undertaken to supply shall, at the time of credit of such sum to the account of the sub-contractor or 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 one per cent of such sum as income-tax on income comprised therein. &n....
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....sp; (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 by railways; (d) Catering" 5. A plain reading of the above provision indicates that in order to attract the applicability of Section 194C(2), the payment has to be made by a contractor to a sub-contractor for "carrying out or for the supply of labour for carrying out, the whole or any part of the work undertaken by the contractor or for supplying whether wholly or partly any labour which the contractor has undertaken to ....
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.... back hiring arrangements, it will clearly be case of sub-contracting and the provisions of Section 194 C(2) will come into play. As we have noted earlier, in the present case, the assessee is mainly engaged in the business of transporting of goods, and, in a situation in which the assessee is doing the business of transport of goods, and in the course of carrying out such business, he takes the trucks on hire for transportation of goods, the truck hire is an independent and standalone contract which, though essentially an integral part of the business of transportation, cannot be said to be a sub contract. However, a perusal of material before us as indeed orders of the authorities below, does not help us reach any specific finding to that....