TaxTMI 
TaxTMI 
2016 (2) TMI 883
X X X X Extracts X X X X
X X X X Extracts X X X X
....withholding demands raised under section 201 r.w.s. 194I of the Income Tax Act, 1961, for the assessment years 2008-09 and 2009-10. 2. The short issue that we are required to adjudicate in these appeals is whether or not the CIT(A) was justified in holding that the tax was not required to be deducted at source under section 194I from payments made by the assessee, as the Assessing Officer himself puts it, for "logistic service for carrying goods by sea route in containers". When we put it to the learned representatives that notwithstanding somewhat elaborate, and rather argumentative, grounds of appeal set out in the both the memorandums of appeals, it is this short question which needs to be dealt with by us, learned representatives fairl....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the stand of the Assessing Officer, tax is deductible under section 194 I of the Act. The reasoning was this. The Assessing Officer was of the view that "the activity of carrying the goods from ship to the shore cannot be termed as 'transportation'" and that "in the present case, the barges are used as equipment for unloading the goods from the ship which, by no stretch of imagination, can be termed as 'transporting'". The Assessing Officer further observed that "by using the incorrect nomenclature in the bills, the basic nature of activities cannot be changed" and that "in the present case, the assessee has used the term transportation for unloading activity done by the barges". He then noted that the definition of rent under section 194I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntainers is incidental to the whole process of transportation of goods between ship and shore and it cannot be considered as a standalone transaction in its own character. The question of tax deduction under section 194I could have, if at all, arisen only when it was a rental simplictor of the equipment. That is not even the case here. No doubt the bills have been raised on the basis of the size of the container because irrespective of the weight of the container, it is size which determines how much space is taken by the goods transported. The billing on the basis of the size of the container cannot lead to the conclusion that the billing is for container rental rather than transportation of goods contained in the container. The very found....