TaxTMI 
TaxTMI 
2016 (4) TMI 426
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....s and in the circumstances of the case and in law, the learned CIT(A) erred in holding that the provisions of section 194I are not applicable in respect of crane hire charges without appreciating the fact that as per the amended provisions of section 1941 w.e.f. 13-07-2006, the rent in respect of machinery, plant or equipment etc were brought into the ambit of section 194I.." 3. A survey u/s. 133A of the Act was carried out in the case of the assessee on 06-03-2009 for verification of compliance of TDS provisions under the Act. Certain TDS violations were noticed during the course of survey which inter alia include short deduction of tax at source on payments made to M/s. Siddhivinayak Earth Movers for hiring of cranes, JCB, Poclain etc.....
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....ax at source has been rightly deducted under the provisions of section 194C. The facts on record show that the assessee has been making payments for the use of machinery on monthly basis. In addition to the payments, the assessee is also catering food for the machine operators. There is no written contract between the assessee and M/s. Siddhivinayak Earth Movers for providing cranes and machinery. The ld. DR vehemently supported the order of the Assessing Officer and prayed for setting aside the findings of Commissioner of Income Tax (Appeals) on the issue. 5. On the other hand Smt. Deepa Khare appearing on behalf of the assessee submitted that admittedly there is no written contract between the assessee and M/s. Siddhivinayak Earth Movers.....
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....he preset case there is no such written agreement. Therefore, whether the payments made by the assessee for using the machinery are in the nature of 'rent' or 'contract payment' has to be ascertained from the facts of the case. The Commissioner of Income Tax (Appeals) in his order has given a categoric finding that the operator was required to maintain the equipment and bear the cost of repair, driver, fuel etc. The ld. AR has drawn our attention to letter dated 28-03-2013 written by M/s. Siddhivinayak Earth Movers to the Commissioner of Appeals placed on record at page 3 of the paper book. It has been specifically stated in the letter that M/s. Siddhivinayak Earth Movers has incurred expenses towards fuel, driver salary, repair and mainten....
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....nt ground is regarding the applicability of provisions of section 194C or 194I on account of payments for hiring of cranes for loading and unloading of material at its factory when the cranes are provided by the parties along with driver/operator and all expenses are borne by the owners only. We find the Hon'ble Gujarat High Court in the case of Shree Mahalaxmi Transport Company (Supra) has discussed an identical issue and has observed as under : "Chapter XVII of the Income-tax Act, 1961, makes provision for collection and recovery of tax. Part B thereof makes provision for deduction at source and is comprised of sections 192 to 206AA. Section 194C bears the heading "Payments to contractors" and lays down that any person responsibl....
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....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 equipment, 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 Comm....