2015 (1) TMI 969 - HC - Income Tax

Deduction of TDS - contracts pertaining to hiring agreement OR rental agreement - 194-C v/s 194-I - Held that - We cannot accept the contention of the learned Counsel that if the Tribunal has recorded any erroneous finding of fact or has not properly interpreted the terms of the agreement, such would fall in the arena of substantial question of law. As such, the scope of appeal under Section 260-A of the IT Act is limited to the substantial question of law and cannot be considered based on any question of fact. The Tribunal was satisfied on facts that it was hiring agreement and not rental agreement. Such finding of fact cannot be re-examined by us in the appeal under Section 260-A on the ground as sought to be canvassed. In our view, the scope of applicability of Section 194-C and Section 194-I are different, for which no substantial question arises for interpretation or for examination before this Court. Appeal dismissed. - Decided against revenue.

Summary

Issues:
Interpretation of hiring agreement vs. rental agreement under Section 194-C and Section 194-I of the Income Tax Act.

Analysis:
The judgment concerns appeals against the Tribunal's orders allowing the assessee's appeals and dismissing the Revenue's appeals. The Tribunal determined that the contracts were hiring agreements, not rental agreements, applying Section 194-C for TDS deduction instead of Section 194-I. This decision was based on a previous Tribunal ruling and a detailed examination of the facts. The appellant argued that the Tribunal's finding was incorrect and should be a substantial question of law under Section 260-A. However, the Court emphasized that the distinction between hiring and rental agreements is crucial, with different rights and liabilities under Civil Law. The Court clarified that the scope of appeal under Section 260-A is limited to substantial questions of law, not factual disputes. The Tribunal's satisfaction with the hiring agreement classification was deemed final and not subject to re-examination in the appeal.

The Court rejected the appellant's argument that the Tribunal's failure to discuss the finality of its factual findings constituted a substantial question of law. It reiterated that the applicability of Section 194-C and Section 194-I is distinct, and no substantial question arose for interpretation. Ultimately, the Court found the appeals meritless and dismissed them.