9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (7) TMI 691 - AT - Income TaxRate of TDS on transportation charges paid to the transporter for carriage of goods from one location to another location - held that - the arrangement for transportation of petroleum products was essentially a contract for transportation of goods and not an arrangement of hiring of vehicles. In view thereof, tax is required to be deducted at source from the payments to the carrier in terms of provisions of sec. 194C of the Act and not u/s 194-I of the Act. Rate of TDS on payment of hire charges paid for LMV and Buses - held that - the assessee had hired the cars on fixed rent payment owned and maintained by contractor. The Assessee paid vehicle hire charges and all the expenditure are borne by the contractor. It is also admitted fact that vehicle charges were paid in connection with plying of employees from one place to another. Thus, it implies that the passengers were transported by the drivers and vehicles of the vehicle owner/contractor and in consideration of that the vehicle owners/contractors were paid by the assessee the fixed amount. - provisions of section 194-I has been wrongly applied in the matter by the AO. - provision of section 194C would apply.
Issues Involved:
1. Rate of deduction of tax at source on transportation charges paid to the transporter for carriage of goods. 2. Deduction of tax at source in respect of payment of hire charges paid for LMV and Buses. Issue-wise Detailed Analysis: 1. Rate of Deduction of Tax at Source on Transportation Charges: The primary issue was whether the assessee was required to deduct tax at source under section 194C or 194-I of the Income Tax Act, 1961, for payments made to transporters for the carriage of goods. The assessee deducted tax at 2% under section 194C, while the Assessing Officer argued for a 10% deduction under section 194-I. The Tribunal examined the facts, agreements, and relevant legal provisions, including CBDT Circular No. 558 and various judicial precedents. It was found that the agreements were for transportation services and not for hiring vehicles. The Tribunal cited multiple cases, including the Delhi Bench decision in the assessee's own case, which concluded that such payments fall under section 194C, not 194-I. The Tribunal upheld that the payments were subject to TDS under section 194C at 2%, rejecting the CIT(A)'s apportionment of 50% under section 194-I and 50% under section 194C. Consequently, the appeals filed by the assessee were allowed, and those by the Revenue were dismissed. 2. Deduction of Tax at Source for Hire Charges of LMV and Buses: The second issue involved the deduction of tax on hire charges paid for LMV and Buses. The assessee deducted tax at 2% under section 194C, while the Assessing Officer contended for a 10% deduction under section 194-I post-amendment. The Tribunal reviewed the facts and agreements, noting that the vehicles were hired for transporting employees, and all expenses were borne by the contractors. It was determined that these payments were for transportation services, not for renting vehicles, thus falling under section 194C. The Tribunal referenced the Ahmedabad Bench decision in the case of Ahmedabad Urban Development Authority, which held that such payments are covered under section 194C. The Tribunal found the CIT(A)'s apportionment incorrect and directed that the payments be subject to TDS under section 194C at 2%. Summary of Result: 1. ITA Nos. 14 & 15/Agr/2010 for A.Ys. 2009-10 & 2008-09 filed by the assessee are allowed. 2. ITA Nos. 41 & 42/Agr/2010 for F.Ys. 2008-09 & 2007-08 filed by the Revenue are dismissed. 3. ITA Nos. 98 & 99/Agr/2010 for A.Ys. 2009-10 & 2008-09 filed by the assessee are allowed. 4. ITA Nos. 103 & 104/Agr/2010 for F.Ys. 2007-08 & 2008-09 filed by the Revenue are dismissed.
|
