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TMI Blog2012 (4) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... n 10-09-2004 for hiring of vehicles to be used for loading & unloading and transportation of products. According to the ld. representative, this agreement dated 10-09-2004 is a composite agreement for loading, unloading and transportation of the goods. Therefore, the provisions of section 194C are applicable. According to the ld. representative, the assessee deducted tax as per section 194C of the Act. However, the assessing officer found that the provisions of section 194C are not applicable and the assessee is required to deduct tax at source u/s 194-I of the Act. According to the ld. representative, in view of the composite agreement entered into between the assessee and Shri P Bhasi, the provisions of section 194C alone is applicable an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and persons enumerated in section 194C of the Act. It is not in dispute that the assessee admittedly entered into a contract with a person who is enumerated in section 194C of the Act. Thus, the question arises for consideration is whether it was a contract for carrying out any work or it is merely hiring of vehicle. If it is merely hiring of plant, equipment or vehicle, then the provisions of section 194-I may come into operation. The assessee claims that the agreement was a composite one for the purpose of carrying out work. Therefore, the provisions of section 194C would come into operation. If section 194C is applicable, the assessee has to deduct tax @ 2%. In case it is a mere hiring of equipment, plant or machinery or vehicle, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; b. HITACHI EXCAVATOR with Backhoe : Rs.650 per hour of use; c. L&T EXCAVATOR : Rs. 250 per hour of use; d. TATA TIPPER : Rs. 500 per day of use not exceeding 18 hours; e. TATA TIPPER : Rs. 750 per day of use not exceeding 18 hours; f. LELAND TIPPER : Rs. 1,250 per day of use not exceeding 18 hours; g. LEYLAND TAURUS : Rs.1750 per day of use not exceeding 18 hours; h. NISSAN : Rs. 400 per day of use not exceeding 18 hours; i. MAZDA : Rs. 750 per day of use not exceeding 18 hours; j. MAHINDRA JEEP not : Rs.2563.35 per day of use exceeding 18 hours." 7. A bare reading of the agreement shows that the assessee hired the equipment/vehicle for a fixed period o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt deduction of tax, the assessee has placed reliance on various case laws. However, this issue was not considered by the lower authorities. Whether short deduction of tax would attract the provisions of section 40(a)(ia) or not has to be considered by the assessing authority at the first instance. Accordingly for the limited purpose of examining the applicability of section 40(a)(ia) of the Act with regard to the short deduction of tax, the matter is remitted back to the file of the assessing officer. The assessing officer shall examine the issue with regard to disallowance u/s 40(a)(ia) for short deduction of tax and decide the same in accordance with law after giving opportunity of hearing to the assessee. 9. With the above observation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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