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TMI Blog2013 (12) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... No basis for confining the effect of the words "other agreement or arrangement for the use of" "either separately or together" in regard to the machinery, only if it is part of immovable property. The Legislative intent is clear, in that, it intends liability to deduct tax in respect of "any machinery or plant or equipment". The machinery need not be the machinery annexed or immovable property otherwise under the Transfer of Property Act. - Decided against the assessee. - ITA. No. 85 of 2012 - - - Dated:- 26-11-2013 - K. M. Joseph And C. K. Abdul Rehim,JJ. JUDGMENT K. M. Joseph, J. The Appeal is filed under Section 260A of the Income Tax Act impugning the order passed by the tribunal by which the tribunal has found that the tax has to be deducted at ten per cent under section 194-1 of the Act and agreed with the assessing officer that the provisions contained in Section 194C are not applicable. As regards the contention that Section 40(a)(ia) is applicable only in case of non-deduction of tax and not for short deduction of tax, the matter was remitted back to the assessing officer. The assessing officer on processing the return of the assessee for the year 2007-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the runway usage by an aircraft is concerned, it could be no different from the analogy of a road used by any vehicle or any other form of transport. If the use of tarmac could be characterised as use of land, so too the use of a road would be a use of land. We do not think that for the purpose of treating the payment as rent, such use would fall under the expression "use of land". Thus, going by the nature of services offered by the Airport Authority of India for landing and parking charges thus collected from the assessee herein, we do not find any ground to accept that the payment would fit in with the definition of `rent' as given under Section 194-1 of the Income Tax Act." That was a case where the question arose in the following facts: "The assessee is an international airlines. In the course of the assessment proceedings, for the assessment years 1997-98 to 1999-2000, the assessee claimed that the charges paid to International Airport Authority towards landing and parking charges would not come within the definition of `rent' as defined under Section 194 I Explanation of the Income TaxAct and hence, the liability to deduct tax at source under Section 194 I or under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y sum for the transport contract." (vi) In Birla Cement Works v. Central Board of Direct Taxes And Others [(2001) 248 ITR 216), the Apex Court was dealing with a case where the cement manufactured by the petitioner was being transported to various destinations with the assistance of approved transport operators company. The appellant did not deduct any tax under Section 194C for payments made. The Court held as follows: "Section 194C of the Income-tax Act, 1961, which provides for deduction of tax at source from payments to contractors and sub-contractors, prior to the insertion of Explanation III therein with effect from July 1, 1995, was not applicable to transport contracts, i.e., contracts for carriage of goods. This interpretation, which is one of two possible interpretations as to whether contracts for carrying of goods would or would not come within the ambit of the expression "carrying out any work" in that section, which favours the assessee and which has been acted upon and accepted by the Revenue for a long period, should not be disturbed except for compelling reasons. Further, there are no compelling reasons for holding that Explanation III was clarificatory in natu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or (b) building (including factory building); or ) land appurtenant to a building (including factory building); or (d) machinery; or (e) plant; or (f) equipment; or (g) furniture; or (h) fittings, whether or not any or all of the above are owned by the payee." The relevant terms of the agreement which have been set out by the tribunal also, which are relevant reads as follows: "02. The parties hereto agree that this agreement shall be a composite contract for hire of vehicles to be used for loading, unloading and transport of the products of the party of the second part and the entire agreement shall be deemed to be an indivisible contract. 03. The control, custody, ownership and possession of all the vehicles under hire shall remain at all times with the party of the First Part and it is expressly understood by and between the parties hereto that the party of the second part will have only the right to use the vehicles and there is no transfer of right to use the vehicles. 04. The party of the first part shall provide the drivers, cleaners and other staff required for the running and operation of the vehicles and the costs relating to the personnel shall b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f transport other than by railways. Therefore, the contention of the appellant would appear to be that in so far as the material which are goods are carried in the vehicles, it amounts to carrying out the work. The tribunal has returned the finding that what is involved is hire charges paid for the goods taken on hire. What the appellant is permitted to do with the vehicles alone is mentioned in clause (2) of the contract which we have already extracted. All those works are done by the appellant. No work within the meaning of Section 194C is actually done by the owner. In such circumstances, we find no merit. No doubt, the drivers, etc. are paid for by the owner. 6. Equally without merit is the contention of the learned counsel for the appellant that for attracting Section 194(I), there must be a lease or other arrangement relating to immovable property. The argument is based on the provisions contained in the Explanation which we have already extracted. The Explanation defines the word "rent". According to him, the words "lease" , "sub-lease" and "tenancy" are used. The further words "such agreement or arrangement" draw their colour from the words"lease, sublease and tenancy" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income Tax Department. Further more, we are concerned with the actual facts of this case. 9. The further question which arises for our consideration is whether the tribunal ought to have remanded the matter relating to Section 40(a)(ia) for consideration of the assessing officer. According to the learned counsel for the appellant, the deduction under Section 40(a)(ia) has been declined by the assessing officer for even the amount which the appellant has deducted on the basis that the payments come within the ambit of Section 194(c) is disallowed. According to him, even assuming that the case falls under Section 194-I, at least the amount which the appellant has deducted under Section 194C should be allowed to be deducted from his total income as per law. In this connection he drew our attention to the Judgment of the Culcutta High Court in Commissioner of Income Tax, Kolkata-XI v. M/s. S.K.Tekriwal [(2012) 12 TMI 873). Therein, the Calcutta High Court held as follows: "Here in the present case, the assessee has deducted tax u/s.194C(2) and not u/s. 194-I, but there is no allegation that this TDS is not deposited with the Government Account. Section 40(a)(ia) refers only to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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