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TMI Blog2012 (3) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... nt on the issue of section 40(a)(ia). Reducing the addition on account of part payment of his charges payment, packing charges, conveyance, staff welfare, sundry expenses and Tea & other expenses. X X X X Extracts X X X X X X X X Extracts X X X X ..... of vehicles for hiring their vehicles and does not form any sub contract of any transportation since assessee hires vehicles from different owners & engages its own labour and executes the contact on its own. The AO has not accepted the submission given, stating that assessee is a contractor who hires vehicles from others to execute the contracts. However the assessing officer rejecting the submission considered the same as sub-contract under section 194C(2) and disallowed ₹ 45,65,700/- u/s 40(a)(ia). 3. The assessee, not satisfied, approached the CIT(A), before whom, the assessee reiterated his contention and arguments. The CIT(A), in his order after going through the submissions made, observed, "As per the details prima facie m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above said characteristics attached to a sub-contract in the instant case, the payment made to the lorry owners stands at par with the payments made towards salaries, rent, etc. Hence the reasoning of the tax authorities to hold that the payment made for hired vehicles is a sub-contract payment is not correct and not based on relevant considerations. It cannot be said that the payments made for hired vehicles would fall in the category of payment towards a sub-contract with lorry owners. In that case the assessee is not liable to deduct tax at source, as per the provisions of s.194C (2), on the payments made to the lorry owners for lorry hire. Consequently, the provision of s.40(a)(a) shall not apply to such payments. The same view has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s into account complete factual details of the case. We are inclined to accept the view taken by the CIT(A) and therefore, reject the ground as raised by the department on the issue of section 40(a)(ia). 5. Ground No. 2 is on account of reducing the addition of ₹ 2,00,000 to ₹ 1,00,000 on account of part payment of his charges payment, packing charges, conveyance, staff welfare, sundry expenses and Tea & other expenses. 6. Both sides submitted that an appropriate view may be taken. Since the DR has virtually not argued on this issue, we therefore, refrain ourselves to take any other decision on the issue, and sustain the decision of CIT(A). 7. The ground as raised by the revenue is therefore, rejected. 8. The appeal, thus fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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