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TMI Blog2016 (10) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... - I.T.A.No.501/Vizag/2014 - - - Dated:- 12-8-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant : Shri M.N. Murthy Naik, DR For The Respondent : Shri C. Subrahmanyam, AR ORDER PER G. MANJUNATHA, Accountant Member: This appeal filed by the revenue is directed against the order of CIT(A), Vijayawada dated 5.6.2014 for the assessment year 2007-08. 2. The brief facts of the case are that the assessee is a partnership firm engaged in the business of transport of iron ore and coal to various mining companies and metal trading companies. The assessee has filed its return of income for the assessment year 2007-08 on 31.10.2007 admitting total income of ₹ 18,32, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of work as defined under sec. 194C of the Act. It was further argued that it has entered into agreement with the companies for transportation of goods and the risk associated with transportation of goods is rest with the assessee and the lorry owners deployed the vehicles at the disposal of the assessee, therefore, the transportation charges paid is not coming within the meaning of works as defined u/s 194C of the Act. To support his arguments, relied upon the decision of ITAT, Visakhapatnam in the case of Mythri Transport Corporation Vs. ACIT in ITA No.183/Vizag/2008, P. Ramachandra Rao Vs. ACIT in ITA No.387/Vizag/2008 and Kranti Road Transport Pvt. Ltd. Vs. ACIT in ITA No.358/Vizag/2008. The CIT(A) after considering the submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rucks. The assessee has used his own trucks for the purpose of transportation of goods and also hired trucks from outsiders on fixed charges basis. The facts of the case laws relied upon by the assessee are different from the facts of the present case, accordingly the CIT(A) erred in relied upon those case laws to delete the addition made by the A.O. Therefore, requested to upheld assessment order. 5. On the other hand, the Ld. A.R. for the assessee strongly supported the order passed by the Ld. CIT(A). The A.R. further submitted that the agreement between the assessee and the lorry owners is a mere hiring of trucks, but not a sub contract as defined under the provisions of section 194C of the Act, accordingly the A.O. was not correct in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arges does not come within the definition of contract or sub contract as defined under the provisions of section 194C of the Act. The assessee further submitted that it is involved in the business of transportation of iron ore and in the process it has hired trucks from various lorry owners. The assessee further contended that the trucks which are engaged in transportation of iron ore to various ports approach the assessee for their return load. It has hired trucks from open market. It has paid part of agreed amount at the time of loading the material into trucks for their fuel and running expenses and the balance amount has been paid after completion of trip. The assessee further argued that the arrangement between assessee and the truck o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out the whole or any part of the work. The stringent clauses in the work order suggest that the assessee is solely responsible for all the acts and defaults committed by the assessee and/or its employees It is not established by the Revenue that other lorry owners, from whom the vehicles were hired, have also been fastened with any of the above said liabilities. In a sub-contract, a prudent contractor would include all the liability clauses In the agreement entered into by him with the subcontractor. The assessee has also claimed before the tax authorities that the responsibility in the whole process lies with it only. Though the passing of liability Is not the only criteria to decide about the existence of sub-contract, yet this contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts made to the lorry owners for lorry hires Consequently, the provisions of s. 4O(a)(ia) shall not apply to such payments. 8. The coordinate bench, in the case of Mythri Transport Corporation vs. ACIT (2010) 124 ITD 40, held that mere hiring of trucks is not coming within the meaning of contract or sub contract as defined u/s 194C of the Act, liable for deduction of TDS under the provisions of section 194C of the Act. Since, the Tribunal has already taken a particular view on the impugned issue and the decision of the Ld. CIT(A) is in accordance with the said law, we do not find any reason to interfere with the order of the Ld. CIT(A). Hence, we inclined to uphold the CIT(A) order and dismiss the appeal filed by the revenue. 9. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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