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TMI Blog2008 (11) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... y within the accounting year on which no TDS was effected. The last additional ground raised by the assessee is with respect to the difference in TDS Certificate pending reconciliation renders the amount sought to be brought to tax by the AO only on the income thereon and not the entire receipt as was considered in the case law reported in 258 ITR 654. 2. The learned counsel for the assessee while reiterating the facts as were also made before the learned CIT(A) submitted that the Assessing Officer has taken the view that the vehicle hire charges paid under vehicle hire contract was a transportation contract for the reasons stated in pages 1 to 3 of the order of the learned CIT(A). The main reason for this conclusion was that the CBDT had clarified that vehicle is not 'machinery' because there is a separate rate of depreciation for it in the depreciation schedule. The gist of contention was that since it was only a clarification by CBDT and not a circular not binding even on the Assessing Officer the vehicle falls to be clarified as a 'machinery' as per section 32 of the Income Tax Act and also as given in table of depreciation chart and thus the clarification is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r transportation of goods or passengers and is a transport contract. The owner of the vehicle hired do not transport goods or passengers nor are they entrusted to execute the transport contract between assessee and its customer. It was executed by the assessee by hiring its own vehicle or hired vehicles, the customers also pay to the assessee and not to the owner of the hired vehicle. Thus the AO had grossly erred in simply relying on an answer to Q.No.54 by CBDT in compilation in a book form, without showing how it is a transport contract as per provisions of Expln. III(c) to Section 194C of the Act. 3. The learned counsel for the assessee further argued that the authorities below erred in holding that a contract for hire of vehicle for use in the business of the assessee was a transportation contract for the reasons stated in the orders of the authorities below. The authorities failed to appreciate that a vehicle was a machinery for the purpose of depreciation as per section 32 of the Act and also appendix to depreciation chart and the fact that the different rate of depreciation was fixed for it does not in any way alter this situation and just because a different rate of dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the relevant previous year i.e. 31.3.2005 and hence these certificates ought to be considered for the AY 2005-06 only even though the gross amount covered by these TDS certificates were included in subsequent year. The assessee had rightly included the gross amount of ₹ 682968 in the total income for the AY 2006-07. There was no omission to offer the income assessable to tax in the return for AY 2005-06. The above two additions aggregating ₹ 86,28,193 was highly debatable and was not anticipated by the assessee. Hence the Assessing Officer was not justified in charging interest u/s.234B on account of these additions which was purely hypothetical. There was no specific order by the Assessing Officer for charging interest u/s. 234B. The learned authorities failed to appreciate that in the view taken by them even a contract for purchase of vehicle or for hire purchase of vehicle becomes transport contract just because it was entered into by a transport operator and liable to TDS u/s.194C which leads to absurd results. 4. The learned Departmental Representative has submitted a paper book containing documents being part of the assessment records such as copy of Balan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same on both counts which he fully supported for his part of submission. 5. We have heard the rival contentions and perused the material available on record. On our careful perusal of the facts and circumstances, we are inclined to uphold the learned CIT(A) order on both the issues raised before us. The additional grounds with respect to the question of applicability of section 194C for machinery taken on rent being a car where applicable has already been dealt with on facts reiterated before us by the authorities exclusively which the assessee now cannot raise as an additional ground. TDS receipts were noted by the Assessing Officer for rendering the same for assessment. With respect to the additional ground regarding section 40(a)(ia) applicable to the amount payable, the law is clear in so far as the amounts stood paid to the respective payees as per the ladger copies considered by the Assessing Officer and confronted to the assessee vide his letter dt.17.10.07 which the assessee failed to respond satisfactorily as noted by the Assessing Officer. Various case laws cited by the learned counsel do not relate to the issue on hand and therefore when a direct application of l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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