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TMI Blog2019 (5) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in agreement with the view taken by the lower authorities that it was obligatory on the part of the assessee to deduct tax at source u/s 194C on the payments made towards simpliciter hiring charges of cranes, set aside the order of the CIT(A) and vacate the disallowance of ₹ 9,50,600/- made by the A.O u/s 40(a)(ia). - Decided in favour of assessee. - ITA No. 587/Asr/2017 - - - Dated:- 11-3-2019 - Shri N.K Saini, Vice President and Shri Ravish Sood, Judicial Member For The Assessee : Shri. Y.K. Sud, A.R For The Revenue : Shri. M.S. Parmar, D.R ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for scrutiny assessment under Sec. 143(2) 3. During the course of the assessment proceedings it was observed by the A.O that the assessee firm had paid hiring charges aggregating to ₹ 9,50,600/- to the following parties :- Sr. No. P articulars Amount 1. Tahura Heavy Lifter ₹ 2,58,170/- 2. Tahura Heavy Lifter ₹ 2,58,180/- 3. OM Lifter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir returns of income, hence for the said reason also no disallowance of the aforesaid expenditure could be made under Sec. 40(a)(ia) of the IT Act. However, the CIT(A) held a conviction that as the cranes were taken on hire by the assessee, hence it was liable to deduct tax at source under Sec. 194C of the IT Act while making the payments towards the hiring charges to the aforesaid parties. Further, the CIT(A) observed that as the contention of the assessee that the payees had included the aforesaid receipts in their returned income and paid tax on the same was not supported with any evidence, thus the same could not be summarily accepted. On the basis of his aforesaid deliberations the CIT(A) upheld the disallowance of ₹ 9,50,600/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had failed to deduct tax at source under Sec. 194C of the IT Act on the payments made towards hiring charges of cranes, hence the A.O had rightly disallowed the said amount under Sec. 40(a)(ia) of the IT Act. 7. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. The issue involved in the present appeal lies in a narrow compass i.e. as to whether the payments towards hiring charges of cranes would be liable for deduction of tax at source under Sec. 194C of the IT Act, or not. We find that as per the provisions of Sec. 194C any person responsible for paying any sum to any resident (hereafter referred to as contractor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requirement or specification of a customer by using material purchased from a person, other than such customer. We are persuaded to subscribe to the contention advanced by the Ld. A.R that a simpliciter payment towards hiring charges of cranes cannot be brought within the sweep of the definition of the term work as envisaged in Sec. 194C of the IT Act. We thus are of the considered view that the lower authorities had erred in concluding that as the assessee had failed to deduct tax at source under Sec. 194C of the IT Act on the payments made towards hiring charges of cranes aggregating to ₹ 9,50,600/-, hence the said amount was liable to be disallowed under Sec. 40(a)(ia) of the IT Act. In our considered view, as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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