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TMI Blog2021 (9) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... .No.6/Mds/2014 in I.T.A.No.2229/Mds/2013, for the Assessment Year 2009-10. 2.The appeals were admitted on 23.02.2015 to decide the following substantial questions of law : "1.Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the provision of Section 194C of the Income Tax Act will not be applicable in respect of the payment made by the assessee towards transport of goods by way of hiring the vehicle? 2.Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the provision of section 40(a)(ia) will not be applicable to the assessee case by holding that there is no contractual liability between the assessee and lorry owner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 40(a)(ia) of the Act would not be attracted to the assessee's case. Certain other factual aspects were also placed and more particularly to state that, there was no written contract nor any contract as presumed by the Department between the lorry owners/drivers and the assessee, and where ever it was feasible, TDS has been deducted, and only in cases where payments were made to the lorry owners, there is no feasibility of deducting any Tax at Source. The Assessing Officer was not convinced with the reply given by the assessee and accordingly, completed the assessment by order dated 24.12.2011, disallowing the payments with regard to lorry hire charges. 5.Aggrieved by the same, the assessee preferred an appeal before the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is deemed to have been a sub-contract between the assessee and the lorry drivers. Admittedly, there is no material available on record before the Assessing Officer to come to such a conclusion or even come to such a prima facie conclusion. The Assessing Officer proceeded to hold that there should have been an agreement between the assessee and the lorry drivers and it is not necessary to have any written agreement, because there was an agreement between the assessee and the Cement Company for transportation of Salt and Gypsum from Tuticorin. The correctness of the said stand was examined by the CIT(A) and it was found that there was no material on record to draw any such inference against the respondent/assessee. The correctness of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deduct Tax at Source. Per contra, the Department/Revenue contended that the material on record clearly discloses that the vehicles are hired by the assessee from the various owners of the vehicles only to discharge the obligation under the contract between the assessee and other customers. On facts, the Court found that the assessee therein had entered into a contract to supply vehicles to M/s.Mahindra and many other companies under written contract on various dates and only to perform the obligation under the said contracts, he had hired vehicles from the sub-contractors under the written contract and the liability to deduct TDS arises under Section 194C(2) of the Act. Furthermore, while testing the correctness of the stand taken by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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