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TMI Blog2022 (12) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... A)-8/124/15-16, in proceeding u/s. 201(1)/201(1A) vide order dated 23/08/2019 passed for the assessment year 2009-10. 2. The assessee has raised the following grounds of appeal:- Grounds of Appeal Tax effect relating to each Ground of appeal (see note below) 1 The CIT(A) erred in law and on facts in confirming the action of the Assessing Officer to treat the appellant 'assessee in default' within the meaning of section 201(1) and thereby confirming the demand of Rs.2,89,990/- u/s.201(l) and interest thereon of Rs.2,08,800/- u/s.201(lA) of the I.T. Act, 1961. Rs.4,98,790/- 2. The CIT(A) erred in law and on facts in deciding the appeal of the assessee 'exparte'. ----- The appellant craves leave to add, amend or alter the aforesaid grounds of appeal at the time of hearing, if the need arise. ----- Total tax effect (see note below) Rs.4,98,790/- 3. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TAT order in assessee s own case for very same assessment year i.e. 2009-10 in ITA No. 1410/Ahd/2014 wherein the ITAT has deleted the disallowance made by the Assessing Officer in the 143(3) proceedings on the ground that in the instant set of facts, there was no liability on the assessee to deduct taxes on payments made to transporters. The counsel for the assessee has furnished the copy of said order for the purpose of our records. On perusal of the order, we observe that the issue has been decided in favour of the assessee by ITAT Ahmedabad in assessee s own case for A.Y. 2009-10 vide ITA No. 1410/Ahd/2014 dated 12-10-2022. The relevant extracts of the order are reproduced for reference:- 5. We have heard the arguments of both the sides and also perused the relevant material available on record. As agreed by the learned representatives of both the sides, the issue raised in Ground No.1 of this appeal is squarely covered in favour of the assessee by the order of the ITAT passed in the case of father of assessee Shri Dilip C. Palany Vs. ITO in ITA Nos. 1393 to 1399/Ahd/2014 rendered vide its common order dated 06.07.2017 passed for AYs 2005-06, 2007-08 to 2009-10, wherein a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kers was also hiring the tankers from outside parties as and when required. In such a case of hiring from outside, the responsibility of successful completion of transportation work rested upon the appellant. From the record or the findings of the authorities below no where it is borne out that there was any kind of written or oral contract with the principals by such outside tank owners that they will share the risk and responsibility with the appellant. 8.1 At this stage, it is not in dispute that the department's case is that in the present case provisions of section 194C(1) are applicable and not section 194C(2). Once it is held that it is a case of 194C(1) then it would be sent that this section applies to any payment made to a person for carrying out any work in pursuance of a contract between the contractor and the person making the payment. If the condition of carrying out any work in pursuance of a contract is not fulfilled then the provisions of this section will not be applicable at all. Here in this case, the contract for carrying out the work was between the BPCL and the appellant. The appellant alone had risk and responsibility for carrying out the contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shipping companies for a fixed period on payment of hire charges. The hired ships were utilised by the assessee in the business of carrying the goods from one place to another in pursuance of an agreement entered into between the assessee and the Tamil Nadu Electricity Board. There was no agreement for carrying out any work or transport any goods from one place to another between the assessee and the other shipping companies. The assessee- company simply hired the ships on payment of hire charges and it was utilised in the business of the assessee at their own discretion. It is not the case of the Revenue that the assessee entered into the said contract with the shipping company for transport of coal from one place to another. The hiring of ships for the purpose of using the same in the assessee's business would not amount to a contract for carrying out any work as contemplated in section 194C. The term hire is not defined in the Income-tax Act. So, we have to take the normal meaning of the word hire . Normal hire is a contract by which one gives to another temporary possession and use of the property other than money for payment of compensation and the latter agrees to ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.40(a)(ia) by the authorities below are deleted. The appellant thus gets relief of Rs.56,03,210/-. 7. We also adopt the same reasoning to conclude that both the lower authorities have erred in making the impugned Section 40(a)(ia) disallowance on the freight payment in question without indicating any material that assessee s payees had made themselves liable for any risk involved in transportation of goods concern. We therefore delete the abovestated disallowance of Rs.5,50,10,978/-. 5.1 As the issue involved in the present case as well as all the material facts relevant thereto are similar to the case of Dilip C. Palany (supra), we respectfully follow the decision rendered by the Co-ordinate Bench of this Tribunal in the said case and delete the disallowance made by the Assessing Officer and confirmed by the learned CIT(A) under Section 40(a)(ia) of the Act. 5.1 Respectfully following the above order, since the issue has been decided in favour of the assessee in the assessee s own case in quantum proceedings u/s. 143(3) of the Act, we are hereby directing that the demand u/s. 201(1)/201(1A) of the Act is liable to be deleted. 6. In the result, the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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