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Case Law Details

Case Name : CIT Vs P. Sumathi (Madras High Court)
Appeal Number : T.C.A. Nos. 30 and 31 of 2015
Date of Judgement/Order : 18/08/2021
Related Assessment Year : 2009-10
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CIT Vs P. Sumathi (Madras High Court)

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 the assessee, the Court considered the factual position that the assessee is providing vehicles to one of its customers, M/s. Mahindra Group, and in Clause-5 of the written agreement between the parties, a condition has been stipulated that provision of services would involve providing vehicles owned by the assessee or associates of assessee or agents, for transportation of the employees of Thomson Corporation, and further, on facts, it was found that the assessee is owning a fleet of vehicles, which is not sufficient to meet the agreement entered into between the assessee and such individual owners.

Considering these facts, the Court held that there is no necessity for a written agreement between the parties. The facts before us are entirely different, as both the CIT(A) as well as the Tribunal have held on facts that the assessee hired vehicles from the drivers and there was nothing on record to infer any unwritten contract.

For all the above reasons, we find that the Tribunal was right in dismissing the appeal filed by the Revenue and granting full relief to the assessee.

No section 194C TDS on vehicle hired from drivers for Transportation

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