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M/s Gangwal Carriers Pvt.Ltd., Pvt.Ltd., 9A-G-43, Ganesham Plaza,Central Spine, Vidhyadhar Nagar, Jaipur. Vs. Income Tax Officer, Ward-12(1), New Delhi.
October, 29th 2014
                                 `C' : NEW DELHI
                    DELHI BENCH `C

                            VARKEY, JUDICIAL MEMBER
                SHRI ABY T. VARKEY,

                          ITA No.492/Del/2013
                       Assessment Year : 2007-

M/s Gangwal Carriers           Vs.    Income Tax Officer,
Pvt.Ltd.,                             Ward-12(1),
9A-G-43,                              New Delhi.
Ganesham Plaza,
Central Spine,
Vidhyadhar Nagar,
     (Appellant)                          (Respondent)

             Appellant by       :    Shri P.C. Parwal, CA.
             Respondent by      :    Smt. Parminder Kaur, Sr.DR.


         AGRAWAL, VP :
     This appeal by the assessee is directed against the order of
learned CIT(A)-XV, New Delhi dated 27th November, 2012 for the AY

2.   The only ground raised by the assessee reads as under:-

      "The ld. Commissioner of Income Tax (Appeals) has
      erred on facts and in law in confirming addition of
      Rs.2,43,000/- u/s 40(a)(ia) u/s 194I for non deduction of
      tax at source on amount credited to the account of
      Kamal Kishore Khetan towards hire charges of JCB
      machine upto 17.05.06 by holding that though the
      deduction on rent of machinery or plant or equipment is
      brought into statute from 13.07.06, since payment is
      made subsequently tax was liable to be deducted at the
      time of payment even if it was not deductible at the
      time of credit."

3.   We have heard the arguments of both the sides and perused
relevant material placed before us. The Assessing Officer has made a
                                    2                          ITA-492/Del/2013

disallowance of `2,43,000/- under Section 40(a)(ia) of the Income-tax
Act, 1961 on the ground that the assessee failed to deduct the tax
under Section 194I from the payment of rent. It was pointed out by the
learned counsel that the above rent was paid for hiring of JCB machine.
The rent was for the period 1.4.2006 to 17.5.2006. That the definition
of `rent' given under Section 194I has been modified with effect from
13.07.2006. Before the modification of the definition, the hire charges
for the machinery were not considered as rent but only the rent on the
leasing of immovable property was considered as rent.         We find the
submission of the assessee to be factually correct. We, therefore, hold
that the assessee was not liable to deduct the tax under Section 194I
in respect of the rent paid for hiring of JCB machine prior to
13.07.2006.   Accordingly, we delete the disallowance under Section
40(a)(ia) of the Act amounting to `2,43,000/-.

4.    In the result, the appeal of the assessee is allowed.
      Decision pronounced in the open Court on 21st October, 2014.

                  Sd/-                                 Sd/-
         (ABY T. VARKEY)                               AGRAWAL)
                                                 (G.D. AGRAWAL)
        JUDICIAL MEMBER                          VICE PRESIDENT

Dated : 21.10.2014

Copy forwarded to: -

1.    Appellant    : M/s Gangwal Carriers Pvt.Ltd.,
                     9A-G-43, Ganesham Plaza, Central Spine,
                     Vidhyadhar Nagar, Jaipur.

2.    Respondent : Income Tax Officer,
                   Ward-12(1), New Delhi.
3.    CIT
4.    CIT(A)
5.    DR, ITAT

                              Assistant Registrar
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