Applicability of section 44ae

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This query is : Resolved

SIDDHARTH KOTHARI (Querist)

06 January 2012 The assessee(Mr.X) is owning less than 10 goods carriages but he has given the said goods carriages on rent to other person(Mr Y.)Mr Y is paying the mnothly rent and using these goods carriages for the purpose of carrying the business of plying of goods carriages.

1) To whom Sec 44AE will be applied?
2) Mr X receiving the rent more than 10 lacs from Mr y for said goods carriages .Whether Mr X is laible to collect the service tax and if yes, then under which service he has to register him self?
3) Whether Mr Y is liable to deduct the tax at source on assumption that the gross receipts in previous year is more than 60 lacs eventhough Mr X has provided his PAN?and if yes,then under which section whether 194C or 194I?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

07 January 2012 My reply is limited to the IT matters only.

1. Section 44AE is applicable to the owner of the trucks.
3. TDS applicable U/s 194I as it is the case of pure leasing. It is clear that Y maintains and operates the trucks.

CA. Krishna K Neeraj

CA. Krishna K Neeraj (Expert)

07 January 2012 2. X is required to get registered under the head " right to use tangible goods services"

SIDDHARTH KOTHARI

SIDDHARTH KOTHARI (Querist)

07 January 2012 Sir,
Can we consider Goods Carriages as the "GOODS" because neither we in trading of the same nor we consider as closing stock.We are just giving them on rent.We claim the depreciation on the same.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

07 January 2012 Of course it is goods for those who are dealing in and manufacturing carriages. You may refer the definition of "goods" in Sale of Goods Act also. On goods depreciation can not be claimed as it is a trading asset. It is to be taken as Carriage.

CA Sanjeev Kr Jain

CA Sanjeev Kr Jain (Expert)

11 January 2012 NOT REQUIRED FOR SER TAX AS CONTROL OF TRUCKS ARE NOT WITH THE OWNER IN SUCH CASE VAT (IN DELHI) MAY BE APPLICABLE

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