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2017 (4) TMI 1262 - AT - Income TaxTDS u/s 194C OR u/s 194I - payments made by the assessee for hiring of buses - Held that - As decided in CIT (TDS) vs. UPSRTC 2014 (8) TMI 462 - ALLAHABAD HIGH COURT the Tribunal has rightly held that the contract would indicate that the assessee has not taken possession of the buses - the Tribunal was correct in coming to the conclusion that the provisions of Section 194-C and not Section 194I of the Act were attracted - the agreement between the assessee and the transporters was not akin to the taking of any plant or machinery on lease or any other similar arrangement - the assessee had correctly deducted tax at source u/s 194C of the Act. - Decided against revenue
Issues:
- Dispute over deduction of tax at source under sections 194C and 194I for payments made by the assessee for hiring of buses. Analysis: The judgment by the Appellate Tribunal ITAT Delhi involved two appeals by the Revenue concerning the Financial years 2007-08 and 2008-09, challenging the common order passed by the CIT(A) on 02.03.2010. The sole issue raised by the Revenue was regarding the direction given by the CIT(A) for deduction of tax at source under section 194C instead of section 194I from the payments made by the assessee for hiring buses. Upon considering the rival submissions and perusing the relevant material on record, it was noted that the assessee had paid for hiring buses and deducted tax at source under section 194C at 2%. However, the Assessing Officer treated the payment as 'Rent' and directed the deduction of tax at source under section 194I at 10%. The Tribunal referred to a similar case before the Agra Tribunal involving UPSRTC, Aligarh, where it was upheld that tax should be deducted at source under section 194C in similar circumstances. A judgment by the Hon'ble Allahabad High Court in CIT (TDS) vs. UPSRTC also supported this view. Consequently, the Tribunal found that the CIT(A) was justified in directing the deduction of tax at source under section 194C. As a result, both appeals by the Revenue were dismissed, and the order was pronounced in the open court on 20.04.2017.
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