9911796707
TMI Blog2011 (1) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... 194-I and 194J in the place of section 194C, in case of payments made to bus operators providing pick and drop facility to school students. 3. That the learned CIT(A) and ACIT, TDS, Noida have erred in interpreting the definition of rent and service contract for transportation. 4. That the learned CIT(A)/ACIT, TDS, Noida have erred in applying the provisions of section 194J in place of section 194C for payments made to coaches providing coaching of horse riding, tennis and golf service as the same are not professional services, as defined under section 44AA of the Income Tax Act. 5. That consequent demand raised by ACIT is wrong and bad in law. The applicant craves leave to add or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nning of the buses. The transporter was to ensure the punctuality and in case such punctuality was not observed and the buses arrived 10 minutes or more late, then the transporter has to pay the penalty of Rs. 300 per bus for per ten minutes of late coming. The transporters were under an obligation to employ experienced drivers not below the age of 35 years and the licensed conductors and they were required to maintain the buses as per the directions of Hon'ble Supreme Court of India and the buses so plied were to have certain necessary facilities and in case of hike in the fuel prices being more than 8% of the cost, then the amount payable to the transporter will be raised proportionately. Thus, the bare perusal of the agreement will show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act and therefore, the case of assessee would fall u/s 194I of the Act and the payment so made by the assessee to those transport contractors are liable for deduction of tax at the rate of 10% instead of 2% deducted by the assessee and therefore, there is a short deduction of tax for which the AO has raised the demand alongwith interest under the provisions of section 201(1) and 201(1A) of the Act. The stand of the AO has been confirmed by the CIT(A). The assessee is still aggrieved and hence has raised ground Nos. 2 & 3 in the aforementioned appeals. 4. Relying upon the submissions made before the AO and CIT(A), it has been the case of the learned AR that such payments would not fall within the ambit of section 194I of the Act. Lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goes by the logic adopted by the AO, then the same will also be equally applicable in respect of section 194C where also under Explanation-Ill to sub-section (2) of section 194C, the "work" has been defined or explained which according to clause (c) thereto includes "carriage of goods and passengers by any mode of transport other than by railways". According to the transport contract entered into by the assessee, the activity of the transport contractor will be a simple activity of carriage of passenger by any mode of transport other than by railways. The object of the assessee to enter into such agreement was a simple activity of carrying its students and staff from their homes to the school and similarly from school to their homes. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act in place of assessee's claim that it is liable for deduction of tax at source u/s 194C of the Act. 8. At the time of hearing, learned AR did not press the issue relating to deduction of tax in respect of tennis and golf services. Hence, the remaining issue is in respect of horse riding. It is the case of learned AR that assessee had entered into a contract with M/s Mustang Riding School whereas the said party was required to provide five horses for Rs. 10,000/- per horse per month throughout the year alongwith qualified and experienced instructor to teach the children horse riding. They were also required to provide manpower for maintaining the horses. They were also required to provide feeding, watering, vet cover, medicines and ever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also to provide manpower for maintaining the horses. Their responsibility was not limited only to provide the facility but they were to provide technical qualification of horse riding to the students of the assessee school. Therefore, we are of the opinion that learned CIT(A) has rightly upheld the action of AO for applying rate of deduction of tax for such an activity and this claim of the assessee is dismissed. It has already been pointed out that learned AR did not press the issue regarding deduction of tax in respect of tennis and golf services. Therefore, ground No. 4 in both the appeals is dismissed. 11. The other grounds are general grounds which need no separate adjudication. 12. In the result, the appeals filed by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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