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2012 (11) TMI 806 - AT - Income TaxTDS on payment made for hiring of buses - Section 194-C OR Section 194-I - Held that:- The expression “carriage of goods and passengers by any mode of transport” finds place only in section 194 C and not in section 194-I. There is no direction that TDS on transport contracts will be made u/s 194-I instead of u/s 194C there is even no omission of clause © of Explanation III of subsection (2) of section 194C, after the aforesaid amendment in section 194-I in Explanatory Notes (Circular No. 1/2007 dated 17.04.2007). Thus according to well established rules of interpretation, specific provisions prevail over general provisions. Section 194C contains specific provisions for deduction of tax in the cases of transport contracts whereas Sec. 1941 contains general provisions for deduction of tax from rent in respect of hiring of machineries, plants etc. Therefore deduction was rightly made u/s 194C in this case As in this case the Transporters have not given the buses for exclusive use by the appellant the use is only for point to point transportation to students/staff to and from only for convenience sake & after the specified period of use, the buses are kept under the control of the operators and not of the appellant organization, thus it implies that the main object is transportation of passengers and not complete hiring of the particular vehicle, thus the payment made to the traveling agencies for vehicle hiring is covered by the provisions of section 194-C and not by the provision of section 194-I - in favour of assessee.
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