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2014 (1) TMI 179 - AT - Income TaxApplicability of section 194C of the Act – Payment made for hiring of buses – Laibility to deduct tax u/s 194-I of the Act – Held that:- Following [2014 (1) TMI 386 - ITAT DELHI] - The services were rendered by the contractor through their own man using the cranes - The cranes were brought to the respective sites and they were operated by the staff of the contractor - Thus, assessee has not taken any machinery on hire for which it has paid the rent – It is a simplicitor service contract for transportation of the passengers and it falls within the ambit of clause (c), Sr. No.(IV) of explanation appended to sec. 194C – the assessee has just hired the transportation facilities which is akin to hiring of a taxi though on regular basis for a fixed number of hours - where a vehicle is given on hire along with provisions of a driver for use of carrying of the passengers for fixed hours than it is a service contract for carrying out the work. It will be covered under sec. 194C of the Act because the vehicle has been made available as a matter of service – thus, it is a service contract and assessee was to deduct tax under sec. 194 C of the Act - The assessee has availed the services of cranes which was operated by staff of the contractor – Thus, the Assessing Officer has erred in construing that assessee had paid rent and its case falls u/s 194I – the assessee had rightly deducted tax at source u/s 194C of the Act – Decided against Revenue.
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