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2014 (7) TMI 247 - AT - Income TaxPayment made for hiring of buses - Short deduction of TDS u/s 194C of the Act – Liability to deduct tax u/s 194I @ 10% - Held that:- CIT(A) rightly of the view that the contract entered by the assessee with the transport service provider is primarily in the nature of transport contract/service contract for providing travel facility of school children to and from the School of the assessee and not for hiring the vehicles – assessee itself has not utilized the vehicles but they were used by the transport contractors for fulfilling the obligations set out in the agreement - the running and maintenance expenditure is borne by the transport service providers who are also responsible for making all other arrangements, the nature of contract entered cannot be termed as contract for hiring of the vehicles - the provisions of Sec.194I of the Act are not applicable since the expression plant and machinery used in explanation to Sec. 194I refers to plant and machinery used by the assessee in its business by hiring them but not hiring of transport services. As per the transport contracts, the activity of transport contractor will be a simple activity of carriage of its school children by any mode of transport other than by railways - transport contracts would be covered by Sec. 194C and not Sec. 194I – Relying upon ACIT (TDS) Versus Delhi Public School [2014 (1) TMI 176 - ITAT DELHI] - the provisions of section 194C are applicable - The assessee has deducted TDS as per section 194C of the Act - there was no fault in the order of the CIT (A) – Decided against Revenue.
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