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2011 (3) TMI 812 - AT - Income TaxApplicable rate of TDS u/s 194D or 194I - Assessee in default - The assessee had hired the cars on fixed rent payment owned and maintained by contractor - The assessee paid vehicle hire charges and all the expenditure are borne by the contractor - It is also admitted fact that vehicle charges were paid in connection with plying of employees from one place to another - Thus, it implies that the passengers were transported by the drivers and vehicles of the vehicle owner/contractor and in consideration of that the vehicle owners/contractors were paid by the assessee the fixed amount - The above payment of vehicle hire charges clearly falls within the scope of section 194C of the Income-tax Act - The assessee, therefore, correctly deducted tax thereof as per the provisions of section 194C (Explanation (iii)(c)) of the Income-tax Act. Therefore, provisions of section 194-I has been wrongly applied in the matter by the Assessing Officer - Accordingly, set aside the orders of the authorities below and delete the demand and the interest - Thus,the appeal of the assessee is allowed.
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