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2012 (7) TMI 367 - AT - Income TaxDeduction of tax at source on hiring of buses - applicability of section 194C or 194-I? - Held that:- Considering the Bulk Petroleum Products Road Transport agreement the arrangement for transportation of petroleum products was essentially a contract for transportation of goods and not an arrangement of hiring of vehicles. Thus tax is required to be deducted at source from the payments to the carrier in terms of provisions of sec. 194C and not u/s 194-I - there is nothing to indicate that the assessee has taken trailers/cranes on rent so as to attract the provisions of section 194-I and assessee had given sub-contracts for transportation of goods, thus the said transactions would fall within the purview of section 194C as the assessee was responsible for paying the amount in question for carrying out work in pursuance of contracts between the assessee and the transporters and as such was required to deduct tax at source at the rate prescribed @ 2% - when the contract agreement is read clause-by-clause, it becomes abundantly clear that there is no transfer of the right to use the vehicle involved in the contract agreement and that the contract agreement is merely for carriage of the petroleum and petroleum products and nothing more - in favour of assessee.
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