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2013 (12) TMI 546 - HC - Income TaxTDS u/s 194C or 194I - disallowance u/s 40(a)(ia) for short deduction of TDS - agreement for hire of vehicles and to be used for loading and unloading and transport of the products - The party of the first part (the owner of the vehicles) was to retain the custody, ownership and possession of the vehicles. The vehicles were to be driven and operated by the persons who were to be paid by the owner. - Held that:- As correctly found by the tribunal, the agreement does not require the owner of the vehicle to do any work at all. It is the assessee who makes use of the vehicles and the equipment. He pays hire charges on the basis of the number of hours of use and thus clearly the appellant is not justified in contending that Section 194C applies. Section 194-I specifically contemplates liability with any person paying rent to deduct in come tax at the rate of ten per cent for the use of any machinery or plant or equipment. (As far as the assessment year in question is concerned, the rate of tax was increased to ten per cent). - Decided against the assessee. No basis for confining the effect of the words "other agreement or arrangement for the use of" "either separately or together" in regard to the machinery, only if it is part of immovable property. The Legislative intent is clear, in that, it intends liability to deduct tax in respect of "any machinery or plant or equipment". The machinery need not be the machinery annexed or immovable property otherwise under the Transfer of Property Act. - Decided against the assessee.
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