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2014 (9) TMI 51 - HC - Income TaxTDS deduction u/s 194C @ 2% or u/s 194I – Buses on hire given for exclusive possession for a period of 2 years - Application of Board circular no. 558 dated 28 March 1990 when the Board Circular was issued prior to the introduction of Section 194(A) - Held that:- In Circular No.558 dated 28 March 1990, the Board clarified that the provisions of section 194C would have to be examined with reference to the terms and conditions of each contract – Held that:- The Tribunal did not commit any error of law in invoking section 194C which provides under Explanation III that work includes the carriage of goods and passengers by any mode of transport other than by railways – relying upon Assistant Commissioner of Income Tax (Tds) Versus M/s. Lotus Valley Education Society [2013 (9) TMI 976 - ALLAHABAD HIGH COURT] - on comparison of the two explanations added to Sections 194-I and 194-C of the Act, it was never the intention of the legislature to overlap any of the items mentioned within the meaning of 'rent', by including the same within the meaning of 'work' under Section 194-C of the Act. Also in Three Star Granites (P.) Ltd. Vs. Assistant Commissioner of Income Tax [2013 (12) TMI 546 - KERALA HIGH COURT] it has been held that 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 - all the work under the contract was required to be done by the assessee itself and no work within the meaning of section 194C was done by the owner of the vehicle - thus, the Tribunal was correct in holding that the liability of the assessee was to deduct tax at source u/s 194C and not u/s 194I – Decided against Revenue.
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