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2014 (12) TMI 924 - AT - Income TaxHiring of buses treated as hiring of machinery U/S 194-I or u/s 194C Assessee in default u/s 201 - Hired buses were governed under the contracts and "carrying out a work" as explained in section 194 C - no fix rental was paid but the payment made to the contractors was on the mileage basis Held that:- Following the decision in ITO vs Regional Manager, UPSRTC, Saharanpur [2011 (5) TMI 892 - ITAT DELHI] it has been held that the payments made by the assessee would fall under the category of carriage of goods and passengers by any mode of transport other than railways and not under rent - provisions of section 194C of the Act will be applicable - the assessee had taken the buses on hire on payment made on kilometer running basis - The owner was responsible for running cost, maintenance, driver cost and other incidental charges like accident etc. - Therefore, the assessee has not taken the plant or machinery on rent. The definition of word work is clear in Explanation III (c) attached to sub-section (2) of section 194-C of the Act which makes it clear that it includes carriage of goods or passengers by any mode of transport other than by railways - Therefore, payment made by the assessee would certainly fall under the category of carriage of goods and passengers by any mode of transport other than railways and the same does not fall under the definition of rent related to section 194I of the Act - assessee has not taken the plant or machinery on rent but assessee is making payment towards hiring charges paid to the transporter for carriage of goods and passengers by any mode of road transport Decided in favour of assessee. Deletion of penalty u/s 271(1)(c) Held that:- Since in the quantum appeal of the assessee for the same assessment years has been decided in favour of assessee, the payment made by the assessee to the transporters for carrying of passengers by road transport falls within the ambit of section 194C of the Act and the assessee was right in deducting the TDS u/s 194C of the Act, therefore, the penalty imposed by the AO on account of lower rate deduction of TDS is certainly not sustainable Decided against revenue.
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