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2013 (2) TMI 606 - ITAT HYDERABADApplicability of Sec 194C - TDS provision on machinery hire charges prior to 13.7.2006 - whether the addition made by the AO has rightly been deleted by the learned CIT(A), holding that the provisions of s. 194C are not attracted - Held that:- Provisions of section 194C are applicable when the contract is entered into (i) for carrying out any work and (ii) supply of labour to carry out any work. Therefore, the main condition prescribed in s. 194C is that there must be carrying out of any work whether tangible or intangible. In the instant case, the assessee was not under an obligation to carry out the work as it was not under the control of the lender and the possession of the machinery temporarily was passed to the assessee after entering into agreement with the lender. Therefore, in the present case, taking of the machinery and equipment on hire would not amount to a contract for carrying out any work as contemplated in s. 194C. The said contract i.e. taking of machinery and equipment on hire also cannot be treated with a contract for supply of labour. Therefore, the provisions of s. 194C were not applicable to the facts of the assessee's case, as such no disallowance was called for under s. 40(a)(ia) of the IT Act. See CIT Versus Poompuhar Shipping Corporation Ltd.(2006 (1) TMI 60 - MADRAS HIGH COURT) The provisions of section 194-1 are not applicable to the facts of the present case because the previous year relevant to the assessment year under consideration ends on 31st March 2006 while insertion of the words "machinery or plant or equipment" has been made effective from 13th July, 2006 i.e. much after the end of the previous year relevant to the assessment year under consideration. Therefore, the provisions of s. 194-1 of the Act are also not applicable to the facts of the present - in favour of assessee.
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