TMI Blog2015 (3) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... port M/s, ITO [2011 (8) TMI 1057 - ITAT BANGALORE] With respect to crane hire charges showed that the payment is not made for any rent or actual movement/transport of goods-arid material and hence, it was rightly treated as contract for carrying of work and tax has been deducted in terms of S.194C. With, respect to DG set, the charges are on hourly basis, as seen from the copies of invoices and not as rent for equipment, The DG set is under the control and operation of the service-provider and the expense on diesel as well as maintenance are borne by the DG owner, In this view of the matter, in respect of these payments also, the provisions of S.1941 are inapplicable, and the assessee has correctly deducted tax in terms of S.194C of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 194I of the Act as the payments made for hiring of vehicles and other equipments come under the definition of rent as provided in Section 194I of the Act. According to A.O, since Assessee had deducted TDS u/s. 194C and not u/s. 194I, there was short deduction of tax. He therefore worked out the short deduction of tax on the basis of payment of rent at ₹ 4,52,09,407/- and also worked out interest u/s. 201(1A) amounting to ₹ 99,46,069/- and thus considered the Assessee to be deemed defaulter under section 201(1) of the Act. Aggrieved by the order of A.O, Assessee carried the matter before CIT(A). CIT(A) vide order dated 29.11.2010 deleted the addition by holding as under:- 5. I have considered the order of the A.O. on the is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the per hour /k.m. payment terms. Accordingly, the same was in the nature of contract payment falling u/s.194C. This submission of the assessee is supported by the decision of Delhi I.T.A.T. in the case of Bhasin Motors India Pvt. Ltd. wherein the installation of machinery and equipments for providing services along with staff was held to be falling u/s194C and not u/s. 194-1. The Circular No.558 dated 28-3-1990 with reference to the payment made by State Road Transport Corporation for hiring of buses is also relevant wherein such payment is held to be falling u/s. 194C. Thus, considering the facts of the case, the payments are not purely in the nature of rent for specific period but for composite services and hence even if the plant and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as short deduction of TDS, the order of A.O needs to be upheld. He thus supported the order of A.O. the ld. A.R. on the other hand reiterated the submissions made before A.O and CIT(A).He further submitted that issue of deduction of tax on the payment made towards drilling services, crane hire charges, D.G. hire charges was also before the Hon ble Hyderabad Tribunal in the case of Heramac Ltd in ITA No. 1342 1343/Hyd/2013. The Hon ble Tribunal has held that tax was deductible u/s. 194C and not 194I. He also placed on record the copy of the aforesaid decision at page 33 to 44 of the paper book and pointed to the relevant paras at page 40 to 42 of the paper book. He also placed reliance on the decision in the case ofCIT vs. Swayam Shipping ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts were paid on hourly basis. (c) The assessee's contention that payments should be treated as contract payments is not acceptable. Accordingly, holding that it is the provisions of S, 1941 and not S.-194C that are applicable to the facts of the payments noted above, the Assessing Officer levied tax towards short deduction of ₹ 5,89,972 under 5.201(1) of the Act, and interest thereon of ₹ 2,83/186 under S.,201(1A) of the Act, in relation to- the above payments by the impugned order. 13. On appeal, the C1T(A) noted that with reference to rig charges, the assessee produced copies of the invoices for the entire amount of ₹ 52, 20, 455. These amounts were paid to M/s. John Energy Ltd. Though the assessee produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the services and and the assess.ee has no control over the same. It is further clear therefrom that the possession and control of the rig always remained with the provider, In the circumstances, in our view, it is only the provisions of S.194C and not provisions of S.194I that are applicable. In this context, we find support from the decision in the case of M/s. Modern Transport M/s, ITO(ITA No.827/Bang/2010) wherein it has been held that when vehicle or equipment are under the control of their owner and not the assessee, and the same are driven/operated by the employees of the owner/contractor, the tax is deductible under S.194C and not under S.194I, In this view of the matter, with respect to rig services, the Assessing Officer has erred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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