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TMI Blog2011 (9) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... ief, the solitary issue is whether assessee has to deduct TDS under sec. 194C or 194I of the Income-tax Act, 1961 on the payments made to the transporters who have plied their busses for transporting the employees and their wards to different destination as per the agreement between the assessee and the transporters. 2. In a very brief order passed under section 201(1) and 201(1A) of the Act, Assessing Officer has observed that the payments made by the assessee to travel agencies for hiring the vehicles would be subject to deduct of TDS under sec. 194I of the Act. The brief order passed by him reads as under: " The accounts verification of TDS matter was conducted in the office of NCPS, NTPS Limited, Vidyut Nagar, Dadri District G.B. Nag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to be deducted u/s. 194 I for F.Y. 2007-08 as per list enclosed. After considering all facts & circumstances of this case I believe that the DDO was under legal obligation to deduct tax u/s. 194 J and 194 I of the Income-tax Act, 1961 on the above payment. Therefore, I impose tax u/s. 201(1) of the Income-tax Act, 1961 and interest thereon u/s. 201(1A) as per detail. Issue penalty notice u/s. 221 C of the I.T. Act, 1961 and issue notice of demand and challan accordingly". 3. On appeal, Learned CIT(Appeals) has held that the payments made to travel agencies are not covered by section 194 I rather they fall within the ambit of sec. 194C of the Act. He made a reference to Sr. No.(vi)(c) of the Explanation appended to this section. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to outside producer for programs under "commissioned category" for which the assessee had been deducting the tax at source under sec. 194C by treating them as contract payment. Assessing Officer alleged that it is fee for professional services or fee for technical service within the ambit of sec. 194J and, therefore, assessee ought to have deducted TDS under sec. 194J of the Act. Learned CIT(Appeals) dismissed the appeal of the assessee. The issue travelled to the ITAT. The ITAT has observed that Explanation 3 of section 194C provides the meaning of expression "work" which includes advertising, broadcasting and telecasting including production of programming for such broadcasting and telecasting. According to the ITAT, a specific provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the contract, the travel agency has to ply the bus for a fixed number of hours. Thus, it is a simplicitor service contract for transportation of the passengers and it falls within the ambit of clause (c), Sr. No.(IV) of explanation appended to sec. 194C. The assessee has placed on record copy of a letter of award for hiring of busses. It has also placed on record copy of the contract entered on Ist of February 2008. On perusal of these documents, it reveals that assessee has just hired the transportation facilities which is akin to hiring of a taxi though on regular basis for a fixed number of hours. Before the Learned First Appellate Authority, assessee has made a reference to Circular No. 558 dated 28.3.1990 issued by the CBDT. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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