ITAT Delhi affirms CIT(A)'s order on tax deduction for bus hire payments, dismissing Revenue's appeals.

The Appellate Tribunal ITAT Delhi dismissed both Revenue's appeals challenging the CIT(A)'s order directing deduction of tax at source under section 194C instead of 194I for payments made by the assessee for hiring buses. The Tribunal relied on precedents and upheld the CIT(A)'s decision, emphasizing that tax should be deducted under section 194C in such cases. The judgment was pronounced on 20.04.2017, affirming the CIT(A)'s direction and dismissing the Revenue's appeals.

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Issues:
- Dispute over deduction of tax at source under sections 194C and 194I for payments made by the assessee for hiring of buses.

Analysis:
The judgment by the Appellate Tribunal ITAT Delhi involved two appeals by the Revenue concerning the Financial years 2007-08 and 2008-09, challenging the common order passed by the CIT(A) on 02.03.2010. The sole issue raised by the Revenue was regarding the direction given by the CIT(A) for deduction of tax at source under section 194C instead of section 194I from the payments made by the assessee for hiring buses.

Upon considering the rival submissions and perusing the relevant material on record, it was noted that the assessee had paid for hiring buses and deducted tax at source under section 194C at 2%. However, the Assessing Officer treated the payment as 'Rent' and directed the deduction of tax at source under section 194I at 10%. The Tribunal referred to a similar case before the Agra Tribunal involving UPSRTC, Aligarh, where it was upheld that tax should be deducted at source under section 194C in similar circumstances. A judgment by the Hon'ble Allahabad High Court in CIT (TDS) vs. UPSRTC also supported this view. Consequently, the Tribunal found that the CIT(A) was justified in directing the deduction of tax at source under section 194C.

As a result, both appeals by the Revenue were dismissed, and the order was pronounced in the open court on 20.04.2017.

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