In the case of M/s. Ratnagiri Impex Pvt. Ltd. Versus Dy. Commissioner of Income Tax - 2015 (1) TMI 354 - ITAT BANGALORE  Tribunal held that,

The assessee has not hired services of any event organizer - It simply booked the hotel for boarding - The hotel did not work on behalf of the assessee as a contractor - Otherwise every guest whosoever stay in a hotel ought to have deducted TDS while making booking or staying in it – following the decision in The East India Hotels Ltd. & Jaswant Singh Bhatia Versus CBDT and UOI [2009 (3) TMI 8 - BOMBAY HIGH COURT] - section 194 C is not applicable for payments made by the customer to the hotel - the facilities/amenities made available to its customers do not constitute 'work' within the meaning of section 194C of the Act - the circular No.681 dated 8/3/1994 to the extent it holds that the services made available by a hotel to its customers are covered under section 194C of the Act must be held to be bad in law

Long back, Mr. M Govindarajan has written an article published on taxtmi.com as on 10-2-2010 on this issue explaining various aspects.

See:-

M/s. Ratnagiri Impex Pvt. Ltd. Versus Dy. Commissioner of Income Tax - 2015 (1) TMI 354 - ITAT BANGALORE

NO TAX WAS REQUIRED TO BE DEDUCTED BY A PERSON MAKING PAYMENT TO THE HOTEL FOR AVAILING OF THE FACILITIES/AMENITIES PROVIDED BY THE HOTEL

TDS under section 194C: payments by customers to hotels for amenities are not treated as contractor payments for withholding. Payments by a customer to a hotel for accommodation, boarding or use of amenities, where no contractor or event-organiser relationship exists, do not constitute 'work' within the meaning of section 194C; accordingly such ordinary guest payments are not subject to TDS under that provision, and administrative guidance treating hotel facilities as contract work is open to challenge.