2011 (1) TMI 1104

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....e order passed under section 201(1) read with section 194C(1) of the Income-tax Act of Rs. 17,74,378 ?"   2. The assessment year is 2007-08. The assessee is engaged in the business of transportation of building material, salt, black trap, iron, etc. During the course of verification, it was found that the assessee had taken dumpers on hire/rent from various parties. During the year under consideration, the assessee had paid Rs. 1,18,29,647 as rent for hiring of dumpers and deducted TDS at the rate of 1.12 per cent. which comes to Rs. 1,33,627 which, according to the Assessing Officer, was not correct as the assessee has taken dumpers on hire/rent and such payments were governed under section 194-I of the Act. The Assessing Officer a....

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.... nature of contracts, the assessee had produced various bills issued by such sub-contractors to show that the contracts were mainly carried out for shifting of goods from one place to another. The Commissioner (Appeals) also found that the charges were collected by sub-contractors on the basis of the quantity of goods transported and the number of trips carried out ; the assessee had not acquired dumpers on rent or lease ; and that the possession and control of vehicles was with the sub-contractors, who only provided services of shifting of goods from one place to another place. It was noted that evidence in support of the above was submitted to the Assessing Officer during assessment proceedings. In the background of the aforesaid findings....

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....t thereof in cash or by issue of cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to the percentage specified thereunder of such sum as income-tax on income comprised therein.   7. Section 194-I of the Act which bears the heading "Rent" provides that any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of cheque or by draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate specified thereunder.   8. Thus, section 194C of the Act makes provision for deduct....