TaxTMI 
TaxTMI 
2011 (11) TMI 412
X X X X Extracts X X X X
X X X X Extracts X X X X
....ative in nature. In brief, its grievance is that Learned CIT(Appeals) has erred in upholding the orders of the Assessing Officer in both the assessment years whereby the Assessing Officer has held that assessee ought to have deducted the TDS under sec. 194-I on the payments made to the transporters for hiring of busses instead of TDS deducted @ 2% under sec. 194C of the Act. 2. The brief facts of the case are that the assessee is a government company under the administrative control of Ministry of Defence and manufactures defence equipments for Ministry of Defence. The assessee company is providing pick and dropping facility to its employees through buses from selected point of their residences. For this purpose, it has engaged transport o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....011] 44 SOT 290/[2010] 8 Taxmann.com 60 (Mum.) wherein the ITAT has held that it is a service contract for hiring of buses alongwith drivers covered under sec. 194C of the Act. The learned counsel for the assessee further pointed out that ITAT, Delhi Benches has also considered this issue in ITA No. 5885/Del/2010 in the case of ACIT v. NTPC Ltd. Learned DR on the other hand relied upon the orders of the Learned CIT(Appeals). 5. We have duly considered the rival contentions and gone through the record carefully. We find that an identical dispute arose in the case of NTPC. The ITAT has considered the issue as under: "In brief, the solitary issue is whether assessee has to deduct TDS under sec. 194C or 194I of the Income-tax Act, 1961 on th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mpliance on or before 13.3.2009. On 13.3.2009, Shri Vipin Kumar, CA attended and filed the reply. On 5.3.2009, a show-cause notice issued to the assessee fixing the date for compliance on or before 13.3.2009. On 13.3.2009, Shri Vipin Kumar attended, CA. attended and filed the reply, the case was discussed with him. The irregularities were observed as under: 1. Tax at source has been deducted u/s 194 J on the payment made to professionals at lower rate in F.Y. 2007-08 as per list enclosed. 2. Tax at source has been deducted u/s. 194C on the payment made to travelling agencies for hiring the vehicle while the same was to be deducted u/s. 194 I for F.Y. 2007-08 as per list enclosed. After considering all facts & ci....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ehicles would remain in the possession of the travel agency. The agency would provide its driver and also maintain the vehicle in good shape. In other words, all responsibility for plying the vehicles is of the transporters. Thus, according to the assessee, it was a service contract of transporting the passengers. It has not taken the buss on lease and used them as plant in business. The learned counsel for the assessee further contended that a similar issue in somewhat different context came up before the Hon'ble Delhi High Court in the case of CIT v. Prasar Bharti reported in 292 ITR 580. In that case, the facts are that assessee was making certain payment to outside producer for programs under "commissioned category" for which the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act which is in relation to deduction of TDS on payment of rent. 5. We have duly considered the rival contentions and gone through the record carefully. The first disputed point is whether it is a payment being contract of service or a rent for hiring a plant. The emphasis of the Learned DR was that assessee has hired a bus which is akin to taking a plant on lease, therefore, the payment made by the assessee to the travel agency has to be construed as a rent paid for the bus. On the other hand, contention of the assessee is that it has availed the facility of transportation from the travel agency. It has not taken the bus in its possession. According to the contract, the travel agency has to ply the bus for a fixed number of ....