TaxTMI 
TaxTMI 
2012 (11) TMI 806
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....is applicable on the payment made by M/s Idea Cellular Limited for hiring of buses, ignoring the fact of the case that the deductor company is liable to deduct the tax u/s 194 I at the rate of 10% for hiring of buses in view of amendment made u/s 194 I w.e.f. 01.06.2007. 1.2 In directing so, CIT(A) has failed to appreciate the following:- i) The payment was made essentially for hiring of buses which were given in exclusive possession and use of the assessee for a fixed tenure. The name of the assessee and route printed on buses, clearly establish above fact. ii) The assessee, being the hirer was not only in exclusive possession of the vehicle, but could also use them in the manner it wanted and no other person could use them....
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....on 194-I is applicable on the entire payments." 3. In this case order was passed u/s. 201(1) & 201(1A) of the I.T. Act by the Assessing Officer. Assessing Officer held that 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. 4. Upon assessee's appeal Ld. Commissioner of Income Tax (A) considered the assessee's submission. In this regard, Ld. Commissioner of Income Tax (A) referred to his decision of M/s APJ School (Appeal No. 130 & 131/2009-10/GZB-Noida dated 24.9.2010). From the above case, Ld. Commissioner of Income Tax (A) quoted as under:- "5.1. The only issue in this appeal is against the action of the AO in ....
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....hiring of transport vehicles get specifically covered u/s. 194-C as far as Tax Deduction at source is concerned. Transport vehicles used for carriage of goods and passengers are to be subjected to TDS provisions as per clause (c) of Explanation III of sub-section (2) of section 194C of the I.T. Act, which is reproduced below:- "Explanation III : For the purpose of this section, the expression "work" shall also include - (a) Advertising; (b) Broadcasting and telecasting including production of programmes for such broadcasting or telecasting. (c) Carriage of goods and passengers by any mode of transport other than by Railways; (d) Catering." It is also worth mentioning that the expression "carriage of goods and passengers by any ....
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....d bus owners are not hire contracts, such contracts are outside the purview of section 194-I. 5. To harmonious is not to destroy any statutory provision or to render it otiose (Sultana Begum v. Prem Chand Jain, (1997) 1 SCC 373, 381-82 The following case laws delinate the above principles: 1. Gulzari Lal Agarwal v. Accounts Officer (1996) 10 SC 590, 596. 2. State of Rajasthan v. Gopi Kishan Sen AIR (1992) SC 1754, 1756. 3. Jagdish Singh v. Lt. Gave or Delhi, Jt. (1997) SC 671, 978. If an interpretation that in this case tax was deductible u/s 194-I is adopted, it will render the provisions of clause (c) of Explanation III of sub-section (2) of section 194C redundant or otiose which will be against the law laid down by the Hon'b....
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....ITR 257 (SC) I am of the considered view that judgment in the case of C.I.T. vs. Prasar Bharti (Broadcasting Corpn. Of India). (2007) 292 ITR 580 (Delhi) Squarely applies to the case of the appellant and it deserves a judgment of its favour on the strength of this udgment alone. Apart from the above general principle, following factual observations are also extremely important for this issue to be decided in favour of the appellant. (a) The Transporters have not given the buses for exclusive use by the appellant; the use is only for point to point transportation to students/staff to and from; only for convenience sake, (he name I of the appellant organization and routes are placed temporarily. (b) After the specified period of use....
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....s involved, the Id. CIT(Appeals), Meerut, vide his order in, appeal No.467 & 468/08-09 dated 2.3.2010, has decided the issue in favour of that assessee. 5.3. It is also pertinent to note here that as per the clarifications obtained by the assessee from the Income Tax Department under RTI Act, TDS is being deducted by the Income Tax Department on payments made to the contractors from whom cars have been taken on rent/contract basis, @ 2%, as per provisions of section 194C. 5.4. The issue involved in the case of the appellant is similar to the cases discussed in preceding paras. In view of the above and also following the order of the under signed in case of "Kothari International School", Noida, referred to above, it is held that in appell....