TaxTMI 
TaxTMI 
2014 (5) TMI 510
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.... Income Tax Act, 1961 ('the Act' hereinafter). 2. The assessee-company is in the business of providing telecommunication network and services across the country. It operates through three wings, Architectural, Civil and Electrical, which provide all the infrastructural services as required for its telecom business, i.e., from the initial survey of land, preparation of drawings, designs, etc., construction, followed by equipment purchase, installation, maintenance, etc. For the smooth functioning of its business, it enters into maintenance contracts with various parties. 3. The issue arising in the instant appeals is the exigibility to tax deduction at source (TDS) of the payments under reference made/allowed by the assessee to....
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....eral one. So however, the ld. Authorized Representative (AR) during the course of the hearing, on the basis of the material on record, viz., the copies of the tenders floated; work orders; the agreements, terms and conditions thereof, including those specifying the nature of the work, qualification of the personnel, the maintenance schedule to be adhered to, etc. (PB-I pgs. 25-26, 29, 45, 71-76, 91, 111, 186), exhibited the contracts to be regular, maintenance contracts and no more. In fact, as also clarified before the assessing authority, the assessee has an electrical wing, manned by engineers, and is thus equipped to provide the necessary guidance/assistance to carry out the electro mechanical works by the contractor. In fact Circular N....
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....arent from the material on record, and even as clarified by the ld. CIT(A) (refer para 5.3 of his order), is toward maintenance of air conditioners, lifts, etc., involving cleaning and checking of parts, adjusting the engine valves, tightening electrical controls, etc. This is also clarified from the bills issued by the contractors, which evidence the work involved to be in the nature of repairs and maintenance of the premises and other electro mechanical gadgets. This, it may be appreciated, is the normal, regular work for the persons in those fields, as for example for a car mechanic, repairing a car in the normal course; an electrician fixing an electrical problem. In fact, the work of a cobbler, a carpenter, barber, weaver, et. al. is a....
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....gement [emphasis, ours] for the use of (either separately or together) any land; building; land appurtenant thereto; machinery; plant; equipment; furniture; or fittings. A vehicle or motor car would stand to be included within the purview of the words 'plant' or 'machinery'. Accordingly, the arrangement for providing cars to the assessee's personnel for their work would stand to be covered by section 194-I. In fact, we observe that the ld. CIT(A) does not dispute this per se. His decision is on the basis of the nature of the services contracted, i.e., not toward car hiring as such but for a facility of transportation from one place to another, with the rates fixed for a particular vehicle with reference to distance and t....
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....or a particular time/user, of course coupled with other facilities. The vehicle is decidedly at the disposal of the user. Stipulations as to distance and time is only toward regulating the said availability and, besides, have a direct implication on the charge/s (to be) raised as well in-as-much as payments for user beyond defined user parameters, viz. as to time (say, 8 or 12 hrs. a day, or from 9 a.m. to 6 p.m.) or mileage (as, say, 1500 kms per month), etc., would attract a higher charge. Why, even where a hire is on a regular basis, the same would assume the nature of 'rent', as clarified by the CBDT per its Circular No. 715 (supra), relied upon by the assessee, with reference to the hire of a hotel room (refer Q. No. 20 and ans....