TDS on transport charges deductible u/s. 194C not 194I

PrintPDF

INCOME TAX APPELLATE TRIBUNAL, DELHI

ITA No. 4913/Del/2011 – A.Y. : 2008-09

Asstt. Commissioner of Income Tax(TDS),

vs.

M/s Idea Cellular Limited

U/s 194-I, Income Tax is required to be deducted at source at the time of payment of any income by way of rent @’ 10% for the use of any machinery or plant or equipment. U/s 194C, tax is required to be deducted @’ 2% for carrying out any work which, inter alia, includes carriage of goods and passengers by any mode of transport other than by railways. Though generally speaking all types of machinery, plant and equipment given on hire get covered u/s. 194-I but 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.