ITO(TDS), MEERUT vs. U.P. STATE ROAD TRANSPORT CORPORATION, MEERUT

The only issue raised by the Revenue in these appeals is against the direction given by the ld. CIT(A) for deduction of tax at source u/s 194C as against u/s 194I, from the payments made by the assessee for hiring of buses.

We have heard the rival submissions and perused the relevant material on record. There is no dispute on the factual aspects that the assessee paid for hiring of buses and made deduction of tax at source u/s 194C @ 2%. The Assessing Officer, in his order u/s 201(1A), treated such payment as ‘Rent’ and directed to deduct tax at source u/s 194I at 10%. The action of the AO was overturned in the first appeal. It is seen that similar issue came up for consideration before the Agra Tribunal in the case of UPSRTC, Aligarh in & 53/Agra/2011. The Tribunal vide its order dated 15.11.2011 has upheld the deduction of tax at source in similar circumstances u/s 194C. A copy of the said order is placed at page 58 of the paper book. It has been brought to our notice that the Hon'ble Allahabad High Court in CIT (TDS) vs. UPSRTC in ITA No.556 & 557 of 2011 has also taken similar view. A copy of such judgment dated 11.08.2014 has been placed on record. In view of the foregoing discussion, we are satisfied that the ld. CIT(A) was justified in directing the deduction of tax at source u/s 194C.

In the result, both the appeals stand dismissed.