Section 194-I of the Income Tax Act

Income-tax Act, 2025: s.393

Section 194-I of the Income-tax Act, 1961 corresponds to section 393 (Tax to be deducted at source) of the Income-tax Act, 2025.

Read section 393 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 194-I is Sultan Bros. (P) Ltd. v. CIT (51 ITR 353), cited in 148 of the 307 judgments on BharatTax that turn on this section.

Leading authorities on Section 194-I

Sultan Bros. (P) Ltd. v. CIT
51 ITR 353 · 1964 · Supreme Court
148
citing judgments

Income derived from letting out property is classified as business income only if the letting activity constitutes a business from a businessman's perspective, rather than mere exploitation of property by an owner. The company's object clause is not the sole determinative factor in this assessment.

S.G. Mercantile Corporation P. Ltd. v. CIT, Calcutta
83 ITR 700 · 1972 · Supreme Court
126
citing judgments

Income from sources not falling under any other head of income under Section 14 of the Income Tax Act is taxed under the residuary head 'income from other sources'. If income cannot be taxed under Section 45 (capital gains), it cannot be taxed at all.

Rayala Corporation Pvt. Ltd. v. ACIT
386 ITR 500 · 2016 · Supreme Court
89
citing judgments

If an assessee company's main business object is to acquire and rent out properties, the rental income derived is taxable as 'Profits and gains of business or profession', rather than 'Income from house property', as the nature of the activity constitutes a business.

DIT v. Schlumberger Asia Services Ltd.
414 ITR 1 · 2019 · High Court
82
citing judgments

Service tax paid to the Government of India is not 'on account of' the provision of services for mineral oil exploration and production, and thus does not form part of the aggregate taxable amount under Section 44BB(2)(a) and (b).

Principal Commissioner of Income-tax-2 v. Caraf Builders & Constructions (P.) Ltd.
112 Taxmann.com 322 · 2019 · Supreme Court
71
citing judgments

Disallowance under Section 14A of the Income-tax Act, 1961 cannot exceed the actual amount of exempt income earned by the assessee during the relevant previous year. This principle applies to assessment years prior to the amendment by Finance Bill 2022.

Universal Plast Ltd. v. CIT
237 ITR 454 · 1999 · Supreme Court
69
citing judgments

Income received by an assessee from leasing or letting out assets, whether categorized as lease amount, rent, or license fee, is a mixed question of law and fact to determine if it falls under 'Profits and gains of business or profession'. No precise test exists, and the determination must consider the perspective of a businessman, the specific facts, and the true interpretation of the letting agreement.

CIT v. Halliburton Offshore Services Inc.
300 ITR 265 · 2008 · High Court
50
citing judgments

For computing profits under the presumptive taxation scheme of section 44BB, gross revenue excludes service tax collected and deposited by the assessee but includes mobilization/demobilization fees for offshore services.

Bharti Cellular Ltd. v. ACIT
160 Taxmann.com 12 · 2024 · Supreme Court
46
citing judgments

Amounts paid to distributors who purchase goods on their own account and sell them in their territory, acting as independent contractors on a principal-to-principal basis, do not constitute commission or brokerage. Therefore, the assessee is not liable to deduct TDS under Section 194H on such transactions.

CIT v. Chennai Properties and Investments Ltd.
266 ITR 685 · 2004 · High Court
37
citing judgments

Rental income earned by letting out a property predominantly as bare letting is assessable under the head 'Income from house property', even if the assessee is the owner.

Kartik Vijaysinh Sonavano v. DCIT
132 Taxmann.com 293 · 2021 · High Court
33
citing judgments

The tax department cannot speculate to deny the benefit of tax deducted at source by the employer to the petitioner.

Judgments on Section 194-I

Addl.CIT, Special Range- 9, New Delhi vs. Vlcc Health Care Ltd., New Delhi

In the result, the appeal filed by the Revenue is dismissed

ITA 4414/DEL/2017[2009-10]Status: DisposedITAT Delhi09 Oct 2024AY 2009-10

Bench: Shri S.Rifaur Rahman & Shri Sudhir Pareekaddl.Cit, Special Range 9, Vs. Vlcc Health Care Ltd., New Delhi. M – 14, Commercial Complex, Greater Kailash Part Ii, New Delhi - 110 048. (Pan : Aaacc4808P) (Appellant) (Respondent) Assessee By : Shri Vinod Kumar Bindal, Ca Ms. Rinky Sharma, Advocate Revenue By : Shri Vivek K. Upadhyay, Sr. Dr Date Of Hearing : 27.08.2024 Date Of Order : 09.10.2024 Order Per S.Rifaur Rahman,Am: 1. This Appeal Has Been Filed By The Revenue Against The Order Of Ld. Commissioner Of Income Tax (Appeals)-33, New Delhi [“Ld. Cit(A)”, For Short] Dated 08.11.2016 For The Assessment Year 2009-10. 2. Brief Facts Of The Case Are, Assessee Filed Its Return Of Income On 29.09.2009 For The Ay 2009-10 Declaring An Income Of Rs.14,34,56,042. The Case Was Processed Under Section 143(1) Of The Income-Tax Act, 1961 (For Short ‘The Act’). The Case Was Selected For Scrutiny & Notices U/S 2 143(2) & 142 (1) Along With Questionnaire Were Issued & Served On The Assessee. In Response, Ld. Ar Of The Assessee Attended From Time To Time & Filed The Relevant Information As Called For. 3. Assessee Is Engaged In The Business Of Slimming & Beauty Services. The Assessee Has Not Disclosed Any Other Source Of Income During The Year. During Assessment Proceedings, Ao Observed That The Assessee Is Carrying Substantial Credit Balances As Current Liabilities Under The Head ‘Advance From Customers’. The Assessee Was Asked To Explain Along With Supporting Documents. Assessee Vide Its Letter Dated 22.11.2011 Submitted As Under :-

For Appellant: Shri Vinod Kumar Bindal, CAFor Respondent: Shri Vivek K. Upadhyay, Sr. DR
Section 143(1)Section 2Section 29

Air Transport Corporation (Assam) Private Limited, Chennai vs. ITO-TDS, W-1(3), Income Tax Office, TDS Ward

The appeal stand allowed in terms of our above order

ITA 825/CHNY/2023[2016-17]Status: DisposedITAT Chennai18 Oct 2023AY 2016-17

Bench: Hon’Ble Shri V. Durga Rao, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.825/Chny/2023 (िनधा"रण वष" / Assessment Year: 2016-17) M/S. Air Transport Corporation Ito-Tds बनाम (Assam) Pvt.Ltd. Ward-1(3), 1-D, Lakshmi Bhavan, Chennai. / Vs. No.609, Anna Salai, Chennai-600 006. "थायीलेखासं./जीआइआरसं./Pan/Tan Aaaca-5364-L / Cheao-1050-A (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ" की ओर से/ Appellant By : Shri Sunil Sharma, (Ca)-Ld.Ar ""थ" की ओर से/Respondent By : Shri P. Sajit Kumar (Jcit)-Ld.Dr सुनवाई की तारीख/Date Of Hearing : 16-10-2023 घोषणा की तारीख /Date Of Pronouncement : 18-10-2023 आदेश / O R D E R Manoj Kumar Aggarwal () 1. Aforesaid Appeal By Assessee For Assessment Year (Ay) 2016-17 Arises Out Of The Order Of Learned Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [Cit(A)] Dated 24-05-2023 In The Matter Of An Order Passed By Ld. Assessing Officer [Ao] U/S. 201 (1) / 201(1A) Of The Act On 21-03-2023 Raising Certain Demand Against The Assessee For Want Of Tds On Rental Payments. The Grounds Taken By The Assessee Are As Under:

For Appellant: Shri Sunil Sharma, (CA)-Ld.ARFor Respondent: Shri P. Sajit Kumar (JCIT)-Ld.DR
Section 143(3)Section 194Section 194ISection 201Section 201(1)Section 40