Contract for transportation in respect of chartering a helicopter/aircrafts do not attract provisions of TDS u/s 194I

SKIL Infrastructure Ltd. Vs. ITO (ITAT Mumbai)- The nature of arrangement entered by the appellant for transportation of its employees between residence to office is similar to the arrangement mentioned in the circular No. 558, dated 28th March 1990, issued by the CBDT regarding the applicability of the provisions of section 194C of the Act to the hire charges paid to bus owners. Apartment from this, other circulars (ie., circular number 681 dated March, 8, 1994, circular No. 713 dated August 2, 1995 and Circular: No. 715, dated 8-8-1995) have specifically provided that the provisions of section 194C of the Act shall apply in case where bus or any other mode of transport is chartered. Based on the reading of the circulars, I am of the opinion that payments made by the appellant are of similar nature and hence tax should be deductible under section 1 94C of the Act;

Judgement in case of Indian National Ship owners Association relied on by the appellant is applicable to the appellant’s case in which it has been held that the provisions of section 194 I of the Act are not applicable in case of hire payments made for the hiring of transport vehicle.