Case Law Details
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.
The carriage of goods and passengers by any mode of transport other than railway are specifically covered by the expression “work” as defined in the Explanation III to section 194C of the Act. The contracts entered by the appellant with the transport service providers are for the transportation of its employees. Hence the same should be covered by the Explanation III to section 194C of the Act;
Thus, in view of the above facts it can be held hold that the payments made to the transport service provider fall within the ambit of the provisions of section 194C of the Act;
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