Monday 28 November 2011

ITO vs. Indian Oil Corporation (ITAT Delhi)

The assessee entered into contracts with transporters for transporting petroleum products from the plant to various destinations. The assessee deducted TDS u/s 194C at 2% on the basis that the transportation contract was “work”. The AO held that the contract was a “hiring” of vehicles on the basis that
(i)the assessee had exclusive possession and usage,
(ii)the use was for a fixed tenure,
(iii)the tankers were customized to the assessee’s requirements
Thus TDS ought to have been u/s 194-I at 10%. The assessee was held to be in default u/s 201. On appeal, the CIT (A) reversed the AO. On appeal by the department, HELD dismissing the appeal.

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