S.194C is applicable in case of “Connectivity charges” & “Gas transportation charges” and not S.194I:

Assessee is engaged in the business of laying and operating natural gas transmission network. During the year under consideration, assesse had paid “Connectivity charges” and “Gas transportation charges” and had deducted tax at source u/s 194C. AO was of the view that the assessee ought to have deducted tax u/s 194I and hence, he passed and order u/s 201(1), making huge addition on that count. The Hon’ble ITAT observed that pursuant to contract with the customers, the assessee charged them based on the quantity of gas supplied through pipelines not owned by the assessee. “Connectivity charges” were paid by the assessee against the agreement for using the pipeline connection for transportation of gas and “Gas transportation charges” were paid for transportation of such gas. Such pipelines were owned by someone else and it was open for such owner to provide services to its other clients. Moreover, such owner had complete control over such pipelines. Thus, the said transportation was “Work” as per S.194C. In light of the above, it was held that S.194C is applicable and not S.194I. Accordingly, the addition in respect of the same was deleted.