A contract need not be in writing as even an oral contract is good enough to invoke provisions of section 194C. A plain reading of section 194C makes it clear that
"any person responsible for paying any sum to any resident (i.e. contractor) for carrying out any work (inc
is required to deduct tax at source from the amounts so paid or payable. There is no doubt that the assessee in this case has made the payments as transportation charges in the nature of hiring charges for goods carrying vehicles. The main contention of the assessee is, however, that the payments have not been made in pursuance of a contract between the assessee and the transporters.
Now the question arises is, whether there is contractual relationship between the assessee and the persons to whom the assessee had made the payments in the nature of hiring charges for goods carrying vehicles. A contract need not be in writing; even an oral contract is good enough to invoke the provisions of section 194 C. Deputy Commissioner of Income-tax v. Five Star Shipping Agency (P.) Ltd.  154 ITD 527 (Kol – Trib)