Deduction of tax under section 194C will come into operation only in case of payment made by assessee.

The Honorable Supreme Court of India Vide Commissioner of Income Tax-I vs. Daulat Enterprises held that assessee is liable to deduct TDS under Section 194C of the Income Tax Act, 1961 if and only if assessee is liable to make payment to the contractor. If assessee is not liable to make payment either by way of contract or otherwise, but still made the payment, then he need not deduct TDS.