TaxTMI 
TaxTMI 
2017 (1) TMI 325
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....the extent it is prejudicial to the assessee. 2. The Ld. CIT(A) erred in holding that provisions of section 194C is attracted even to the payments that are made to Railways through its agent and thereby erred in confirming the disallowance of Rs. 24,39,086 made u/s.40(a)(ia). 3. The Ld. CIT(A) failed to appreciate the fact that what is paid as railway freight to the agent is only reimbursement of actual amount payable to railways and only service charges that are paid to the agent attracts the provisions of section 194C and such amounts being less than the limit prescribed no TDS was made and therefore ought to have allowed the appeal. 4. The Ld. CIT(A) failed to appreciate the fact that similar payments that are made to clearing a....
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....dingly, the A.O. invoked the provisions of Section 194C of the Act and treated the assessee as in default. Consequently, disallowance was made under section 40(a)(ia) of the Act. 4. Before us, Learned Counsel appearing on behalf of the assessee, raised two pronged arguments. (a) That the provisions of Section 194C has no application when the payment is made to a contractor for transport of goods by rail. He adverted our attention to Section 194C(3) and Explanation (iv) thereof wherein it is stated that "work" includes carriage of goods or passengers by any mode of transport other than rail. No doubt Section 194C is applicable to the payment made to the contractors but when it is for transport of goods by rail it carves out an exceptio....
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.... was impliedly affirmed by the Hon'ble Supreme Court by dismissing an SLP sought by the Revenue, and thus the view taken by the ITAT Special Bench Visakhapatnam deserves to be followed. (a) Decision of Hyderabad Bench 'A' of the Tribunal in Ushodaya Enterprises Ltd. Hyderabad V/s. Dy. Commissioner of Income-tax Circle 16(2), Hyderabad (ITA Nos.676/Hyd/2009 & 411/Hyd/2010 dated 7.1.2015) (b) Decision of Mumbai Bench 'A' of the Tribunal in M/s. Arcadia Share & Stock Brokers Pvt. Ltd., Mumbai V/s. Dy. Commissioner of Income-tax, Range 4(1), Mumbai (ITA No.1871/Mum/2013 dated 22.12.2014) 6. The Learned Departmental Representative fairly agreed that the ITAT Hyderabad Bench considered an identical issue and followe....
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....s rightly pointed out by the Learned Counsel appearing on behalf of the assessee, Section 194C speaks of payment made to contractors with an exception that even payments made to contractors would stand outside the purview of that provision if such payment is made towards carriage charges. In the instant case, the assessee categorically submitted that the payment was made to M/s. Exim Services towards freight charges that too for carriage of goods by rail. This claim of the assessee is not disputed by the tax authorities except stating that the payment is not made directly to the railways but to the Agent. In our considered opinion the opening part of Section 194C refers to payments made to contractors but at the same time makes an exception....