2020 (2) TMI 64

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....neous both on facts and in law. 2. The learned Commissioner of Income-tax (Appeals) erred in holding that the payment made aggregating to Rs. 56,26,265/ - are covered by the provision of Sec.194C of the I.T Act and that tax has to be deducted at source in respect of such payments. The Learned CIT(A) ought to have seen that the payments do not fall within the provision of Sec. 194C of the I.T Act 3. The Learned Commissioner of Income-tax (Appeals) erred in holding that the provisions of Sec.40(a)(ia) are applicable to the payments made of Rs. 56,26,265/- without considering the fact that the amounts were actually paid and the provisions of Sec.40(a)(ia) have no application to the payments actually made and would apply only to the amoun....

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....taling to Rs. 62,44,330/-. The assessee was required to furnish party-wise details of amounts paid under the above mentioned heads which were furnished as under: S.No. Name of the party Amount (Rs) 1 Krishna Dish Ends 2,01,725 2 Vamsi Krishna Metal Fabs 55,760 3 Sai Durga Dish Ends 72,571 4 Nagarjuna Enterprises 4,26,242 5 Satyam Engg. Entp. 4,05,003 6 RS Engineers 1,54,572 7 Shanker Fabricators 7,50,000 8 Ambica Engg. & Fabricators 1,08,792 9 Priya Engg. Works 16,03,484 10 SS Kalani Engineering 2,56,511 11 VST Engineering 3,21,505 12 NV Fabricators 4,47,730 13 Laxmi Fabricators 2,43,575 14 Metal Engineers 55,070 15 S. Eswara Rao 1,58,000 16 PB Sivanarayana 1,00,000 17 R Srinivasa Rao 1,....

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....nts were made in excess of Rs. 50,000/-, the AO held that the provisions of Section 194C of the Act were applicable but the assessee had claimed that disallowance of expenditure u/s.40(a)(ia) of the Act would not apply when the amount was actually paid. (However, this issue is not pressed by the assessee in this appeal). The AO accordingly made the disallowance u/s.40(a)(ia) of the Act of the entire expenditure of Rs. 56,26,265/- on which no TDS was made, according to him, the provisions of Section 194C of the Act were applicable to all the payments. 4. Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A), reiterating the submissions made before the AO and also filed a chart showing bifurcation of payment to eac....

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....portation charges which are reimbursed by the assessee would not attract the TDS provisions, as the provisions of Section 194C of the Act would apply only to the works contract, i.e. only the job work performed by the respective parties. Thus, the transportation charges and the material cost if it is the reimbursement of charges by the assessee cannot be considered as part of the contract and the provisions of Section 40(a)(ia) of the Act would not apply to the component of cost of the material and transportation charges. However, the findings of AO and the CIT(A) are that the total of the payment is for works contract, and that the assessee has neither deducted tax at source from such charges nor has furnished any certificate to the effect....