2021 (8) TMI 939

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....disallowance of Rs. 8,95,334/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) under section 40(a)(ia) of the Income Tax Act, 1961. 2. The assessee in the present case is a Company, which is engaged in the business of Engineering and Construction Work. The return of income for the year under consideration was filed by it on 09.10.2010 declaring total income of Rs. 48,15,183/-. As noted by the Assessing Officer during the course of assessment proceedings, the assessee-company had hired equipment during the year under consideration and paid an amount of Rs. 8,95,334/- on account of hire charges without deducting tax at source as required under section 194I of the Act. He, therefore, required the assessee-company to expl....

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....vision of section 40(a)(1) is not applicable in this instant case". 3. The Assessing Officer did not find the explanation offered by the assessee to be acceptable and proceeded to disallow the equipment hired of Rs. 8,95,334/- under section 40(a)(ia) in the assessment completed under section 143(3) vide an order dated 15.03.2013. The disallowance made by the Assessing Officer on account of equipment hire charges by invoking the provision of section 40(a)(ia) was challenged in the appeal filed before the ld. CIT(Appeals) and the submissions made during the course of assessment proceedings before the Assessing Officer were reiterated on behalf of the assessee-company before the ld. CIT(Appeals) in support of its case that the disallowance ....

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....n the order of the assessing officer and the same is hereby upheld. In view of above, these grounds of appeal are dismissed". Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal. 4. We have heard the arguments of both the sides and also perused the relevant material available on record. The first contention raised by the ld. Counsel for the assessee is that the amount of Rs. 8,95,334/- on account of hire charges of equipment was deducted by the Principal Contractor NCC Limited from the amount payable to the assessee-company and since there was actually no payment directly made by the assessee-company on account of hire charges, there was no requirement of deduction of tax at sourc....