TaxTMI 
TaxTMI 
2019 (12) TMI 1618
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....f asst. u/s 148 of the Act. b) Disallowance made u/s 40(a)(ia) of the Act. 3. The assessee is a transport contractor. He filed his return of income for the year under consideration declaring total income of Rs.1,90,900/-. The assessment was completed u/s 143(3) of the Act determining the total income at Rs.4,88,626/-. Subsequently the AO reopened the asst. u/s 148 of the Act on the basis of internal audit objections, wherein it was pointed out that the assessee has not deducted tax at source from transport payments and hence addition u/s 40(a)(ia) of the Act is warranted. 3. Before the AO the assessee submitted that the provisions of sec. 194C shall not apply to him, since in the immediately preceding year (i.e., in FY 2008-0....
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....ndment, the proviso to section 194C (2) was applicable and the same reads as under:- "Provided that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such sum is credited or paid to the account of the sub-contractor, shall be liable to deduct income-tax under this sub-section." 6. A reading of amended provisions as well as pre-amended provisions would show that the provision of 194C shall apply in respect of an "individual" in a particular year, only if he is liable to get his account....
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.... Assessment Year 2009-10. Hence. I am not liable to deduct the tax at source for the financial year 2009-10 (Assessment Year 2010-11)." 8. However, the AO has taken the view that since the assessee was liable to get his accounts audited u/s 44AB of the Act in the asst. year 2008-09 (Fin. Year 2007-08), i.e., the year preceding the immediately preceding year, the assessee would be liable for deduction of tax at source from transport payment made during the year under consideration. We find that the above said interpretation made by AO and confirmed by ld CIT(A) is not in accordance with the provisions of sec. 194A of the Act. 9. However, we noticed that the assessee has not filed his return of income for asst. year 2009-10 and he has c....
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....AB of the Act. In the letter furnished by the assessee before the AO, the assessee has claimed that he was not liable for getting his accounts audited u/s 44AB of eh Act in the immediately preceding financial year. 12. In view of the discussion made Supra, for the limited purpose of examining the above said claim of the assessee, we restore this issue to the file of the AO. If the assessee has maintained books of account for the immediately preceding year and he was not liable for getting his accounts audited u/s 44AB of the Act, then the impugned disallowance is not warranted. If the AO was satisfied that the assessee has not maintained books of accounts, then the claim of the assessee needs to be accepted that the provisions of sec.44A....