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2011 (2) TMI 115 - MADRAS HIGH COURTDisallowance - TDS u/s 194C or 194I - TDS in respect of the hire charges paid by the respondent assessee, for having hired Millers and Rollers, for the purpose of carrying out his road contract works - Hiring of the miller and roller as a machinery/equipment was apparently needed for the purpose of carrying out the contract of laying of the road - Therefore, in the absence of any such acceptable material, the conclusion of the Assessing Officer in treating the hiring of Millers and Rollers as one falling under the category of sub-contract for provision of Labour or the conclusion of the Commissioner of Income Tax (Appeals) that atleast 10% of the total payment of Rs.52,22,500/- would have been incurred by way of labour charges by the respective owners, cannot be accepted when indisputably Section 194-I of the Income Tax Act came to provide for making the TDS in respect of machinery/ equipments only with effect from 1.6.2007 and the relevant assessment year is 2005-06, there was no scope at all to find fault with the respondent assessee for any violation of Section 40(a)(ia) of the Income Tax Act.
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