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2013 (4) TMI 114 - AT - Income TaxDeduction of TDS out of payment made to payee - Disallowance U/s. 40(a)(ia) of the Income-tax Act - TDS was deductible u/s 194C but it was not deducted by the assessee at source out of the payments - Claimed Tax deducted by debiting the running account of M/s J.B. Construction and the same was deposited with the Government before the due date specified in sub-section (1) of section 139 - Held that :- The amount claimed by the assessee to have been deducted by debiting the account of the sub-contractor on 31.3.2006 cannot be said to have been deducted at source, as mandated by law, out of the amounts paid without TDS. In order to save a payment from disallowance u/s 40(a)(ia), an assessee must therefore show that the tax is either not deductible at source out of such payments or, if it is deductible, has been deducted at source and also paid to the Government within the specified time limit. In the present case, the assessee claims deduction in respect of payments made to M/s J.B. Construction without deduction of tax at source and therefore its deductibility is squarely hit by section 40(a)(ia). - The assessee has failed to deduct the tax at source out of payments made to the sub-contractors and therefore the judgment of the Hon'ble Calcutta High court in CIT v. Virgin Creations [2011 (11) TMI 348 - CALCUTTA HIGH COURT] is not applicable to the case of the assessee. - Decided against the assessee.
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