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2013 (5) TMI 196 - AT - Income TaxLiability to deduct TDS - whether the payment made by the assessee to the transporters was in the nature of contractual payment by virtue of inclusive definition of "work" in Expl.III to sec. 194C which includes transportation of goods by any means - disallowance of expenditure by invoking the provisions of sec. 40(a)(ia) - CIT deleted the liability - Held that:- AO has not established the fact that there is existence of contract written or oral & has simply stated that since the assessee has not deducted the tax at source on the impugned payments, this issue is not material. See ACIT vs. Niten Shah (2013 (4) TMI 533 - ITAT AHMEDABAD) & C.I.T (TDS) vs. United Rice Land Ltd. (2008 (5) TMI 142 - PUNJAB AND HARYANA HIGH COURT) wherein held that there was neither any oral or written agreement between the assessee or the transporters for carriage of goods nor has it been proved that any freight charges were paid to them in pursuance of a contract for a specified period. The assessee was not required to deduct tax u/s. 194C from the payments made to the transporters. Also in this case loading and unloading has been done by the persons other than the mule owners who have only carried the goods between the two points and have not loaded and unloaded the same themselves in this regard referring to decision of Bombay Goods Transport Association vs. CBDT (1994 (7) TMI 65 - BOMBAY High Court) wherein held that section 194C does not apply to the Transport Contracts for mere carrying of goods without loading and unloading. We further find that Section 194C of the Act exempts payments to one entity from operation of it if it is below a certain amount per year. In this case Ld. Commissioner of Income Tax (A) has opined that substantial quantum of payment would be below the exemption limit. In favour of assessee.
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