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2014 (1) TMI 1298 - AT - Income TaxMandatory requirements of section 40(a)(ia) of the Act – TDS required to be deducted whether paid or payable - Allowability of charges – Hire charges paid and relief granted – TDS not deducted - Scope of tax deduction u/s 40(a)(ia) of the Act – Expenses u/s 28 and Section 30 to 38 of the Act – Held that:- The legal proposition made by the Commissioner of Income tax (Appeals) that interest expenditure is directly covered by section 28 and, therefore, section 40(a)(ia) will not apply for the reason that the section applies only to those expenses covered by sections 30 to 38 cannot be accepted - The law has provided a comprehensive system for deciding what are profits and gains of business or profession and how profits and gains of business or profession will be computed - When an exhaustive provision is made in the Act, it is not possible to hold that section 28 itself provides for expenditure and, therefore, the assessee can claim the expenditure of interest payment as an expenditure deductible at source itself under section 28 of the Act. Relying upon CIT Vs. Sikandarkhan N.Tunvar & Ors. [2013 (5) TMI 457 - GUJARAT HIGH COURT] - the provisions of section 40(a)(ia) cover not only the amounts which are payable as on 31st March of a particular year but also which were paid during the end of the year – Decided partly in favour of Revenue. Application of Section 194C of the Act – Held that:- Commissioner of Income Tax (Appeals) has not dealt with the aspect of whether the provisions of section 194C apply to the hire charges paid by the assessee so as to invoke the provisions of section 40(a)(ia) of the Act – As the CIT (Appeals) has not dealt with this aspect, thus, the issue is remitted back to the CIT(A) for fresh adjudication – Decided partly in favour of Assessee.
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