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2004 (2) TMI 43 - HC - Income TaxSection 194C shows that the tax has to be deducted from the payments made to a contractor at the time of credit of such amount to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode. Thus, it is clear that the tax has to be deducted only on the payments which are made to the contractor and not on the amount which is collected by it on behalf of the municipal committee. - The writ petition is disposed of with the direction that respondent shall be entitled to charge income-tax under section 194C on the amount paid to the petitioner and not on the basis of the gross amount collected by way of octroi. - It is further directed that the accounts of the petitioner regarding its liability to deposit the Income tax shall be adjusted with effect from the date of the agreement.
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