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2011 (8) TMI 747 - AT - Income TaxDisallowance - violating traffic rules by entering town on no entry times, one way traffic violations and the assessee claimed it to be incurred wholly and exclusively for the purpose of business - Since the assessee is engaged in the transport business, the violation of traffic rules are quite normal for which it has to pay some penalties/fines - Since the payments were made for infraction of law, it is hit by explanation to section 37 of the Act and therefore the penalty or fine cannot be considered to be the business expenditure u/s 37 of the Act - Decided against the assessee Regarding disallowance of Rs. 1,16,14,599/- u/s 40a(ia) - Hire charges - Whether TDS u/s 194C is applicable or not - Held that: TDS as per section 194C is required to be deducted when the payments are made to the contractor for carrying out the work i.e. carriage of goods and passengers by any mode of transport other than by railways subject to other conditions prescribed u/s 194C of the Act but whenever the lorries and trucks are hired by the assessee for its own use in any manner under its own control and supervision, the TDS is not required to be deducted on payment made by the contractor to the lorry/truck owners - Decided in favor of the assessee
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