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2012 (7) TMI 331 - AT - Income TaxComposite work contract - deduction of tax at source u/s 194C - assessee purchased machinery and the supplier was supposed to erect the machinery at the factory premises of the assessee after completing the civil work and erection work. The assessee has already deducted TDS on account of services rendered for civil work/electrical work and erection of the machinery - provisions of section 194C are not applicable on account of purchase of machinery - supplier of the machinery is a separate component and on account of services rendered for commissioning machinery after civil work and electrical work is separate on which TDS has already been declared - assessee has not committed any default in view of provisions of section 201(1) - In favour of the assessee Interest under section 201(1A) for non-deduction of tax on salary payment to Director of the assessee company – Held that:- Total salary paid to director was Rs. 1,43,539/- and after deduction under section 80C and 80D the net taxable salary comes to Rs. 91,660/-. Since the salary was below Rs. 1,00,000/-, therefore, there was no liability to deduct tax on the amount of salary. The Assessing Officer has computed the total income which is other income i.e. interest etc. from bank. The company is liable to deduct tax on the amount of salary only which is less than Rs. 1,00,000/- and, therefore, there was no liability for deduction of tax - appeals of the assessee are allowed.
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