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2012 (9) TMI 731 - AT - Income TaxNon deduction of TDS on payment of transport charges - Disallowance u/s.40(a)(ia) - Held that:- Nothing has been brought on record the goods were transported in pursuance of any sub-contract so as to apply the provisions of Sec.194C(2), thus in the absence of transfer or pass-over of any contractual responsibility to transporters as a sub-contractor, the assessee being an individual was not responsible for the deduction of tax at source as prescribed u/s.194C(2). As the AO has recorded a finding that the impugned amount was paid to truck-owners. The AO has noted that when the payments were made to various truck-owners, no TDS was deducted. In this regard, the Respected Special Bench has taken a view in the case of Merilyn Shipping & Transports, Visakhapatnam vs. Addl.CIT (2012 (4) TMI 290 - ITAT VISAKHAPATNAM) that the word quote “ “payable” used in section 40(a)(ia) has to be given its natural meaning and, going by a strict interpretation, section 40(a)(ia) is applicable only to expenditure which is payable as on March 31 of every year and cannot be invoked to disallow the amounts which have already been paid during the previous year, without deducting tax at source.”. Thus,the provisions of section 40(a)(ia) are not applicable under this situation, hence the impugned disallowance is hereby deleted - in favour of assessee.
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