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2015 (8) TMI 1079 - AT - Income TaxDisallowance u/s.40(a)(ia)- payment towards commission on which the assessee failed to comply with the provisions of Sec.194H - CIT(A) deleted disallowance - Held that:- As can be seen from the facts on record, the assessee has executed the work as a sub-contractor to the main contractor M/s.G.Venkata Reddy and Co., who was awarded the work by the principal. Main contractor has handed over the work to the assessee on back to back basis and payments towards execution of work was received by the main contractor from the Government directly and after retaining his margin of 4% the balance amount is remitted to the assessee. Therefore, the 4% margin retained by the main contractor cannot be said to be in the nature of commission but the margin/profit retained by the main contractor for having subcontracted work to the assessee. It is also established on record that the assessee never makes any payment to the main contractor. On the contrary, the main contractor makes the payment to the assessee after receiving the payments from the Government. Therefore, as there is no payment by the assessee to the main contractor, only because the assessee has debited the amount to its P&L A/c, it cannot be inferred that commission to that extent was paid by the assessee to the main contractor thereby attracting the provisions of section 194H. In the aforesaid facts and circumstances, we are of the view that Ld. CIT(Appeals) was justified in deleting the addition made by the Assessing Officer - Decided in favour of assessee.
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