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2016 (2) TMI 337 - AT - Income TaxTDS u/s 194C(2) - disallowance of expenses under section 40(a)(ia) - payments to various truck owners on account of freight was made without TDS - Held that:- All the responsibility for the transportation of goods was on the assessee and assessee did not enter into any subcontract with the transport agencies and used to take on the trucks as and when required for the destination as and where required. The separate lorry receipt/challan and separate payments were made on successful delivery of the goods. There is no material to suggest that the other lorry owners involved themselves in carrying out any part of the work undertaken by the assessee for spending their energy, time, expenses on running trucks and by taking the risks associated with the main contract. In the reasoning of the AO that the payment made for the hired vehicles comes under the category of sub-contract is not correct and nor it is based on any relevant consideration. Therefore, in our opinion it cannot be said that the payments made for hiring vehicles would fall in the category of payment towards a sub-contract and as such the assessee is not liable to deduct tax at source as per provisions of section 194C(2) and consequently the provisions of section 40(a)(ia) will not apply on such payments - Decided in favour of assessee
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