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2016 (10) TMI 55 - AT - Income TaxTDS u/s 194C - payments made by the assessee towards Carriage Inward and Carriage Outward - non deduction of tds - Held that:- As in the context of Section 194C(1), person undertaking to do the work is the Contractor and the person so engaging the contractor is the contractee. As by virtue of the Amendment introduced by Finance Act (No.2) 2009, the distinction between a contractor and a sub-contractor has been done away with and Cl. (iii) of Explanation under 194C(7) now clarifies that "contract" shall include sub-contract. Subject to compliance with the provisions of Section 194C(6), immunity from TDS under sec. 194C(1) in relation to payments to transporters, applies transporter and non-transporter contractees alike; iv) under Sec. 194C(6), as it stood prior to the amendment in 2015, in order to get immunity from the obligation of TDS, filing of PAN of the Payee-Transporter alone is sufficient and no confirmation letter as required by the learned CIT is required. Sections 194C(6) and Section 194C(7) are independent of each other, and cannot be read together to attract disallowance u/s 40(a)(ia) read with Section 194C of the Act. If the assessee complies with the provisions of Section 194C(6), no disallowance u/s 40(a)(ia) of the Act is permissible, even there is violation of the provisions of Section 194C(7) of the Act. Consequent to our findings in the preceding paragraphs, we reach a conclusion that the authorities below are not justified in treating the expense incurred by the assessee for Carriage inward and carriage outward as disallowable under section 40(a)(ia) of the Act, and adding back ₹ 1,63,78,648/- claimed as expense towards Carriage Inward and ₹ 1,13,00,980/- claimed as expense towards Carriage Outward, and such additions shall stand deleted. - Decided in favour of assessee.
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