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2016 (11) TMI 652 - AT - Income TaxTDS u/s 194C - non deduction of tds on composite payment under the work contract - Held that:- The payment made by the assessee is only the cost of the material purchased and therefore there was no element of any income or profit of the contractor in respect of the procurement of material in question. It was found that the contract agreement in question is only in respect of labour charges for a fixed amount of ₹ 34 lakhs and further the material purchased through the contract was in the name of the assessee as the invoices were issued by the vendor of the material in the name of the assessee. When the payment in question is not forming part of the work contract and it was only a reimbursement of purchase of material that too in the name of the assessee, then the provisions of Section 194C of the Act are not applicable on such payment. Accordingly the disallowance made by the AO is not justified and the same is deleted.- Decided in favour of assessee
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