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2017 (1) TMI 325 - AT - Income TaxTDS u/s 194C - non deduction of tds on payments towards freight charges - Held that:- The assessee categorically submitted that the payment was made to M/s. Exim Services towards freight charges that too for carriage of goods by rail. This claim of the assessee is not disputed by the tax authorities except stating that the payment is not made directly to the railways but to the Agent. In our considered opinion the opening part of Section 194C refers to payments made to contractors but at the same time makes an exception to the payments made to such contractors if that amount has to be utilised for payment of rail fares. If the intention of the legislature was to make the payment directly to the railway authorities, then the exception provided in the Explanation should not have been introduced in Section 194C of the Act. Thus, on a conspectus of the matter, we are of the view that even if payment is made to an Agent so long as the payment is meant for meeting the expenditure in the form of payment to the railways, it stands excluded from the provisions of Section 194C of the Act. Under these circumstances, we accept the plea of the assessee by holding that there was no need to deduct tax at source with respect to the impugned payment to the contractor. - As in the case of ACIT, Central Circle-2, Hyderabad vs., M/s. Janapriya Properties Pvt. Ltd., Hyderabad [ 2015 (1) TMI 1208 - ITAT HYDERABAD] Section 40(a)(ia) cannot be invoked in respect of payments already made before the end of the accounting year. - Decided in favour of assessee
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