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2017 (3) TMI 949 - AT - Income TaxTds u/s 194A - interest for late payment to IOCL on which tax was not deducted at source - disallowance u/s 40(a)(ia) - Held that:- As decided in the case of CIT vs. Krishak Bharati Co-op. Ltd.(2012 (10) TMI 655 - GUJARAT HIGH COURT ) that “the transportation charges for transporting the gas by the seller to its buyer was inter alia in furtherance of contract of sale of goods and such transportation charges cannot be covered u/s 194C of the Act. It was further held that transportation charges do not depend on the consumption of quantity of gas but a fixed monthly charges to be borne by the assessee as part of the agreement between the parties and, therefore, the application of section 194C does not arise.” Analyzing the facts in the light of above judgment of Hon. Jurisdictional High Court we find substance in the case relied on by the ld. counsel that such interest was not actually in the nature of interest which was paid on the loan taken but actually it is of nature of purchase cost of asphalt (bitumen) as the impugned amount has been paid in the course of making purchases. Therefore, the issue is raised in this appeal of not charging tax deducted at source u/s 194A of the Act on the interest amount of ₹ 9,00,832/- is squarely covered by the judgment of Hon. High Court in the case of CIT vs. Krishak Bharati Co-op Ltd. (supra). - Decided in favour of assessee Disallowance u/s 40A(3) - cash payment towards purchase of stamp papers - Held that:- under rule 6DD(b) refers to such circumstances where the payment is made to the Government and under the rules framed by it, such payment is required to be made in legal tender. It is an admitted fact that stamp papers are issued by State Government only and they are sold through various agents appointed by the Government. We are of the confirm view that such payments for purchase of Govt. Stamp Papers is covered under the exception provided under rule 6DD(b) of the IT Rules and, therefore, no disallowance is called for u/s 40A(3) of the Act and, we therefore, allow this ground of assessee.
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