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2020 (11) TMI 338 - AT - Income TaxTDS u/s 194C - Disallowance u/s 40a(ia) - assessee did not submit any confirmation from the payee to the effect that returns of income including receipts from the assessee was filed u/s.139(1) by the payee - HELD THAT:- CIT(A) has recorded categorical finding to the effect that gold plating done by the supplier M/s.Spectronic Plating Pvt. Ltd., would not come within the mischief of section 194C of the Act, because the payment was in the nature of purchase of materials which attracts central sales tax. In the case of M/s. Hindustan Coco cola Beverage [2007 (8) TMI 12 - SUPREME COURT] that when the payee has included the amount received from the assessee in its return of income and also paid taxes on the said receipts, then there was no question of making any addition u/s. 40a(ia) of the Act for failure to deduct TDS u/s.194C. CIT(A) has also taken support from the decision in the case of M/s.Ansal Land Mark Township P.Ltd.. [2015 (9) TMI 79 - DELHI HIGH COURT] that as long as the payee filed return of income disclosing payment received from the payer and in which the income earned by it is embedded and also paid tax on such income, the assessee would not be attracted as person in default, consequently no disallowance can be made u/s.40a(ia) of the Act for non-deduction of TDS under section 194C of the Act. There is no error in the findings recorded by the learned CIT(A) to delete the addition made by the AO towards disallowance of expenditure u/s. 40a(ia) of the Act for the failure to deduct TDS u/s.194C of the Act. Hence, we uphold the findings of the learned CIT(A) and dismissed the appeal filed by the Revenue.
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