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2021 (8) TMI 939 - AT - Income TaxTDS u/s 194I - hire charges paid for the equipment disallowed - addition u/s 40(a)(ia) - As per assessee amount on account of hire charges of equipment was deducted by the Principal Contractor NCC Limited from the amount payable to the assessee-company and since there was actually no payment directly made by the assessee-company on account of hire charges, there was no requirement of deduction of tax at source - HELD THAT:- We are unable to accept the contention of assessee as rightly held by the authorities below, the amount in question on account of hire charges for equipment was payable by the assessee-company to M/s. NCC Limited and even though it was adjusted by NCC Limited against the amount payable to the assessee-company, such adjustment was not possible without crediting the said amount to the account of NCC Limited. The provision of section 194I thus was clearly attracted and the assessee-company was liable to deduct tax at source from the amount in question towards equipment hire charges. Since there was a failure on account of the assessee-company to comply with this requirement, the provision of section 40(a)(ia) was rightly invoked by the Assessing Officer. However find merit in the alternative contention raised by the ld. Counsel for the assessee that the amount of equipment hire charges in question having been already offered to tax by NCC Limited, the assessee-company cannot be treated as assessee in default for non-deduction of tax at source from the said payment as held in the case of Hindusthan Coca Cola Beverages Pvt. Limited [2007 (8) TMI 12 - SUPREME COURT] and there is no question of making disallowance under section 40(a)(ia). As rightly contended by the ld. D.R., this claim made by the ld. Counsel for the assessee specifically for the first time before the Tribunal, however, requires verification and the matter may, therefore, be sent back to the AO for the limited purpose of this verification. We accordingly restore this issue to the file of the Assessing Officer for the limited purpose of verifying the claim of the assessee - Appeal of the assessee as partly allowed for statistical purposes.
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