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2022 (1) TMI 840 - HC - Income TaxTDS u/s 194C - Disallowance u/s 40(a)(ia) - payment of transportation contracts - whether the Tribunal was right in law in aggregating the payments on the basis of truck numbers for the purpose of determining the limit of ₹ 50,000/- under Section 194C (3) of the IT Act? - HELD THAT:- The action of the revenue in denying the deduction under Section 40 (a) (ia) of the Act on the premise that the aggregate of the truck amount paid by the assessee with the different truck drivers was exceeding ₹ 50,000/- cannot be countenanced as the contract cannot be with the trucks, it is with the personnel/driver of the truck/truck operators. The whole attempt made by the revenue to bring the assessee under the ambit of Section 194C to deny the deduction under Section 40(a) (ia) is not supported by the material evidence. The truck operators if not the truck owners, cannot be considered as the sub contractors for the purpose of Section 194C (2) of the Act. In the circumstances, we deem it proper to set aside the order of the Tribunal as well as the authorities and to restore the matter to the file of the Assessing Officer to reconsider the matter afresh in the light of the observations made herein above. AO shall record a finding after examining the contract if any, entered by the assessee with the truck owners/ operators and an appropriate decision shall be taken in accordance with law. In the facts and circumstances of the case, it is made clear that the registration number of trucks/truck owner would not be relevant for the purpose of deciding the applicability of Section 194 C of the Act but it is the personnel/truck operator from whom the trucks are hired. With the aforesaid observations and directions, appeal stands allowed as indicted above sans answering the substantial questions of law, directing the Assessing Officer to re-examine the matter, keeping open all the rights and contentions of the parties.
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