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2017 (7) TMI 536 - AT - Income TaxTDS u/s 194C - Deduction u/s 40(a)(ia) - expenditure incurred by the assessee under the head ‘freight charges’- Held that:- As the assessee neither entered into any oral or written agreement with the assessee nor taken vehicles on regular contract basis. The assessee has taken vehicles on mere hire basis to be deployed in the places where he has undertaken transport contract with M/s. ITC Limited. The risk associated with the goods till transportation to the destination is rest with the assessee. The lorry owners/drivers had not undertaken any responsibility of risk in the goods. Therefore, we are of the view that the payments made to lorry owners are not liable for TDS as per the provisions of section 194C of the Act, consequently, the expenditure incurred under the head ‘freight charges’ are not liable for disallowance u/s 40(a)(ia) of the Act. The CIT(A) after considering relevant submissions of the assessee has rightly deleted additions made by the A.O. - Decided in favour of assessee. Computation of capital gain on sale of land - assessable under the head ‘income from business’ or under the head ‘ income from capital gains - application of the provisions of section 50C - Held that:- The income from sale of land is assessable under the head ‘income from business’, but not under the head ‘income from capital gains’. We further observed that the assessee has filed necessary evidences to prove, he had converted his capital asset into stock-in-trade, developed the said land before it was sold. The assessee has computed resultant profit from sale of the land by applying the provisions of section 45(2) of the Act. When the income is computed under the head ‘income from business’, the provisions of section 50C of the Act has no application for determination of full value of consideration for the purpose of computation of capital gain. The CIT(A) after considering the relevant provisions of the Act and also submissions of the assessee rightly directed the A.O. to delete additions made towards computation of capital gains. - Decided in favour of assessee.
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