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2018 (4) TMI 251 - ITAT BANGALORETDS u/s 194C - tds on water charges paid - Held that:- Why there is difference between the amount received by the assessee from the clients and the amount paid to M/s Gangothri Water Supply was explained by the ld counsel for the assessee as an excess payment received which the clients did not claim from the assessee. In assessment year 2014-15, there is no such excess and the debit and credit in the water charges account tally. This proves the case of the assessee and there is no markup in procuring and supplying water by the assessee to his clients and, therefore, the contention put forth by the assessee that the water charges paid to M/s Gangothri Water Supply was never claimed by the assessee as a deduction in the profit and loss account and, therefore, the same cannot be subject matter of addition u/s 40a(ia) has to be accepted - Therefore of the view that the addition made in both the assessment years cannot be sustained and the same is directed to be deleted. Section 194C Explanation (iv) which defines ‘work’ for the sec. 194C of the Act specifically excludes supply of a product according to the requirements of the customers by using material purchased from a person other than such customers. Water in the present case was purchased by the assessee not from the customers but from a 3rd party and supplied to its clients. Therefore, the price paid for purchase of water in my view cannot be construed as a payment for payment to a contractor for carrying out any work. - Decided in favour of assessee.
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