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2018 (12) TMI 1514 - AT - Income TaxTDS u/s 194C - Non deduction of TDS u/s 40(a)(ia) - freight and loading / unloading charges - Held that:- There is no dispute about the assessee being engaged in transport and handling services. It admittedly made the impugned freight and loading / unloading charges to four parties M/s Jai Gopal Pariwahan, Cargo Liners Pvt. Ltd., Jagannath Enterprise and R.M. Logistics. This what has made both the lower authorities to invoke sec. 40(a)(ia) to disallow the twin payments on account of non-deduction of TDS. CIT-DR vehemently contends during the course of hearing that the assessee has made the impugned payments u/s 194C as contractual expenses & therefore, it ought to have deducted mandatory TDS thereupon. He strongly supports both the lower authorities’ action invoking the impugned disallowance. No reason to concur with Revenue’s above vehement contentions. The CIT(A)’s above extracted detailed reasoning makes it clear that he has nowhere concluded that the assessee’s payees had ever made themselves liable for its freight or loading / unloading responsibilites nor there is any material on record indicating the assessee to have passed on any of its contractual liability to the four payees thereby treating them as sub-contractors inviting sec. 194C TDS deduction. The appellant was not liable to deduct TDS u/s. 194C(1) for payments made to the outside parties and consequently the disallowance made u/s.40(a)(ia) by the authorities below are deleted We adopt the above detailed reasoning mutatis mutandis to conclude that both the lower authorities have erred in invoking the two disallowance(s) under challenge u/s 40(a)(ia) of the Act. The same are accordingly deleted. - Decided in favour of assessee.
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