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2020 (8) TMI 119 - AT - Income TaxTDS u/s 194C - Disallowance u/s. 40(a)(ia) - freight charges paid without deduction of tax - HELD THAT:- A plain reading of the provisions of subsection 6 of section 194C of the Act reveals that the assessee shall not deduct any TDS on the payment made to the contractor engaged in the business of plying, hiring or leasing goods carriages, on furnishing of his PAN to the assessee. There is no ambiguity about the fact that contractor has furnished its PAN to the assessee as evident from the page number 13 of the paper book where the copy of the PAN is placed. As such the contractor has discharged its liability by furnishing PAN to the assessee for non-deduction of TDS under section 194C (6) of the Act. Accordingly the assessee did not deduct the TDS. We also note that the requirement under sub-section 7 of section 194C of the Act for furnishing PAN to the prescribed authority within the prescribed time and form is procedural in nature as held in the case of Vali bhai Khan bhai Mankad [2011 (4) TMI 887 - ITAT, AHMEDABAD]. If the assessee failed to furnish the requisite form to the prescribed authority within the time, he cannot be made subject to the disallowance of transport expenses on account of non-deduction of TDS. Accordingly, we hold that there cannot be any disallowance of the transport expenses incurred by the assessee after 30th September 2009. TDS u/s 194C - HELD THAT:- We hold that the expenses claimed by the assessee on account of transport charges cannot be disallowed on account of non-deduction of TDS under section 194C of the Act. Hence the ground of appeal of the assessee is allowed. Disallowance of amount of interest on the amount advanced as interest-free advance & loans - addition u/s 40A - whether the assessee has given loans and advances without interest to the specified persons for the commercial purposes? - HELD THAT:- Assessee on one hand is advancing interest free loans and advances to his father proprietary concern and on the other hand the assessee is paying interest on the loan obtained from his father. In the case on hand it is a transaction between the individual assessee and the Proprietary concerns of the father of the assessee. Accordingly we are of the view that the facts are different from the present case with the facts of the case referred by the assessee. We find force in the argument of the assessee that there cannot be any disallowance of any interest expenses for the amount advanced to the aforesaid firms without any interest to the extent of the amount available with the assessee in the form of capital. Accordingly we direct the AO to work out the amount of loans and advances given without interest after reducing the own fund in the form of capital of the assessee from the said amount. Thus the ground of appeal of the assessee is partly allowed.
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