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PRINCIPAL COMMISSIONER OF INCOME TAX RAJKOT-1, RAJKOT Versus PARAS A MODI

2016 (9) TMI 702 - GUJARAT HIGH COURT

TDS u/s 194C - non deduction of tds on payment of transportation or carriage of good - addition made by the Assessing Officer u/s. 40(a) (ia) - Held that:- As decided in Commissioner of Income Tax-I vs. Valibhai Khanbhai Mankad [2012 (12) TMI 413 - GUJARAT HIGH COURT ] the exclusion provided in sub-section (3) of section 194C from the liability to deduct tax at source under sub-section (2) would thus be complete the moment the requirements contained therein are satisfied. Such requirements, prin .....

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so of section 194C(3) are satisfied, the liability of the payee to deduct tax at source would cease. The requirement of such payee to furnish details to the income tax authority in the prescribed form within prescribed time would arise later and any infraction in such a requirement would not make the requirement of deduction at source applicable under sub-section (2) of section 194C of the Act. - no application of section 40(a)(ia) required - Decided in favor of assessee. - TAX APPEAL NO. 711 of .....

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disallowance under Section 40(a)(ia) of the Income Tax Act made by the Assessing Officer on alleged breach of Section 194C of the Act. The Assessee was a transporter and had made expenditure of ₹ 83.02 lacs towards transportation or carriage of goods and had made no deduction of tax at source despite the payments exceeding ₹ 50,000/-. The Assessing Officer disallowed the claim on the ground that the assessee submitted Form J long after the passing of the due date of 30.06.2011. The .....

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0(a)(ia) of the Act, payments made towards interest, commission or brokerage etc. would be excluded for deduction in computing the income chargeable under the head 'profits and gains of business or profession', where though tax was required to be deducted at source, is not deducted or where after such deduction, the same has not been paid on or before the due date. Thus for application of section 40(a)(ia) of the Act, the foremost requirement would be of tax deduction at source. 6. Secti .....

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mount of any sum credited or paid or likely to be credited or paid to the sub-contractor during the course of business of plying, hiring or leasing goods carriages, on production of a declaration to the person concerned paying or crediting such sum in the prescribed form and verified it in the prescribed manner within the time as may be prescribed, if such sub-contractor is an individual who has not owned more than two goods carriages at any time during the previous year. 7. The exclusion provid .....

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y of the assessee to deduct tax on the payments made or to be made to such sub-contractors would cease. In fact he would have no authority to make any such deduction. 8. The later portion of sub-section (3) which follow the further proviso is a requirement which would arise at a much later point of time. Such requirement is that the person responsible for paying such sum to the sub-contractor has to furnish such particulars as prescribed. We may notice that under Rule 29D of the Rules, such decl .....

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