TMI Blog2021 (8) TMI 939X X X X Extracts X X X X X X X X Extracts X X X X ..... e-company to M/s. NCC Limited and even though it was adjusted by NCC Limited against the amount payable to the assessee-company, such adjustment was not possible without crediting the said amount to the account of NCC Limited. The provision of section 194I thus was clearly attracted and the assessee-company was liable to deduct tax at source from the amount in question towards equipment hire charges. Since there was a failure on account of the assessee-company to comply with this requirement, the provision of section 40(a)(ia) was rightly invoked by the Assessing Officer. However find merit in the alternative contention raised by the ld. Counsel for the assessee that the amount of equipment hire charges in question having been already of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 961. 2. The assessee in the present case is a Company, which is engaged in the business of Engineering and Construction Work. The return of income for the year under consideration was filed by it on 09.10.2010 declaring total income of ₹ 48,15,183/-. As noted by the Assessing Officer during the course of assessment proceedings, the assessee-company had hired equipment during the year under consideration and paid an amount of ₹ 8,95,334/- on account of hire charges without deducting tax at source as required under section 194I of the Act. He, therefore, required the assessee-company to explain as to why the hire charges of ₹ 8,95,334/- paid for the equipment should not be disallowed by invoking the provision of section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on offered by the assessee to be acceptable and proceeded to disallow the equipment hired of ₹ 8,95,334/- under section 40(a)(ia) in the assessment completed under section 143(3) vide an order dated 15.03.2013. The disallowance made by the Assessing Officer on account of equipment hire charges by invoking the provision of section 40(a)(ia) was challenged in the appeal filed before the ld. CIT(Appeals) and the submissions made during the course of assessment proceedings before the Assessing Officer were reiterated on behalf of the assessee-company before the ld. CIT(Appeals) in support of its case that the disallowance made by the Assessing Officer under section 40(a)(ia) was not sustainable. The ld. CIT(Appeals), however, did not find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal. 4. We have heard the arguments of both the sides and also perused the relevant material available on record. The first contention raised by the ld. Counsel for the assessee is that the amount of ₹ 8,95,334/- on account of hire charges of equipment was deducted by the Principal Contractor NCC Limited from the amount payable to the assessee-company and since there was actually no payment directly made by the assessee-company on account of hire charges, there was no requirement of deduction of tax at source and the question of disallowance under section 40(a)(ia) could not arise. We are unable to accept this contention of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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