Case Law Details
Ms Bhangal Construction Co. Vs ITO (ITAT Jalandhar)
Simpliciter payment towards hiring charges of cranes cannot be brought within the sweep of the definition of the term work as envisaged in Sec. 194C of the IT Act. We thus are of the considered view that the lower authorities had erred in concluding that as the assessee had failed to deduct tax at source under Sec. 194C of the IT Act on the payments made towards hiring charges of cranes aggregating to Rs. 9,50,600/-, hence the said amount was liable to be disallowed under Sec. 40(a)(ia) of the IT Act. In our considered view, as the assessee was under no obligation to deduct tax at source under Sec. 194C in respect of the payments made towards hiring charges of cranes, therefore, the lower authorities had erred in disallowing the same for the said reason by invoking the provisions of Sec. 40(a)(ia) of the IT Act. We thus not being in agreement with the view taken by the lower authorities that it was obligatory on the part of the assessee to deduct tax at source under Sec. 194C on the payments made towards simpliciter hiring charges of cranes, set aside the order of the CIT(A) and vacate the disallowance of Rs. 9,50,600/- made by the A.O under Sec. 40(a)(ia) of the IT Act.
8. The appeal of the assessee is allowed.
FULL TEXT OF THE ITAT JUDGEMENT
The present appeal filed by the assessee is directed against the order passed by the CIT(Appeals)-2, Jalandhar, dated 17.07.2017, which in turn arises from the assessment order passed by the A.O under Sec. 143(3) of the Income Tax Act, 1961 (for short ‘I.T. Act’) for A.Y. 2013-14, dated 28.03.2016. The assessee assailing the order of the CIT(A) has raised before us the following grounds of appeal:-
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