TDS applicable on Karigar/ Embroidery charges but not on Purchase of Sarees

CA Kanhaiya Kumar Agarwal

Brief Facts of the Case and Question of Law:

Brief Facts

The assessee is a dealer of sarees and AO while framing the assessment disallowed karigar /embroidery charges by invoking the provision of section 40(a)(ia) of the act for non-deduction of TDS u/s 194C of the Act. There was a survey operation on the business premises of the assessee u/s 133A of the Act and during survey operation, certain karigar/embroidery slips were found and impounded. Revenue came to know that assessee has paid embroidery charges amounting to Rs.1,14,59,470/- without deducting TDS u/s 194C of the Act.

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