No disallowance u/s. 40(a)(ia) where payments made were apparently less than Rs. 20,000 each and to each party less than Rs. 50,000 per year, as per t

Court :Mumbai Bench of the Income-tax Appellate Tribunal

Citation :Vikas Road Carriers Ltd. Vs. ITO [2010-TIOL-417-ITAT-MUM]

Brief :In the case of Vikas Road Carriers Ltd. v. ITO [2010-TIOL-417-ITAT-MUM] the Mumbai Bench of the Income-tax Appellate Tribunal (“the Tribunal”), ruled that, in light of the very typical facts of the case, no dis allowance could be made under section 40(a)(ia) of the Income Tax Act, 1961 (“the Act”), for non-withholding of tax since the payments to the transporters were less than Rs. 20,000 each, and less than Rs. 50,000 in a year to any party and hence did not attract the withholding tax provisions of section 194C of the Act.

The Tribunal relied very heavily on the fact that while the assessee had given details of expenses incurred, the revenue authorities were unable to dispute the assessee’s statement that the expenses in question did not exceed the limit of Rs. 20,000 per payment, and Rs. 50,000 per payee per year.

Facts of the case

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