Case Law Details
ITO Vs Yash Container Terminal Pvt. Ltd. (ITAT Mumbai) – There is no dispute to the fact that the assessee has deducted tax @ 1.12% from the payments made to M/s Laxmichand Dharshi during the financial year 2006-07 u/s 194C of the I T Act being the payment made to sub contractor. According to the AO, such payments made to M/s Laxmichand Dharshi has to be treated as hire charges paid for transportation of containers/trucks as per bills raised since there is no written contract/ sub contract agreement between the parties concerned.
Therefore, the assessee was liable to deduct tax at source as per provisions of sec. 194-I of the I T Act @ 22.44% of the hire charges paid. We find, the CIT(A) has decided the issue in favour of the assessee on two counts. Firstly, according to the CIT(A), the payments made by the assessee to M/s Laxmichand Dharshi for carrying out the work of transportation of containers fall within the meaning of sec. 194C of the I T Act. Secondly, since the deductee assessee has paid the tax due; therefore, in view of the decision of the Honourable Supreme Court in the case of Hindustan Coco Cola Beverages P Ltd (supra), payments cannot be recovered from the deductor.
When the payee has paid tax on an income on which payer fails to deduct tax at source, no liability arises against the payer u/s 201(1).
Please become a Premium member. If you are already a Premium member, login here to access the full content.
