ITO Vs M/s. Sugarchem (ITAT Mumbai)
The AO in the course of assessment proceedings requested the assessee to furnish the reasons why no TDS was deducted in respect of transportation charges. The assessee furnished PAN details of the transporters to the tune of 67,24,412/- out of 80,23,971/- in respect of nine transporters referred to in the assessment order and claimed that no TDS was deductible on the payments made as the transporters have furnished their PAN details to the assessee as per provisions of Section 194C(6) of the Act. However, the AO was of the view that since the assessee did not furnish in the prescribed format the details of those contractors where no TDS was made to the prescribed authority as per provisions of Section 194C(7), the assessee was not entitled to the benefit of provisions of Section 194C(6) and therefore he invoked provisions of Section 40(a)(ia) to disallow the payments made to transporters amounting to 80,23,971/-.
It has been held that if the assessee complies with the provisions of Section 194C(6) disallowance under Section 40(a)(ia) does not arise just because there is violation of provisions of Section 194C(7) of the Act. Respectfully following the said decision we hold that both the sections, i.e. Section 194C(6) and Section 194C(7) are independent of each other and cannot be read together to attract disallowance under Section 40(a)(ia) r.w.s. 194C of the Act.
