2011 (12) TMI 713 - AT - Income Tax

Summary

Issues involved:
The only issue raised in this case is the deletion of addition/disallowance of Rs. 36,57,034/- made by the Assessing Officer u/s. 40(a)(ia) of the I.T.Act'61.

Summary of Judgment:

Issue: Deletion of addition/disallowance u/s. 40(a)(ia) of the I.T.Act'61.

The Assessing Officer disallowed the expenditure of Rs. 64,36,384/- for non-deduction of tax at source u/s. 200(1) of the I.T Act'61. The Commissioner of Income-tax (Appeals) confirmed an addition of Rs. 26,19,050/- but deleted the balance amount of Rs. 3,657,034/-, stating that payments made to 7 parties were for purchase of equipment/machinery and not subject to tax deduction u/s. 194C. The Commissioner relied on CBDT guidelines and a High Court decision to support this conclusion.

The revenue appealed the decision, arguing that the AO's order should be upheld. The assessee contended that the Commissioner's decision was justified as the material was supplied as per specifications. After reviewing the bills and material on record, the Tribunal upheld the Commissioner's decision, noting that the transactions were related to the purchase of material with specific specifications, in line with the Punjab & Haryana High Court decision.

Therefore, the Tribunal dismissed the revenue's appeal, affirming the deletion of the addition made by the Assessing Officer.

This judgment was pronounced in open court on 15-12-2011.