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2019 (9) TMI 1318 - AT - Income Tax


Issues:
1. Non-deduction of tax under section 194C of the Income Tax Act, 1961.
2. Validity of deletion of addition made by the Assessing Officer.

Analysis:
1. The primary issue in this case revolves around the non-deduction of tax under section 194C of the Income Tax Act, 1961. The Revenue contended that the addition of ?3,49,02,235/- made by the Assessing Officer should not have been deleted by the Learned Commissioner of Income Tax (Appeals) (Ld. CIT(A)). The Assessing Officer found that the assessee had made freight payments without deducting TDS, leading to the disallowance of the sum under section 40(a)(ia) of the Act. The Ld. CIT(A) initially upheld this decision, but the matter was restored to the Ld. CIT(A) by the ITAT for fresh adjudication with specific directions.

2. The Ld. CIT(A) called for necessary details from the assessee, who provided evidence supporting their claim of working as a transport commission agent and not owning any trucks. The Ld. CIT(A) admitted additional evidence, despite objections from the AO, and ultimately deleted the addition based on the submissions made by the assessee. The ITAT, in its analysis, noted that the assessee acted as an agent and was not required to deduct TDS on payments to truck owners. Additionally, the ITAT found that the assessee had collected Form 15-I before making payments, absolving them from TDS obligations.

3. The ITAT dismissed the Revenue's appeal, emphasizing that the assessee had complied with the provisions of section 194-C by collecting the necessary forms and therefore was not liable to deduct TDS. The ITAT's decision was based on the understanding that non-compliance with certain procedural formalities did not affect the deductibility of tax under section 40(a)(ia). The appeal filed by the Revenue was ultimately dismissed, upholding the deletion of the addition made by the Assessing Officer.

This detailed analysis highlights the key legal arguments and findings in the judgment, addressing the issues raised by the Revenue and the assessee regarding the non-deduction of tax under section 194C of the Income Tax Act, 1961.

 

 

 

 

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