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TMI Blog2015 (10) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... A). AR has relied on an order passed by the Delhi bench of the tribunal in ACIT Vs Sanjay Kumar (2011 (7) TMI 662 - ITAT, Delhi) in which it has been held that the payment made by the assessee for taking cranes on lease on time basis, did not constitute payment with regard to ‘works contract’ as defined in sec. 194C and hence the assessee was not required to deduct tax at source under this action. No contrary precedent has been brought to our notice by the ld. DR. Thus we hold that the authorities below were not justified in making and sustaining disallowance u/s 40(a)(ia) of the Act in the given circumstances. - Decided in favour of assessee. Depreciation on Earth moving machine - @ 30% allowed by CIT(a) as against 15% allowed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led upon to explain as to why no tax at source was deducted, the assessee tendered its explanation that LDS Engineers had requested the assessee for not making any deduction of tax at source due to the reasons explained in their letter, a copy of which was also placed before the A.O. Not convinced, the Assessing Officer held that the tax at source was required to be deducted on the payment made to LDS Engineers and the failure to do so rightly attracted the provisions of sec. 40(a)(ia) of the Act. He, therefore, made disallowance of the said sum. This action of the A.O was echoed by the ld. first appellate authority, who treated the amount paid to LDS Engineers as covered u/s 194C of the Act. The assessee is aggrieved against the sustenance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amended provisions of section 40(a)(ia) of the I. Tax Act, the aforesaid principal payment of Excavation charges paid to LDS Engineers on 31.3.2006 on which TDS was not deducted, amounting to ₹ 6,72,000/- is not deductible in the Profit loss account. Therefore, the amount of ₹ 6,72,000/- is disallowed u/s 40(a)(ia) of I. Tax Act and added back to the total income of the assessee company. 5. A bare perusal of the above extracted para transpires that the Assessing Officer has not referred to violation of any particular section requiring the assessee to make deduction of tax at source etc. He simply held that the assessee was required to deduct tax at source and the failure to do so has resulted in the invocation of sec. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the burden shifts on the assessee to exhibit the reasons as to how the payment made did not violate that section triggering disallowance u/s 40(a)(ia) of the Act. To put in simple words, the Assessing Officer, at the first instance, is under obligation to bring the payment made by the assessee within any of the relevant sections such as 194A, 194C, 194H or 194I etc. It is only when he makes out a clear cut case of the obligation of the assessee to deduct tax at source under any of such specific sections, that the question of invoking section 40(a) can arise. The AO cannot pick up any item of expense debited to the Trading or Profit and loss account and disallow the same by invoking section 40(a)(ia) of the Act generally without first show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on an order passed by the Delhi bench of the tribunal in ACIT Vs Sanjay Kumar (2011) 15 Taxmann.com 230 (Delhi) in which it has been held that the payment made by the assessee for taking cranes on lease on time basis, did not constitute payment with regard to works contract as defined in sec. 194C and hence the assessee was not required to deduct tax at source under this action. No contrary precedent has been brought to our notice by the ld. DR. We find that the facts of the extant case are on all fours with that of Sanjay Kumar (supra). In view of the above discussion and respectfully following the precedent, we hold that the authorities below were not justified in making and sustaining disallowance u/s 40(a)(ia) of the Act in the give ..... X X X X Extracts X X X X X X X X Extracts X X X X
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