Section 194C is  not applicable on payments  made by assessee Unless a charge is being determined: ITAT [Read Order]

The Kolkata bench of Income Tax Appellate Tribunal (ITAT) ruled that Section 194C of the Income Tax Act,1961 is  not applicable on the  payments  made by the assessee  unless a charge is being determined.

The Assessee RSD Natural Resources Private Ltd after filing the return of income assessee case was selected for scrutiny.Thereafter  the assessing officer concluded teh assessment and made  disallowance  under section 40(a)(ia) because the assessee did not deduct TDS as per Section 194C on clearing charges to various entities.Accordingly the AO made addition

Aggrieved by the order the assessee filed an appeal before the CIT(A) who confirmed the addition . Therefore  the assessee filed another appeal before the tribunal.

During the adjudication the bench observed that  the assessment order  suggests that it is totally a non-speaking assessment order. The  Assessing Officer has nowhere determined as to how Section 194C is applicable on the payments made by the assessee. Unless a charge is being determined, disallowance under section 40(a)(ia) cannot be made.

Further after considering the additional evidence submitted by the assessee the bench observed that the Assessing Officer has not adjudicated as to how TDS was required to be deducted by the assessee under section 194C of the Income Tax Act.

After reviewing the facts the ITAT bench of Rajpal Yadav, (Vice-President) and Rajesh Kumar(Accountant Member) observed that Section 194C of the Income Tax Act,1961 is  not applicable on the  payments  made by the assessee  unless a charge is being determined.

S. Jhajharia ,counsel appeared for the assessee and B.K. Singh,counsel appeared for the revenue.

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