INCOME TAX ACT, 1961

Section 194C(6)

Tax deduction at source - Under section 194C - Payment of transportation charges to sub-contractor - Assessee having obtained PAN of the payee in terms of section 194C(6)

Assessee has undertaken a transport contract for transportation of two wheelers from M/s Honda Motorcycle and Scooter India (P) Ltd. for carrying out the transportation business, assessee hired vehicles from M/s. SFIC and paid a sum of Rs. 14 crores as transport charges. AO disallowed deduction thereof for want of TDS under section 104C. Assessee's case was that it had obtained Permanent Account Number (PAN) of M/s. SFIC and accordingly it was not required to deduct tax in terms of section 194C(6).Held: The year under consideration was assessment year 2015-16 and corresponding previous year was 1-4-2014 to 31-3-2015. Hence provision as amended by Finance (No.2) Act, 2009 shall apply. Hence position explained in clause (b) amended section 194C(6) with effect from 1-6-2015 would apply and accordingly payer, i.e., assessee was required to obtain 'permanent Account Number' only from payee for paying the charges without deduction of tax and since assessee-complied with provisions of section 194C(6) assessee was not required to deduct tax under section 194C(3) and, therefore, no disallowance could be made under section 40(a)(ia).

Distinguished:CC (Import), Mumbai v. Dilip Kumar & Co. & Ors. [Civil Appeal No.3327 of 2007, dt. 30-7-2018] : 2018 TaxPub(EX) 737 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2015-16

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