The Raipur bench of the Income Tax Appellate Tribunal (ITAT) has continued that the stipulations towards the tax deduction at source (TDS) are not suitable for the buying of spare parts.
So as to pass the order with respect to the taxpayer the company towards the non-deduction of TDS on the payment of Rs 1,47,153 to Jaika automobiles upon the payment of interest on the car loan whose amount is Rs .1,18,830/-, etc.
The taxpayer specified that the essential elements of the cost engaged in the supply of spare parts for repair of the car engine to which the separate invoice has been asked. Towards the interest furnished for the car loan, it states that the interest was furnished to the Bank of India towards the car loan and not to the Magma finance as misunderstood through PCIT. the ledger copy of the bank of India car loan account has stated on.
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“The two judges N K Chaudhary and Accountant Member Pradip Kumar Kedia comprehend that thus, where interest has been actually paid to the Bank, no obligation for deduction of TDS under s.194A of the Act would arise. With reference to TDS on brokerage amounting to Rs.8010/- and Rs.7980/- without deducting TDS, it is the case of the assessee that the allegation made for non-deduction of TDS is untrue. The TDS was actually deducted for which payment proof was placed on record.”
“Refusing the petition in favour of the taxpayer the bench commented that as regards non-deduction of TDs on payment of Rs.1,47,153/- to Jaika Automobiles, it is the case of the assessee that the major component of cost involved supply of spare parts for repair of a car engine for which separate invoice was raised.”
“Hence, liability under section 194C of the Act does not arise on the purchase of spare parts. We find that the assessee has given a plausible reply in the revisional proceedings on all these points. The PCIT has not rebutted any of the submissions of the assessee while coming to adverse conclusions. Such a course is not permissible while fixing serious consequences and thus cannot be endorsed. Hence, the action of the PCIT on this issue is set aside and action of the AO is restored.”
