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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC-3’, NEW DELHI
Before: SHRI J. SUDHAKAR REDDY
ORDER This is an appeal filed by the Assessee directed against the order of the Ld. Commissioner of Income Tax (Appeals)-XXV, New Delhi pertaining to the A.Y. 2007-08 dated 2.6.2014. In this appeal the assessee disputes the applicability of provisions of section 194C of the Income Tax Act, 1961 (the Act) and consequently disputes disallowance made under section 40a(ia) of the Act.
After hearing rival contentions I find that the assessee is an individual, and the disallowance was made by the Assessing Officer on the ground that the assessee has not deducted tax at source for labour charges paid of Rs.3,85,070/- under section 194C of the Act.
The amendment to section 194C was brought w.e.f. 01/06/2007, wherein individuals and HUF’s of certain categories were brought within the ambit of Section 194C of the Act. Prior to that, individuals had no liability to deduct the tax at source. As the financial year in question is 2006- 2007, this section cannot be applied. Consequently the disallowance made under section 40a(ia) of the Act is bad in law. In my view the assessee has rightly relied on the decision of the Calcutta Bench of the Tribunal in the case of ACIT vs. Smt. Keya Seth, Circle-40, Kolkata vide and 843/Kol/2010 dated 11.03.2011. Thus I delete the disallowance made under section 40a(ia) of the Act and allow ground No. 4 of the assessee.
The Ld. counsel for the assessee has not pressed all the other grounds. Hence we dismiss the same as not pressed.
In the result the appeal of the assessee is allowed in part. Pronounced in the Open Court on 29th June, 2016.