Section 194 of the Income Tax Act

Income-tax Act, 2025: s.393

Section 194 of the Income-tax Act, 1961 corresponds to section 393 (Tax to be deducted at source) of the Income-tax Act, 2025.

Read section 393 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 194 is Hindustan Aluminium Corporation Ltd. v. CIT (144 ITR 474), cited in 119 of the 87 judgments on BharatTax that turn on this section.

Leading authorities on Section 194

Hindustan Aluminium Corporation Ltd. v. CIT
144 ITR 474 · 1983 · High Court
119
citing judgments

The Calcutta High Court held that a lump sum revenue expenditure, which is of a significant amount and provides benefits spread over several years, can be allowed as a deduction proportionately over the period of benefit. This approach prevents distortion of the profits of a single assessment year.

CIT v. A. Gajapathy Naidu
53 ITR 114 · 1964 · Supreme Court
73
citing judgments

An Income Tax Officer assessing income must determine the assessee's system of accountancy and, for the mercantile system, ascertain when the right to receive the income legally accrued.

Binani Cements Ltd. v. CIT
380 ITR 116 · 2016 · High Court
60
citing judgments

Expenditure incurred in respect of abandoned cell towers is an allowable business expenditure under Section 37(1) of the Income-tax Act, 1961, especially when no new business was being set up by the assessee.

CIT v. Graphite India Ltd.
221 ITR 420 · 1996 · High Court
52
citing judgments

Expenditure incurred for the expansion of an existing business is revenue in nature and allowable as a deduction if it does not create a new asset. Accounting entries in books of accounts do not solely determine the allowability of an expenditure for income tax purposes.

Asiatic Oxygen Ltd. v. CIT
190 ITR 328 · 1991 · High Court
33
citing judgments

Expenditure incurred on projects or assets that are written off in accounts is an incidental business loss if the asset never came into existence or the expenditure was incurred wholly and exclusively for business purposes.

Toyo Engg. India Ltd. v. JCIT
5 SOT 616 · 2006 · ITAT
28
citing judgments

Tax deducted at source (TDS) is a method of collection, not a levy of tax. Credit for TDS can be granted even if the corresponding income is not yet assessable, as long as the assessee follows a consistent method of accounting.

116 TAXMANN 606 (SC); Indian Molasses Co. (Private) Ltd. v. CIT
53 ITR 134 · 1964 · Supreme Court
25
citing judgments

A claim for a deduction or allowance must be made in the relevant assessment year. If an assessee fails to claim an amount in the correct year, it cannot be claimed in a subsequent year.

CIT v. Qatar Airways
332 ITR 253 · 2011 · High Court
24
citing judgments

A difference between the commercial price and published price of airline tickets is not a special commission or brokerage under section 194H, if the airline has discretion to reduce the published price.

Delhi Tourism & TDC Ltd. v. CIT
285 ITR 114 · 2006 · High Court
21
citing judgments

An assessee cannot claim a deduction for an expenditure in a subsequent assessment year if it was a known expenditure in an earlier year and the assessee failed to provide for it or claim it in that earlier year.

Collector. In Baldeep Singh v. UOI
199 ITR 628 · 1993 · High Court
20
citing judgments

The Land Acquisition Collector is the legal person responsible for paying income by way of interest, not the court, as the Collector holds the funds and is accountable for the payment.

Judgments on Section 194

Shilpraj Developers Pvt. Ltd., Surat vs. The JCIT, T.D.S. Range, Surat

In the result, appeal of assessee in ITA No

ITA 2054/AHD/2016[2008-09]Status: DisposedITAT Surat03 Mar 2021AY 2008-09

Bench: Shri Pawan Singh, Hon'Ble & Dr.Shri Arjun Lal Saini, Hon'Ble(Virtual Hearing) आ.अ.सं./I.T.A No.3160/Ahd/2014 & 2054/Ahd/2016 "नधा"रण वष"/Assessment Year: 2008-09 Shilpraj Developers Pvt. Ltd., Vs. 1) The Ito/Tds-2, 12, Suryakiran Apt., Ghod-Dod Surat. Road, Surat – 395007. Jcit/T.D.S. [Pan: Aadcs 3045 H] Range/Surat. अपीलाथ" / Appellant ""यथ"/Respondent "नधा"रतीक"ओर से /Assessee By Shri Ashwin Parekh – Ca राज"वक"ओर से /Revenue By Shri Ritesh Mishra – Cit(Dr) सुनवाई की तारीख/ Date Of Hearing: 03.03.2021 उ"घोषणा क" तार"ख/Pronouncement On: 03.03.2021 आदेश /O R D E R Per Pawan Singh, Judicial Memeber: 1. These Two Appeals By The Assessee Are Directed Against The Order Of Ld. Commissioner Of Income Tax (Appeals)-4 & 3, Surat For Assessment Year (Ay) 2008-09. In Ita No.316/Ahd/2014, The Assessee Has Challenged The Validity Of Order Under Section 201(1) R.W.S 201(1A) Passed By Ito- Tds. & In Ita No.2054/Ahd/2016, The Assessee Has Challenged The Validity Of Penalty Levied Under Section 271C Of The Act. As Both The Appeals Are Arising Of The Order Passed By Ito-Tds Under Section 201(1)/201(1A) & Are Inter- Connected With Each Other, Therefore, With The Consent Of The Shilpraj Developers Pvt. Ltd., Vs. Ito/Tds-2/Srt /

Section 143(3)Section 194Section 2(22)(e)Section 201Section 201(1)Section 271(1)(c)Section 271C

Shilpraj Developers Pvt.Ltd., Surat vs. The Income Tax Officer, TDS- 2, Surat

In the result, appeal of assessee in ITA No

ITA 3160/AHD/2014[2008-09]Status: DisposedITAT Surat03 Mar 2021AY 2008-09

Bench: Shri Pawan Singh, Hon'Ble & Dr.Shri Arjun Lal Saini, Hon'Ble(Virtual Hearing) आ.अ.सं./I.T.A No.3160/Ahd/2014 & 2054/Ahd/2016 "नधा"रण वष"/Assessment Year: 2008-09 Shilpraj Developers Pvt. Ltd., Vs. 1) The Ito/Tds-2, 12, Suryakiran Apt., Ghod-Dod Surat. Road, Surat – 395007. Jcit/T.D.S. [Pan: Aadcs 3045 H] Range/Surat. अपीलाथ" / Appellant ""यथ"/Respondent "नधा"रतीक"ओर से /Assessee By Shri Ashwin Parekh – Ca राज"वक"ओर से /Revenue By Shri Ritesh Mishra – Cit(Dr) सुनवाई की तारीख/ Date Of Hearing: 03.03.2021 उ"घोषणा क" तार"ख/Pronouncement On: 03.03.2021 आदेश /O R D E R Per Pawan Singh, Judicial Memeber: 1. These Two Appeals By The Assessee Are Directed Against The Order Of Ld. Commissioner Of Income Tax (Appeals)-4 & 3, Surat For Assessment Year (Ay) 2008-09. In Ita No.316/Ahd/2014, The Assessee Has Challenged The Validity Of Order Under Section 201(1) R.W.S 201(1A) Passed By Ito- Tds. & In Ita No.2054/Ahd/2016, The Assessee Has Challenged The Validity Of Penalty Levied Under Section 271C Of The Act. As Both The Appeals Are Arising Of The Order Passed By Ito-Tds Under Section 201(1)/201(1A) & Are Inter- Connected With Each Other, Therefore, With The Consent Of The Shilpraj Developers Pvt. Ltd., Vs. Ito/Tds-2/Srt /

Section 143(3)Section 194Section 2(22)(e)Section 201Section 201(1)Section 271(1)(c)Section 271C

DCIT, New Delhi vs. M/S. Ackruti Safegaurd Systems Pvt. Ltd., Navi Mumbai

In the result, appeal of the Revenue is dismissed

ITA 6173/DEL/2016[2012-13]Status: DisposedITAT Delhi17 Dec 2020AY 2012-13

Bench: Sh. H. S. Sidhuand, Sh. Anil Chaturvedi(Through Video Conferencing) Dcit Vs. Ackruti Safeguard Systems Circle – 1(2), Pvt. Ltd., New Delhi – 110 002 D-89/3, Ttc Industrial Area, Midc, Turbhe, Navi Mumbai – 400 705 Pan No. Aacca 4087 E (Appellant) (Respondent) Assessee By -None- Revenue By Sh. Prakash Dubey, Sr. Dr Date Of Hearing: 14/12/2020 Date Of Pronouncement: 17/12/2020 Order Per Anil Chaturvedi, Am: This Appeal Filed By The Revenue Is Directed Against The Order Dated 26.09.2016 Of The Commissioner Of Income Tax (A)-I, New Delhi Relating To Assessment Year 2012-13. 2. The Relevant Facts As Culled From The Material On Records Are As Under : Dcit Vs. Ackruti Safeguard Systems Pvt. Ltd. A.Y. 2012-13 2 3. Assessee Is A Company Stated To Be Engaged In The Business Of Manufacturing/ Trading / Exporting /Distributing Of All Kinds Of High Security Number Plates & Other Connecting Activities. Ao Has Noted That The Business Of The Assessee Had Not Commenced Till The End Of The Year Under Consideration. Assessee Filed Its Return Of Income For A.Y. 2012-13 On 29.09.2012 Showing Loss Of Rs.69,05,408/-. Subsequently, It Revised The Return Of Income On 29.03.2014 Declaring Loss Of Rs.1,88,21,050/-. The Case Was Selected For Scrutiny & Thereafter, Assessment Was Framed U/S 143(3) Vide Order Dated 30.03.2015 & The Total Loss Was Determined At Rs.35,61,712/-.

Section 139(4)Section 143(3)Section 194Section 40