Section 194C(7) of the Income Tax Act

Income-tax Act, 2025: s.393

Section 194C(7) falls under section 194C of the Income-tax Act, 1961, which 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 194C(7) is Loyal Motor Service Co. Ltd. v. CIT (14 ITR 647), cited in 48 of the 63 judgments on BharatTax that turn on this section.

Leading authorities on Section 194C(7)

Loyal Motor Service Co. Ltd. v. CIT
14 ITR 647 · 1946 · High Court
48
citing judgments

A payment of bonus or commission is allowable as a business deduction under Section 36(1)(ii) unless it constitutes a distribution of profits or dividends, thereby distinguishing payments genuinely for services from those merely intended to escape taxation.

AMD Metplast (P.) Ltd. v. Dy. CIT
20 Taxmann.com 647 · 2012 · High Court
10
citing judgments

Commission paid to a Managing Director for services rendered is eligible for deduction under section 36(1)(ii) of the Income-tax Act, 1961, provided it is paid as per the terms of employment and not merely to avoid Dividend Distribution Tax (DDT).

Dalal Broacha Stock Broking Pvt. Ltd. v. Addl.CIT
10 ITR (Trib) 357 · 2011 · ITAT
5
citing judgments
Coil Company (P.) Ltd. v. Asst. CIT
8 Taxmann.com 225 · 2010 · ITAT
3
citing judgments

Judgments on Section 194C(7)

Rajesh Jain, Durg vs. DCIT, Circle-1(1), Bhilai

In the result, appeal of the assessee is allowed for statistical purposes

ITA 633/RPR/2026[2018-19]Status: DisposedITAT Raipur09 Sept 2026AY 2018-19

Bench: Shri Partha Sarathi Chaudhuryआयकर अपील सं./Ita No.633/Rpr/2026 "नधा"रण वष" /Assessment Year : 2018-19 Rajesh Jain C/O. Jindutt Enterprises, Above Bank Of Baroda, Opp. Swaroop Theatre, Gurudwara Road, Durg. 491 001 (C.G.) Pan: Acmpj1596N

For Appellant: Shri Ravi Agrawal, CAFor Respondent: Shri Piyush Tripathi, Sr. DR
Section 142(1)Section 143(2)Section 194C(6)Section 194C(7)Section 40

Paresh Vanitlal Shah, Mumbai vs. ITO Ward 15(1)(4), Mumbai

Accordingly, the issue is restored to the file of the Ld. AO for limited factual verification and fresh adjudication in the aforesaid terms. The ground raised by the assessee is accordingly allowed...

ITA 6271/MUM/2025[2010-11]Status: DisposedITAT Mumbai19 Aug 2026AY 2010-11

Bench: Shri Narender Kumar Choudhry, Jm & Shri Arun Khodpia, Am

For Appellant: Shri Devendra JainFor Respondent: Assessee by
Section 133(6)Section 143(3)Section 147Section 69C

Paresh Vanitlal Shah, Mumbai vs. ITO Ward 29(2)(5), Mumbai

Accordingly, the issue is restored to the file of the Ld. AO for limited factual verification and fresh adjudication in the aforesaid terms. The ground raised by the assessee is accordingly allowed...

ITA 6270/MUM/2025[2010-11]Status: DisposedITAT Mumbai19 Aug 2026AY 2010-11

Bench: Shri Narender Kumar Choudhry, Jm & Shri Arun Khodpia, Am

For Appellant: Shri Devendra JainFor Respondent: Assessee by
Section 133(6)Section 143(3)Section 147Section 69C

Paresh Vanitlal Shah, Mumbai vs. Assistant Commissioner of Income Tax 15(1), Mumbai

Accordingly, the issue is restored to the file of the Ld. AO for limited factual verification and fresh adjudication in the aforesaid terms. The ground raised by the assessee is accordingly allowed...

ITA 4696/MUM/2025[2011-12]Status: DisposedITAT Mumbai19 Aug 2026AY 2011-12

Bench: Shri Narender Kumar Choudhry, Jm & Shri Arun Khodpia, Am

For Appellant: Shri Devendra JainFor Respondent: Assessee by
Section 133(6)Section 143(3)Section 147Section 69C

Asstt Commissioner of Income Tax, Ranchi vs. Sri Sanjay Kumar Jain, Ranchi

In the result, the appeal of the revenue is dismissed

ITA 381/RAN/2025[2015-16]Status: DisposedITAT Ranchi30 Jun 2026AY 2015-16

Bench: Shri George Mathan & Shri Ratnesh Nandan Sahayassessment Year: 2015-16 Acit, Ranchi Sri Sanjay Kumar Jain Vs 5A Main Road Ranchi, Ranchi, Jharkhand-834001. (Pan: Abqpj9977Q) (Appellant) (Respondent)

For Appellant: Shri Ajay Poddar, AdvocateFor Respondent: Shri Huidrom Robindro Singh, CIT-DR
Section 194Section 194CSection 194C(6)Section 194C(7)Section 40Section 6Section 7

Shreejit Propack Pvt.Ltd., Haridwar vs. The Income Tax Officer (TDS), Haridwar

ITA 6265/DDN/2016[2014-15]Status: DisposedITAT Dehradun27 May 2026AY 2014-15

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwal

Section 194CSection 194C(6)Section 194C(7)Section 201(1)Section 40

Shreejit Propack Pvt.Ltd., Haridewar vs. The Income Tax Officer (TDS), Haridwar

ITA 6264/DDN/2016[2013-2014]Status: DisposedITAT Dehradun27 May 2026AY 2013-2014

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwal

Section 194CSection 194C(6)Section 194C(7)Section 201(1)Section 40

Shreejit Propack Pvt.Ltd., Haridwar vs. The Income Tax Officer (TDS), Haridwar

ITA 6263/DDN/2016[2012-2013]Status: DisposedITAT Dehradun27 May 2026AY 2012-2013

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwal

Section 194CSection 194C(6)Section 194C(7)Section 201(1)Section 40

Deputy Commissioner of Income Tax, Circle 3(1)(1), Bengaluru vs. Nutricraft India Private Limited, Bengaluru

In the result appeal filed by the learned assessing officer is partly allowed for statistical purposes

ITA 298/BANG/2024[2017-18]Status: DisposedITAT Bangalore16 Dec 2025AY 2017-18

Bench: Shri Prashant Maharishi & Shri Soundararajan K.Assessment Year : 2017-18

For Appellant: Shri Muthu Shankar, CIT(DR)(ITAT), BengaluruFor Respondent: Smt. Suman Lunkar, CA
Section 143(3)Section 148ASection 153CSection 194C(6)Section 194C(7)Section 36(1)(ii)Section 40

M/S. Royal Impex, Chennai vs. DCIT, Central Circle-2(4), Chennai

In the result we find that there is no substantial question of law arising for consideration, accordingly, the appeal filed by the Revenue fails and the same is dismissed

ITA 452/CHNY/2025[2020-21]Status: DisposedITAT Chennai25 Aug 2025AY 2020-21

Bench: Shri George George K & Shri S.R.Raghunathaआयकर अपील सं./Ita No.:452/Chny/2025 धनिाजरण वर्ज / Assessment Year: 2020-21 Royal Impex, Dcit, New No. 77, Old No. 38, Vs. Central Circle – 2(4), Acharappan Street, Parrys, Chennai – 600 034. Chennai – 600 001. Tamil Nadu. [Pan:Aaxfr-0248-N] (अपीलाथी/Appellant) (प्रत्यथी/Respondent) अपीलाथी की ओर से/Appellant By : Shri. Jai V.Vairav, Ca. प्रत्यथी की ओर से/Respondent By : Ms. Sita Krishnamoorthy, Jcit.

For Appellant: Shri. Jai V.Vairav, CAFor Respondent: Ms. Sita Krishnamoorthy, JCIT
Section 194C(6)Section 194C(7)Section 37Section 40

Vardhman Polytex Limited, Ludhiana vs. DCIT(TDS), Ludhiana

In the result, appeal of the Assessee is allowed

ITA 1090/CHANDI/2024[2015-16]Status: DisposedITAT Chandigarh08 Jul 2025AY 2015-16

Bench: The Ld. Cit(A), Nfac, Delhi. Though Notices Were Issued Electronically Through The E-Filing Portal, The Assessee Contended That Such Notices Were Neither Brought To Their Knowledge Nor Received Through Any Alternative Means Such As Email Or Physical Intimation. Consequently, The Appeal Was Dismissed Ex Parte. It Was Further Submitted That The Issue Involved In The Present Appeal Is Legal In Nature & Does Not Require Examination Of Disputed Facts; Hence, The Matter May Be Adjudicated On Merits Without The Necessity Of A Remand To The Lower Authorities.

For Appellant: Shri Ashish Aggarwal, C.A (Virtual)For Respondent: Dr. Ranjit Kaur, Addl. CIT, Sr. DR
Section 194CSection 194C(6)Section 201Section 201(1)Section 250Section 44A

Assistant Commissioner of Income Tax, Bhubaneswar vs. Krupasindhu Gahan, Talcher Town

In the result, appeal of the revenue stands dismissed

ITA 441/CTK/2024[2016-17]Status: DisposedITAT Cuttack08 Apr 2025AY 2016-17

Bench: Shri George Mathan & Shri Rajesh Kumarआयकर अपील सं/Ita No.441/Ctk/2024 (नििाारण वर्ा / Assessment Year : 2016-2017) Dcit, Central Circle-1, Vs Krupasindhu Gahan, Bhubaneswar Angarua Near Lic Office, Talcher Town, Talcher-759107 Pan No. :Agkpg 8590 M (अपीलार्थी /Appellant) (प्रत्यर्थी / Respondent) .. नििााररती की ओर से /Assessee By : Shri K.K.Bajoria, Fca राजस्व की ओर से /Revenue By : Shri Sanjay Kumar, Cit-Dr सुनवाई की तारीख / Date Of Hearing : 08/04/2025 घोषणा की तारीख/Date Of Pronouncement : 08/04/2025 आदेश / O R D E R Per Bench : This Is An Appeal Filed By The Revenue Against The Order Of The Ld. Cit(A), National Faceless Appeal Centre (Nfac), Delhi, Dated 30.08.2024, Passed In Itba/Apl/S/250/2024-25/1068162509(1) For The Assessment Year 2016-2017. 2. Shri K.K.Bajoria, Fca Appeared On Behalf Of The Assessee. Shri Sanjay Kumar, Ld Cit Dr Represented On Behalf Of The Revenue. 3. It Was Submitted By Ld Cit Dr That The Assessee Is A Transport Contractor. It Was The Submission That The Assessee Had Collected The Requisite Details From The Vehicle Operators As Required U/S.194C(6) Of The Act. It Was The Submission That The Assessing Officer Disallowed The Transport Payments On The Ground That The Assessee Had Not Produced The Said Forms Before The Concerned Authorities In The Time Prescribed

For Appellant: Shri K.K.Bajoria, FCAFor Respondent: Shri Sanjay Kumar, CIT-DR
Section 194Section 194C(6)Section 194C(7)Section 40

Murugan Oil Corporation, Salem vs. DCIT Circle 1(1), Salem

In the result the appeal of the assessee is allowed

ITA 1501/CHNY/2024[2017-18]Status: DisposedITAT Chennai17 Feb 2025AY 2017-18

Bench: Shri S.S. Viswanethra Ravi, Hon’Ble & Shri S. R. Raghunatha, Hon’Bleआयकरअपीलसं/.Ita No.: 1501/Chny/2024 िनधा"रणवष" / Assessment Year: 2017-18

For Appellant: Mr. T. Vasudevan, AdvocateFor Respondent: Smt. Samantha Mullamudi
Section 142(1)Section 143(1)Section 143(3)Section 194CSection 194C(6)Section 194C(7)Section 40Section 80I

ITO Ward-1(1) Nagpur, Nagpur vs. Ashwami Sales and Marketing Pvt.Ltd, Nagpur

In the result, appeal filed by the Revenue is dismissed

ITA 294/NAG/2023[2013-14]Status: DisposedITAT Nagpur21 Aug 2024AY 2013-14

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Hitesh P. ShahFor Respondent: Shri Kailash C. Kanojiya
Section 143(1)Section 194(7)Section 194CSection 194C(6)Section 194C(7)Section 40Section 40A(2)(b)

Punam Hisaria, Sitamarhi vs. Dc/Ac, Circle-03, Darbh

In the result, appeal of the assessee is partly allowed for statistical purposes

ITA 80/PAT/2023[2017-18]Status: DisposedITAT Patna09 Jul 2024AY 2017-18

Bench: Shri Rajpal Yadav & Dr. Manish Boradi.T.A. No.80/Pat/2023 Assessment Year: 2017-18 Punam Hisaria ………. Appellant (Pan: Abupa3945R)

Section 143(2)Section 143(3)Section 194Section 194CSection 194C(6)Section 194C(7)Section 250Section 40

Shantilal Juharmalji Jain, Mumbai vs. ITO- Ward 19(3)(1), Mumbai

In the result, the appeal filed by the assessee is allowed

ITA 1311/MUM/2023[2011-2012]Status: DisposedITAT Mumbai28 Aug 2023AY 2011-2012

Bench: Shri Om Prakash Kant, Am & Ms. Kavitha Rajagopal, Jm Shantilal Juharmalji Jain Ito-Ward 19(3)(1) 171-B Panjrapole Lane, Mumbai Vs. Opp. Sarvodaya Nagar, Mumbai-400 004 Pan/Gir No. Aaapj 9199 D (Appellant) : (Respondent)

For Appellant: Shri Rashmi VyasFor Respondent: 06.07.2023
Section 143(1)Section 143(3)Section 194CSection 194C(1)Section 194C(6)Section 194C(7)Section 250Section 40

Principal Commissioner of Income Tax-5, Kokata vs. M/S. L.G.W. Ltd

ITA/35/2020HC Calcutta12 Aug 2022

Bench: : The Hon’Ble Justice T.S. Sivagnanam & The Hon’Ble Justice Hiranmay Bhattacharyya Date : August 12, 2022 Appearance : Ms. Smita Das De, Adv. ….For Appellant Mr. J.P. Khaitan, Sr. Adv. Mr. Ananda Sen, Adv. …For Respondent The Court : This Appeal Filed By The Revenue Under Section 260A Of The Income Tax Act, 1961 (The Act, For Brevity) Is Directed Against The Order Of The Income Tax Appellate Tribunal “C” Bench, Kolkata (Tribunal) Dated 5Th October, 2018 In I.T.A. No.1786/Kol/2016 For The Assessment Year 2012-13. The Revenue Has Raised The Following Substantial Questions Of Law For Consideration: - A) Whether On The Facts & In The Circumstances Of The Case, The Tribunal Has Misinterpreted Section 194C, More Particularly 194C (7) Of The Income Tax Act, 1961 Read With Rule 31A Of The Income

Section 194CSection 194C(6)Section 194C(7)Section 200Section 234Section 260ASection 31Section 31ASection 48Section 6

T.V.Sundaram Iyengar & Sons Ltd., Madurai vs. ACIT Corporate Circle 2, Madurai

In the result, appeals filed by the assessee in ITA Nos

ITA 2761/CHNY/2019[2014-15]Status: DisposedITAT Chennai22 Jun 2022AY 2014-15

Bench: Shri Mahavir Singh, Hon’Ble & Shri Manoj Kumar Aggarwal, Hon’Ble

For Appellant: Mr.N.V.Balaji, AdvFor Respondent: Mr.Varuvooru Sreedhar
Section 10(34)Section 143(3)Section 14A

T.V.Sundaram Iyengar & Sons Ltd., Madurai vs. ACIT Corporate Circle 2, Madurai

In the result, appeals filed by the assessee in ITA Nos

ITA 2760/CHNY/2019[2013-14]Status: DisposedITAT Chennai22 Jun 2022AY 2013-14

Bench: Shri Mahavir Singh, Hon’Ble & Shri Manoj Kumar Aggarwal, Hon’Ble

For Appellant: Mr.N.V.Balaji, AdvFor Respondent: Mr.Varuvooru Sreedhar
Section 10(34)Section 143(3)Section 14A

T.V.Sundaram Iyengar & Sons Ltd., Madurai vs. ACIT Corporate Circle 2, Madurai

In the result, appeals filed by the assessee in ITA Nos

ITA 2759/CHNY/2019[2012-13]Status: DisposedITAT Chennai22 Jun 2022AY 2012-13

Bench: Shri Mahavir Singh, Hon’Ble & Shri Manoj Kumar Aggarwal, Hon’Ble

For Appellant: Mr.N.V.Balaji, AdvFor Respondent: Mr.Varuvooru Sreedhar
Section 10(34)Section 143(3)Section 14A