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)

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 2758/CHNY/2019[2010-11]Status: DisposedITAT Chennai22 Jun 2022AY 2010-11

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

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

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

ITA 2754/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

Shri Mohmed Shakil Mohmed Shafi Mutwalli, Himatnagar vs. Income Tax Officer, Sabarkantha Ward-3., Himatnagar

In the result, the appeal of the assessee is allowed

ITA 238/AHD/2018[2012-13]Status: DisposedITAT Ahmedabad16 Sept 2021AY 2012-13
For Appellant: Shri Sanjay R. Shah, A.RFor Respondent: Shri R.R. Makwana, Sr. D.R
Section 143(3)Section 194CSection 263Section 40

M/S. Jenirich Agro Products P. Ltd., Tuticorin vs. DCIT, Circle -1, Tuticorin

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

ITA 2631/CHNY/2019[2014-15]Status: DisposedITAT Chennai14 Jun 2021AY 2014-15

Bench: Shri Duvvuru Rl Reddy & Shri S. Jayaramanआयकरअपीलसं./Ita No.2631/Chny/2019 "नधा%रणवष%/Assessment Year: 2014-15

For Appellant: Shri S. Bharath, CITFor Respondent: 31.03.2021
Section 143(3)Section 194CSection 194C(6)Section 194C(7)Section 263Section 40

ACIT, Circle, Bharatpur vs. M/S. Jagdambe Stone Company, Bharatpur

In the result, this appeal of the Revenue is dismissed

ITA 1171/JPR/2019[2015-16]Status: DisposedITAT Jaipur12 Mar 2021AY 2015-16

Bench: Shri Sandeep Gosain, Jm & Shri Vikram Singh Yadav, Am

For Appellant: Shri Nitesh Gupta (CA)For Respondent: Smt. Rooni Paul (Addl.CIT-DR) fu/kZkfjrh dh vksj ls@
Section 143(2)Section 194C(6)Section 194C(7)Section 40

Tapan Kumar Dutta, Kolkata vs. ITO, Ward 2(4), Asansol

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

ITA 472/KOL/2020[2011-12]Status: DisposedITAT Kolkata28 Jan 2021AY 2011-12

Bench: Shri P.M. Jagtap, Vice-

Section 194CSection 194C(6)Section 40

Sri. K R Santhosh Kumar, Bangalore vs. Assistant Commissioner of Income Tax, Circle- 3(2)(1), Bangalore

In the result appeal filed by assessee stands allowed

ITA 20/BANG/2020[2013-14]Status: DisposedITAT Bangalore04 Dec 2020AY 2013-14

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year : 2013 – 14

For Appellant: Shri S Ramsubramanian, C.AFor Respondent: Shri Elamurugu, JCIT (DR)
Section 143Section 194CSection 194C(6)Section 194C(7)Section 263Section 40Section 44A

DCIT, Circle - 13(2), Kolkata vs. M/S. Shradha Agencies Private Limited, Howrah

In the result, the appeal of the revenue is dismissed

ITA 1362/KOL/2018[2013-14]Status: DisposedITAT Kolkata12 Jun 2020AY 2013-14

Bench: Shri S.S.Godara, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.1362/Kol/2018 ("नधा"रणवष" / Assessment Year:2013-14)

For Appellant: Shri Dhrubajyoti Roy, JCITFor Respondent: Ankita Manek, ACA
Section 144Section 14ASection 194C(7)Section 36(1)Section 36(1)(va)Section 36(2)Section 40

M/S. Varun Beverages Ltd., Uttar Pradesh vs. ITO (TDS), Noida

In the result, both the appeals are partly allowed for statistical purposes

ITA 4316/DEL/2016[2015-16 (F.Y. 2014-15)]Status: DisposedITAT Delhi05 Mar 2020

Bench: Shri Amit Shukla & Shri Anadee Nath Misshra

For Appellant: Shri Rajat Jain, CA and Shri Akshat Jain, CAFor Respondent: Shri Saras Kumar, Sr. DR
Section 194CSection 194C(7)Section 201(1)Section 7

M/S. Varun Beverages Ltd., Uttar Pradesh vs. ITO (TDS), Noida

In the result, both the appeals are partly allowed for statistical purposes

ITA 4315/DEL/2016[2014-15 (F.Y. 2013-14)]Status: DisposedITAT Delhi05 Mar 2020

Bench: Shri Amit Shukla & Shri Anadee Nath Misshra

For Appellant: Shri Rajat Jain, CA and Shri Akshat Jain, CAFor Respondent: Shri Saras Kumar, Sr. DR
Section 194CSection 194C(7)Section 201(1)Section 7

South India Freight Carriers, Bangalore vs. The Income Tax Officer Ward-3(2)(4), Bangalore

In the result, the appeal of the assessee is allowed

ITA 2586/BANG/2018[2015-16]Status: DisposedITAT Bangalore27 Nov 2019AY 2015-16

Bench: Shri B.R Baskaran & Shri Pavan Kumar Gadaleassessment Years : 2015-16

For Appellant: Shri Sudheendra B.R, AdvocateFor Respondent: Shri Sunil Kumar Agarwal, Addl. CIT
Section 194CSection 194C(6)Section 40Section 44A

Naresh H. Bhansali, Mumbai vs. ITO 15 (1)(3), Mumbai

ITA 3707/MUM/2018[2011-12]Status: DisposedITAT Mumbai21 Aug 2019AY 2011-12

Bench: Sri Mahavir Singh, Jm & Sri Rajesh Kumar, Am Aayakr Apila Sam./ Ita No. 3707/Mum/2018 (Inaqa-Arna Baya- / Assessment Year 2011-12) Naresh H. Bhansali The Income Tax Officer- M/S Multinox Overseas, Ward 15(1)(3) Vs. 24 C.P.Tank Road, Room No. 108, Matru Mandir, Mumbai-400 004 Tardeo, Mumbai-400 007 .. (P`%Yaqaai- / Respondent) (Apilaaqai- / Appellant) स्थायी लेखा िं./Pan No. Ahwpb2936K अपीलाथी की ओर े / Appellant By : None प्रत्यथी की ओर े / Respondent By : Shri Satish Chandra Rajore, Dr ुनवाई की तारीख / Date Of Hearing: 13.08.2019 घोषणा की तारीख / Date Of Pronouncement : 21.08.2019 Aadosa / O R D E R महावीर स ुंह, न्याययक दस्य/ Per Mahavir Singh, Jm: This Appeal Of Assessee Is Arising Out Of The Order Of The Commissioner Of Income Tax (Appeals)-30, Mumbai In Appeal No. Cit(A)- 30/19(2)94)/561/2014-15 Dated 15.03.2018. The Assessment Was Framed By The Income Tax Officer, Ward-15(1)(3) Mumbai (In Short Ito/ Ao) For The A.Y. 2011-12 Vide Dated 29.03.2014, Under Section 143(3) Of The Income-Tax Act, 1961 (Hereinafter ‘The Act’). 2. The Only Issue In This Appeal Of Assessee Is Against The Order Of Cit(A) Confirming The Disallowance Made By Assessing Officer Of Payments Made To Transport Agencies Without Deduction Of Tds & Hence Assessing Officer Invoked The Provisions Of Section 40(A)(Ia) Of The Act. For This Assessee Has Raised The Following Ground: -

For Appellant: NoneFor Respondent: Shri Satish Chandra Rajore, DR
Section 143(3)Section 194CSection 194C(6)Section 194C(7)Section 40

M/S. Saan Global, Noida vs. ITO (TDS), Noida

In the result, the appeals of the assessee are allowed for statistical purpose

ITA 4492/DEL/2016[2015-16 (F.Y. 2014-15)]Status: DisposedITAT Delhi20 Aug 2019

Bench: Sh. Amit Shukladr. B. R. R. Kumarita No. 4487/Del/2016 : Asstt. Year : 2010-11 Ita No. 4488/Del/2016 : Asstt. Year : 2011-12 Ita No. 4489/Del/2016 : Asstt. Year : 2012-13 Ita No. 4490/Del/2016 : Asstt. Year : 2013-14 Ita No. 4491/Del/2016 : Asstt. Year : 2014-15 Ita No. 4492/Del/2016 : Asstt. Year : 2015-16 M/S Saan Global, Vs Income Tax Officer(Tds), C-56/18, Institutional Area, Noida Sector-62, G.B. Nagar, Noida-201301 (Appellant) (Respondent) Pan No. Aahfs7473A Assessee By : Sh. S. Krishnan, Adv. Revenue By : Sh. S. S. Rana, Cit Dr Date Of Hearing: 19.08.2019 Date Of Pronouncement: 20.08.2019 Order Per Bench: The Appeals Are Time Barred By A Period Of 11 Days. It Was Submitted That The Order Of The Ld. Cit(A) Dated 31.05.2016 Has Been Received On 13.06.2016 & Appeals Have Been Filed On 23.08.2016. The Assessee Has Filed Rectification Application U/S 154 Before The Ito For Correction Of The Amount Of Tax Demanded. It Was Submitted That The Assessee Was Under Bonafide Belief That The Appeal To Tribunal Does Not Lie At The Stage & Hence The Delay. We Find That The Delay Is Due To Bonafide Reasons & The Assessee Has Not Derived Or Sought To Ita Nos. 4487 To 4492/Del/2016 2 Saan Global

For Appellant: Sh. S. Krishnan, AdvFor Respondent: Sh. S. S. Rana, CIT DR
Section 154Section 194CSection 194C(6)Section 194C(7)Section 201(1)Section 44ASection 6Section 7

M/S. Saan Global, Noida vs. ITO (TDS), Noida

In the result, the appeals of the assessee are allowed for statistical purpose

ITA 4491/DEL/2016[2014-15 (F.Y. 2013-14)]Status: DisposedITAT Delhi20 Aug 2019

Bench: Sh. Amit Shukladr. B. R. R. Kumarita No. 4487/Del/2016 : Asstt. Year : 2010-11 Ita No. 4488/Del/2016 : Asstt. Year : 2011-12 Ita No. 4489/Del/2016 : Asstt. Year : 2012-13 Ita No. 4490/Del/2016 : Asstt. Year : 2013-14 Ita No. 4491/Del/2016 : Asstt. Year : 2014-15 Ita No. 4492/Del/2016 : Asstt. Year : 2015-16 M/S Saan Global, Vs Income Tax Officer(Tds), C-56/18, Institutional Area, Noida Sector-62, G.B. Nagar, Noida-201301 (Appellant) (Respondent) Pan No. Aahfs7473A Assessee By : Sh. S. Krishnan, Adv. Revenue By : Sh. S. S. Rana, Cit Dr Date Of Hearing: 19.08.2019 Date Of Pronouncement: 20.08.2019 Order Per Bench: The Appeals Are Time Barred By A Period Of 11 Days. It Was Submitted That The Order Of The Ld. Cit(A) Dated 31.05.2016 Has Been Received On 13.06.2016 & Appeals Have Been Filed On 23.08.2016. The Assessee Has Filed Rectification Application U/S 154 Before The Ito For Correction Of The Amount Of Tax Demanded. It Was Submitted That The Assessee Was Under Bonafide Belief That The Appeal To Tribunal Does Not Lie At The Stage & Hence The Delay. We Find That The Delay Is Due To Bonafide Reasons & The Assessee Has Not Derived Or Sought To Ita Nos. 4487 To 4492/Del/2016 2 Saan Global

For Appellant: Sh. S. Krishnan, AdvFor Respondent: Sh. S. S. Rana, CIT DR
Section 154Section 194CSection 194C(6)Section 194C(7)Section 201(1)Section 44ASection 6Section 7

M/S. Saan Global, Noida vs. ITO (TDS), Noida

In the result, the appeals of the assessee are allowed for statistical purpose

ITA 4489/DEL/2016[2012-13 (F.Y. 2011-12)]Status: DisposedITAT Delhi20 Aug 2019

Bench: Sh. Amit Shukladr. B. R. R. Kumarita No. 4487/Del/2016 : Asstt. Year : 2010-11 Ita No. 4488/Del/2016 : Asstt. Year : 2011-12 Ita No. 4489/Del/2016 : Asstt. Year : 2012-13 Ita No. 4490/Del/2016 : Asstt. Year : 2013-14 Ita No. 4491/Del/2016 : Asstt. Year : 2014-15 Ita No. 4492/Del/2016 : Asstt. Year : 2015-16 M/S Saan Global, Vs Income Tax Officer(Tds), C-56/18, Institutional Area, Noida Sector-62, G.B. Nagar, Noida-201301 (Appellant) (Respondent) Pan No. Aahfs7473A Assessee By : Sh. S. Krishnan, Adv. Revenue By : Sh. S. S. Rana, Cit Dr Date Of Hearing: 19.08.2019 Date Of Pronouncement: 20.08.2019 Order Per Bench: The Appeals Are Time Barred By A Period Of 11 Days. It Was Submitted That The Order Of The Ld. Cit(A) Dated 31.05.2016 Has Been Received On 13.06.2016 & Appeals Have Been Filed On 23.08.2016. The Assessee Has Filed Rectification Application U/S 154 Before The Ito For Correction Of The Amount Of Tax Demanded. It Was Submitted That The Assessee Was Under Bonafide Belief That The Appeal To Tribunal Does Not Lie At The Stage & Hence The Delay. We Find That The Delay Is Due To Bonafide Reasons & The Assessee Has Not Derived Or Sought To Ita Nos. 4487 To 4492/Del/2016 2 Saan Global

For Appellant: Sh. S. Krishnan, AdvFor Respondent: Sh. S. S. Rana, CIT DR
Section 154Section 194CSection 194C(6)Section 194C(7)Section 201(1)Section 44ASection 6Section 7

M/S. Saan Global, Noida vs. ITO (TDS), Noida

In the result, the appeals of the assessee are allowed for statistical purpose

ITA 4488/DEL/2016[2011-12 (F.Y. 2010-11)]Status: DisposedITAT Delhi20 Aug 2019

Bench: Sh. Amit Shukladr. B. R. R. Kumarita No. 4487/Del/2016 : Asstt. Year : 2010-11 Ita No. 4488/Del/2016 : Asstt. Year : 2011-12 Ita No. 4489/Del/2016 : Asstt. Year : 2012-13 Ita No. 4490/Del/2016 : Asstt. Year : 2013-14 Ita No. 4491/Del/2016 : Asstt. Year : 2014-15 Ita No. 4492/Del/2016 : Asstt. Year : 2015-16 M/S Saan Global, Vs Income Tax Officer(Tds), C-56/18, Institutional Area, Noida Sector-62, G.B. Nagar, Noida-201301 (Appellant) (Respondent) Pan No. Aahfs7473A Assessee By : Sh. S. Krishnan, Adv. Revenue By : Sh. S. S. Rana, Cit Dr Date Of Hearing: 19.08.2019 Date Of Pronouncement: 20.08.2019 Order Per Bench: The Appeals Are Time Barred By A Period Of 11 Days. It Was Submitted That The Order Of The Ld. Cit(A) Dated 31.05.2016 Has Been Received On 13.06.2016 & Appeals Have Been Filed On 23.08.2016. The Assessee Has Filed Rectification Application U/S 154 Before The Ito For Correction Of The Amount Of Tax Demanded. It Was Submitted That The Assessee Was Under Bonafide Belief That The Appeal To Tribunal Does Not Lie At The Stage & Hence The Delay. We Find That The Delay Is Due To Bonafide Reasons & The Assessee Has Not Derived Or Sought To Ita Nos. 4487 To 4492/Del/2016 2 Saan Global

For Appellant: Sh. S. Krishnan, AdvFor Respondent: Sh. S. S. Rana, CIT DR
Section 154Section 194CSection 194C(6)Section 194C(7)Section 201(1)Section 44ASection 6Section 7

M/S. Saan Global, Noida vs. ITO (TDS), Noida

In the result, the appeals of the assessee are allowed for statistical purpose

ITA 4490/DEL/2016[2013-14 (F.Y.- 2012-13)]Status: DisposedITAT Delhi20 Aug 2019

Bench: Sh. Amit Shukladr. B. R. R. Kumarita No. 4487/Del/2016 : Asstt. Year : 2010-11 Ita No. 4488/Del/2016 : Asstt. Year : 2011-12 Ita No. 4489/Del/2016 : Asstt. Year : 2012-13 Ita No. 4490/Del/2016 : Asstt. Year : 2013-14 Ita No. 4491/Del/2016 : Asstt. Year : 2014-15 Ita No. 4492/Del/2016 : Asstt. Year : 2015-16 M/S Saan Global, Vs Income Tax Officer(Tds), C-56/18, Institutional Area, Noida Sector-62, G.B. Nagar, Noida-201301 (Appellant) (Respondent) Pan No. Aahfs7473A Assessee By : Sh. S. Krishnan, Adv. Revenue By : Sh. S. S. Rana, Cit Dr Date Of Hearing: 19.08.2019 Date Of Pronouncement: 20.08.2019 Order Per Bench: The Appeals Are Time Barred By A Period Of 11 Days. It Was Submitted That The Order Of The Ld. Cit(A) Dated 31.05.2016 Has Been Received On 13.06.2016 & Appeals Have Been Filed On 23.08.2016. The Assessee Has Filed Rectification Application U/S 154 Before The Ito For Correction Of The Amount Of Tax Demanded. It Was Submitted That The Assessee Was Under Bonafide Belief That The Appeal To Tribunal Does Not Lie At The Stage & Hence The Delay. We Find That The Delay Is Due To Bonafide Reasons & The Assessee Has Not Derived Or Sought To Ita Nos. 4487 To 4492/Del/2016 2 Saan Global

For Appellant: Sh. S. Krishnan, AdvFor Respondent: Sh. S. S. Rana, CIT DR
Section 154Section 194CSection 194C(6)Section 194C(7)Section 201(1)Section 44ASection 6Section 7

M/S. Saan Global, Noida vs. ITO (TDS), Noida

In the result, the appeals of the assessee are allowed for statistical purpose

ITA 4487/DEL/2016[2010-11 (F.Y. 2009-10)]Status: DisposedITAT Delhi20 Aug 2019

Bench: Sh. Amit Shukladr. B. R. R. Kumarita No. 4487/Del/2016 : Asstt. Year : 2010-11 Ita No. 4488/Del/2016 : Asstt. Year : 2011-12 Ita No. 4489/Del/2016 : Asstt. Year : 2012-13 Ita No. 4490/Del/2016 : Asstt. Year : 2013-14 Ita No. 4491/Del/2016 : Asstt. Year : 2014-15 Ita No. 4492/Del/2016 : Asstt. Year : 2015-16 M/S Saan Global, Vs Income Tax Officer(Tds), C-56/18, Institutional Area, Noida Sector-62, G.B. Nagar, Noida-201301 (Appellant) (Respondent) Pan No. Aahfs7473A Assessee By : Sh. S. Krishnan, Adv. Revenue By : Sh. S. S. Rana, Cit Dr Date Of Hearing: 19.08.2019 Date Of Pronouncement: 20.08.2019 Order Per Bench: The Appeals Are Time Barred By A Period Of 11 Days. It Was Submitted That The Order Of The Ld. Cit(A) Dated 31.05.2016 Has Been Received On 13.06.2016 & Appeals Have Been Filed On 23.08.2016. The Assessee Has Filed Rectification Application U/S 154 Before The Ito For Correction Of The Amount Of Tax Demanded. It Was Submitted That The Assessee Was Under Bonafide Belief That The Appeal To Tribunal Does Not Lie At The Stage & Hence The Delay. We Find That The Delay Is Due To Bonafide Reasons & The Assessee Has Not Derived Or Sought To Ita Nos. 4487 To 4492/Del/2016 2 Saan Global

For Appellant: Sh. S. Krishnan, AdvFor Respondent: Sh. S. S. Rana, CIT DR
Section 154Section 194CSection 194C(6)Section 194C(7)Section 201(1)Section 44ASection 6Section 7

ITO, Ward-2(2), Burdwan vs. M/S. Nur Egg Centre, Burdwan

In the result, appeal of the revenue is dismissed

ITA 1873/KOL/2017[2014-15]Status: DisposedITAT Kolkata10 May 2019AY 2014-15

Bench: Sri J. Sudhakar Reddy & Sri S.S. Viswanethra Ravi] I.T.A. No. 1873/Kol/2017 Assessment Year: 2014-15 Income Tax Officer, Ward -2(2), Burdwan….......................................................…..…......Appellant M/S. Nur Egg Centre……………………………………………......……………………………………Respondent 142, Spandan Complex G.T. Road Burdwan - 713101 [Pan : Aacfn 4999 F]

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

Rakshit Chemicals, Hooghly vs. ITO, Ward - 47(2), Kolkata

Appeal is partly allowed in above terms

ITA 632/KOL/2018[2011-12]Status: DisposedITAT Kolkata08 May 2019AY 2011-12

Bench: Shri S.S, Godaraassessment Year:2011-12

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