No disallowance u/s 40(a)(ia) in respect of payment to truck owners exceeding Rs.50,000/- for non-compliance of S.194C in absence of any contract:

AO made disallowance u/s 40(a)(ia) in respect of payments made to truck owners/parties exceeding Rs.50,000/- in aggregate on or after 01/10/04 without deducting tax at source u/s 194C. Hon’ble ITAT observed that there was no contract for carrying out such work of transportation between assessee and such truck owners/parties pursuant to which such payments were made. Even Revenue had not brought any cogent materials to establish that such payments were made pursuant to any such contract. Accordingly, revenue had not established that provisions of S.194C were applicable in assessee’s case. Hence, it was held that S.194C was not applicable in the given case and consequently, no disallowance is called for u/s 40(a)(ia).

[ACIT Vs. SHREE DHAIN AUTO TRANSPORT CORPORATION – ITA Nos.1 to 4/Ahd/2013]