AO
made disallowance u/s 40(a)(ia) since he was of the view that the assessee had
not deducted tax u/s 194C while making payments in respect of packing
materials. Hon’ble ITAT found that the concerned payment was in respect of
purchase of plastic trays, cups, spoon and plastic dishes, etc. and the said
items did not carry the logo of the assesse. Further, the said purchases were
of the standardized materials available in the market. It was thus held that
such purchases cannot be considered as being a case of contract which would
require deduction of tax u/s 194C. Consequentially, disallowance u/s 40(a)(ia)
was deleted.
[RASRANJAN
FOOD PRODUCTS PVT. LTD. Vs. ITO – ITA No.1794/Ahd/2010 & CO
No.188/Ahd/2010]
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