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The principal questions arising for determination in this appeal are as follows-1.As to whether Section 194C of the Act does not apply to the present case? 2.As to whether disallowance under section 40(a)(ia) of the Act is confined/limited to the amount "payable" and not to the amount "already paid"; and whether the decision of this Court inPalam Gas Servicev.Commissioner of Income-Tax[2017]394 ITR 300requires reconsideration?

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Section 194C of the Income-tax Act, 1961— TDS— Once a particular truck was engaged by assessee on hire charges for carrying out the part of work undertaken by it, the operator/owner of that truck became the sub-contractor and all the requirements of Section 194C came into operation.

Facts: Principal question arising for determination in this appeal as that whether Section 194C does not apply to the present case? and whether disallowance under section 40(a)(ia) is confined/limited to the amount "payable" and not to the amount "already paid".

Held, that AO, CIT(A) and the ITAT have concurrently decided this issue against assessee with reference to the facts of the case, particularly after appreciating the nature of contract of assessee with the consignor company as also the nature of dealing of the assessee, while holding that the truck operators/owners were engaged by the assessee as sub-contractors. The same findings have been endorsed by the High Court in its short order dismissing the appeal of the assessee. Once a particular truck was engaged by the assessee on hire charges for carrying out the part of work undertaken by it (i.e., transportation of the goods of the company), the operator/owner of that truck became the sub-contractor and all the requirements of Section 194C came into operation.The contract of the company, for transportation of its goods, had only been with the assessee and it was the assessee who hired the services of the trucks. The payment made by the assessee to such a truck operator/owner was clearly a payment made to a sub-contractor, thus, provisions of Section 194C were indeed applicable and assessee was under obligation to deduct the tax at source in relation to the payments made by it for hiring the vehicles for the purpose of its business of transportation of goods. Thus, appeal was answered in favour of revenue. - SHREE CHOUDHARY TRANSPORT COMPANY V/s ITO - [2020] 27 ITCD Online 041 (SC)