Short deduction of tax due to application of wrong provision won't lead to disallowance

Dear Professionals,

Income Tax (Short deduction of tax due to application of wrong provision won't lead to disallowance):- The assessee had to deduct tax under section 194-I and that the provisions of section 194-C were not applicable in respect of transactions entered between the assessee and the contractee. In view of the decision of same tribunal in [Apollo Tyres Ltd. v. Dy. CIT (2013) 35 taxmann com 593] short deduction of tax at 2.06% instead of at 10% couldn't be a reason or basis for disallowance under section 40(a)(ia). Accordingly the order of the lower authorities were to be set aside and the disallowance made under section 40(a)(ia) was to be deleted. [ Three Star Granites (P.) Ltd. v. Asstt. CIT (2014) 49 taxmann.com 578 ( Cochin Trib.)]

Hope the information will assist you in your Professional endeavors.

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