Allowability of Testing Charges - TDS not deducted

This query is : Resolved

vijay g. nalawade (Querist)
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07 August 2009 One Co. has paid Testing Charges (Expenses) of Rs. 72,000/- without deducting Income Tax TDS.

Whether these expenses are disallowable u/s 40 of Income Tax Act 1961 ?

Hitesh Jain

Hitesh Jain (Expert)
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07 August 2009 its depends what kind of payment is this, if it is an expanse for which contract is required TDS should be deducted otherwise not.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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08 August 2009 Testing Charges means Technical Services.
hence, Section 194J is also attracted in this case. Expenses may be allowed in the next Asst year provided TDS amount is deposited on the above. Adjust the TDS amt with the Testing Unit and issue a TDS certificate.

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Shyam Lal Naik

Shyam Lal Naik (Expert)
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08 August 2009 TDS is attracted. Non deduction of TDS will attract the disallowance provision.

You may examine whether Sec 194C or 194J is attracted.

194J is attrcted only when the payment is in the nature of fee. If the consideration is in the nature of carrying out any work, 194 C is attracted.