The Raipur bench of the Income Tax Appellate Tribunal (ITAT) has held that the provisions relating to tax deduction at source (TDS) is not applicable on the purchase of spare parts.
An order was passed against the assessee-Company with regard to the non-deduction of TDS on payment of Rs.1,47,153/- to Jaika Automobiles, on payment of interest on car loan amounting to Rs.1,18,830/-, etc.
The assessee contended that the major component of cost involved supply of spare parts for repair of car engine for which separate invoice was raised. With regard to the interest paid towards car loan, it was contended that the interest was paid to Bank of India as interest on car loan and not to Magma finance as misunderstood by PCIT. The ledger copy of Bank of India Car loan account was relied upon.
Source Taxscan
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