There are two companies 'X' & 'Y'. Both the companies have formed a JV, called company 'Z' where company 'X' and 'Y' have 26% and 74% equity respectively. As per the JV contract, an employee of company 'X' is deputed to company 'Z' with the condition that salary of that employee shall be paid by company 'X' only and the same will be reimbursed by company 'Z' every month.
Now, while making reimbursement of salary expenses by company 'Z' to 'X', 'Z' is deducting taxes u/s 194C. Is it tenable in law? Is there any other TDS provision, which may attract on this payment made by company 'Z' to 'X'?
CAclubindia
