Tds on some expenses, charges capitalised to fixed asset

in my opinion if bill is separate of consulting charges then deduct the TDS 194J and take machinery in fixed assets and consulting charges in expenses

Sec 194 expln(c) where any sum referred to in sub-section (1) is credited to any account, whether called "suspense account" or by any other name, in the books of account of the person liable to pay such sum, such crediting shall be deemed to be credit of such sum to the account of the payee and the provisions of this section shall apply accordingly.

Referring this expenses though capitalised, TDS required to be deducted

Here we have to analyse situation in two ways. If you paid Consulting charges to the same party who sold such Fixed asset (as a Part of sale contract) then no need to deduct T.D.S either u/s.194J or 194C as it amounts to Purchase of Fixed asset. No T.D.S on consideration paid for either Purchase of Goods or Fixed assets. If it is a seperate contract, then as "Roopali Kadam" said T.D.S liability u/s.194J will arises. Whether it is Seperate or Sale Contract and whether you deduct T.D.S or not, you have to capialize Consultancy charges to Fixed assets. But if you failed to deduct T.D.S then Interest for Non deduction and Non Deposit and Penalty for Non-Compliances will consequently arises but no disallowance can be made u/s.40a(i). There is littlebit ambiguity in Sec.40A(3) and 40a(i) w.r.t Purchase of capital assets   

Hello Sir. I had one more dount. On what amount will we calulate Interest. Interest is calculated on 1%/1.5% on TDS deductible amount. And TDS deductible was NIL. So will my Interest be Zero in this case?  

Hi Roopali. Lets assume the cost of Fixed Assets is 100. Consultancy exclusively related to Installation of this asset is 20. For both separate Bills have been raised. My entry will be - 

Fixed Aseets 120

To Vendor a/c     120

(No TDS deducted since capitalised)

See if its a small amount Businesses won't mind deducting TDS. But if the same TDS amount runs into crores of Rupees, it becomes a situation where one needs to be careful as WC might get affected. Are there any Case-Laws related to this?

https://icaiahmedabad.com/Computation-of-Business-Income-CA-K-D-SHAH.pdf

refer pg 9

study those cases referred in that slide

all points in favour of assessee except

"The learned D.R., however, submitted that provisions of Sec.40(a)(i) of the Act were held to apply even to capital expenditure by the ITAT Mumbai in Spaco Carburetors (I) Ltd. Vs. ACIT 2005 (3) SOT 798 (Mum). We find that the said decision was rendered in the context of deduction of capital expenditure while computing income, claimed by an Assessee u/s.35AB of the Act."

from this link

https://www.itatonline.in:8080/itat/upload/740125237680862985413$5%5E1REFNO1497-RS-C-CRESENT-1.pdf