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2015 (12) TMI 396 - ITAT MUMBAIDisallowance under section 40(a)(ia) - non-deduction of TDS on payments in the nature of purchases Held that:- Disallowance will not be attracted, if the respective payee has paid the required taxes in accordance with law. For verification of the actual position, we restore this issue to the file of the AO to verify whether the payee had paid the due taxes after computation of its income including the payments received from the assessee.- Decided in favour of assessee for statistical purposes. Disallowance of rent u/s.4O(a)(ia) - non-deduction of TDS - Held that:- Section 40(a)(ia) was amended by the Finance Act, 2010 and as per the amended provisions the expenditure has to be allowed if the deposit is made within the due date of filing of return of income. Mumbai Bench of the Tribunal, in the case of "Piyush C. Mehta" [2012 (4) TMI 349 - ITAT MUMBAI] has allowed the claim of the assessee if the deposit has been made before the due date of filing of return of income. We decide this issue accordingly and restore the matter to the file of the Assessing Officer (hereinafter referred to as the AO) to verify whether the TDS was deducted and deposited within the due date of filing of return and if found so, then the AO to allow the claim of the assessee accordingly. - Decided in favour of assessee for statistical purposes. Disallowance of salary paid to Mr. Hardik Kothari, son of the partner of the assessee firm - Held that:- justification has been given regarding payment of commission to Mr. Hardik Kothari and it has been explained that Mr. Hardik Kothari was son of the partner of the firm namely Mr. Viren Kothari that to encourage him for hard work, efficiency and sincerity the firm decided to offer him salary of ₹ 12,500/- and commission on sale of products. It has been explained that he has been looking after production quality and customer relationship. The Ld. A.R. has further invited our attention to the written submissions dated 29.08.11 submitted by the assessee to the Ld. CIT(A) wherein it has been explained that the amount of salary paid to Mr. Hardik Kothari was reasonable. The Ld. A.R. has further explained that the payment of salary was routed through salary account. He has further submitted that the payment of salary to Mr. Hardik Kothari has been allowed in the past. Considering the above submissions of the Ld. A.R., we do not find any justification on the part of lower authorities to disallow the amount of salary paid to Mr. Hardik Kothari, son of the partner. This issue is accordingly decided in favour of the assessee. Disallowance being 1/3rd of the payments made to Mr. Vinit Kothari and towards purchase of software - Held that:- We find that the assessee in his letter dated 31.08.10 has explained to the Commissioner that Mr. Vinit Kothari was doing engineering and that the software was developed by him. It is not disputed that Mr. Vinit Kothari is working for the firm. The Ld. CIT(A) has overlooked the contentions raised by the assessee and has disallowed the claim. It is not disputed that the services were provided by Mr. Vinit Kothari to the firm. It has also been explained that the software developed by him was very important to the business of the assessee firm. Considering the above facts and circumstances, in our view, the disallowance is not justified on this issue also and the same is accordingly ordered to be deleted. - Decided in favour of the assessee. Addition of unsecured loans under section 68 - Held that:- The said amount pertained to the commission of ₹ 1,79,400/- (net of TDS) that was already disallowed by the AO and confirmed by the Ld. CIT(A). He has explained that this amount was in respect of commission paid and not the loan received. Considering the above submissions of the assessee, we feel that the issue requires reexamination at the hands of AO. The AO is directed to examine the contentions of the assessee in this regard and decide the issue afresh in accordance with law.- Decided in favour of assessee for statistical purposes.
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