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2023 (1) TMI 778 - HC - Income TaxTDS obligation on year end provision - disallowance of the provision for legal and professional charges - identity of payee was not certain as the actual recipient of professional charges was not identified at the stage when the provision was made - HELD THAT:- It is not in dispute that the provisions made at the end of the accounting year were reversed in the beginning of the next year and no payees were identified nor the exact amount payable. In Karnataka Power Transmission Corporation Ltd. [2016 (2) TMI 412 - KARNATAKA HIGH COURT] relied upon by the assessee, this Court has held that if no income is attributable to the payee there is no liability to deduct tax at source in the hands of the tax deductor. After quoting a passage from Kedarnath Jute Mfg. Co. Ltd. [1971 (8) TMI 10 - SUPREME COURT] this Court has held that the existence or absence of entries in the books of accounts is not decisive or conclusive factor in deciding the right of the assessee claiming deduction. So far as the authority in Palam Gas Service [2017 (5) TMI 242 - SUPREME COURT] it is relevant to note that the payees were identified in that case as recorded in para 5 of that judgment. In contradistinction, in the case on hand the payees were not identified. Therefore, the said authority does not lend any support in the contentions urged on behalf of the Revenue. In view of the law laid down in Karnataka Power Transmission Corporation Ltd. & Volvo India Pvt. Ltd. [2016 (2) TMI 412 - KARNATAKA HIGH COURT] we are of the considered opinion that the ITAT’s order reversing DRP’s Order and issuing further direction to AO is perverse - Decided in favour of assessee.
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