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2014 (5) TMI 268 - AT - Income TaxDisallowance u/s 40(a)(ia) of the Act Reimbursement expenses paid to clearing and forwarding agent TDS not deducted Held that:- Following CIT vs Gujarat Narmada Valley Fertilizers [2014 (4) TMI 235 - GUJARAT HIGH COURT] no part of amount reimbursed was to be disallowed u/s. 40(a)(ia) if tax has not been deducted - expenses were incurred by agent on behalf of assessee-principal for transportation and other charges, which had been spelt out in bill itself - So far as obligation to deduct tax at source form payment of transport charges and other charges was concerned, same was complied with by agent, who had made payment on its behalf Decided in favour of Assessee. Disallowance of expenses u/s 14A r.w. Rule 8D of the Act Exempted dividend - Held that:- The asssessee himself had admitted there was an expense of Rs. 98,404/- towards demat charges in respect of this exempt income - The assessee did not attribute any administrative or managerial expenses towards earning of this dividend income - Investments decisions are taken by the top management of the company, therefore some part of administrative and managerial expenses can be held as attributable to earn the exempt income from such investments - thus, the disallowance u/s. 14A is restricted to Rs. 3 lacs Decided partly in favour of Assessee. Disallowance u/s 40(a)(ia) of the Act Lower rate of TDS deducted as prescribed u/s 194J of the Act Held that:- Following APOLLO TYRES LTD Versus DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1(1), ERNAKULAM [2013 (11) TMI 209 - ITAT COCHIN] - if any part of the tax which required to be deducted was found to be not deducted then can be levied in respect of that part of the amount which was not deducted - the language of section 40(a)(ia) does not say that even for short deduction disallowance has to be made proportionately - section 40(a)(ia) does not enable the assessing officer to disallow any proportionate amount for short deduction or lesser deduction thus, the order of the CIT(A) deleting the addition is upheld Decided against Revenue. Disallowance u/s 40(a)(ia) of the Act Payment made for machinery hiring charges TDS not deducted Held that:- CIT(A) has deleted the disallowance on the ground that machinery/plant and equipment were covered in definition of rent for the purpose of section 194I only w.e.f. 13-07-2006, therefore before this date assessee was not liable to deduct tax at source u/s.194I from machinery hire charges and disallowance made by AO u/s. 40(a)(ia) on this count was not sustainable there was no infirmity in the finding of CIT(A) Decided against Revenue.
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