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2014 (2) TMI 1153 - AT - Income TaxDisallowance u/s 40 - whether the learned Commissioner of Income-tax (Appeals) was justified in deleting the disallowance made under section 40(a)(ia) of the Act for non- deduction of tax at source under section 194J of the Act on the hospital charges paid by it, by disregarding Circular No. 8 of 2009 dated November 24, 2009 issued by the Central Board of Direct Taxes - Held that:- As per assessee's own previous case assessee is only facilitating the payments by insurer to the insured for availing of the medical facilities. The assessee has not rendered any professional services to the insurer or insured and only collecting the amount from the insurer and passing it on to various hospitals who were providing medical services to the insured. Since, there is no claim of expenditure by the assessee, disallowance under section 40(a)(ia) as was done by the Assessing Officer does not arise. It may be different issue that the amounts paid may be covered by the provisions of section 194J as was held by the hon'ble Karnataka High Court in the case of Medi Assist India TPA P. Ltd. v. Deputy CIT Bangalore (2009 (8) TMI 85 - HIGH COURT OF KARNATAKA), relied upon by the Assessing Officer. In that case, the provisions of section 201 was applicable but certainly disallowance under section 40(a)(ia) does not arise as the assessee is not claiming any such expenditure in its profit and loss account. Moreover, the Revenue accepted the order of the Commissioner of Income-tax (Appeals) in the earlier year - No reason to interfere with the order of the learned Commissioner of Income- tax (Appeals) - Decided against Revenue.
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