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2010 (12) TMI 746 - AT - Income TaxDisallowance u/s 40(a)(ia) - TDS u/s 194C - payment made by coaching center to franchise - meaning and scope of the term 'Any work' u/s 194C - Held that:- the term has a wide import and covers any work which one or the other organization specified in the sub-section can get carried out through a contractor under a contract and further it includes obtaining by any of such organisation as supply of labour under a contract with a contractor for carrying out its work which would have fallen outside its scope. While the agreement speaks of payment by the franchisees to the assessee, the accounts have been maintained in a manner where payment it shown by the assessee to the franchisees. However, the mode and manner of keeping accounts is also not of great significance for deciding the issue as the same is to be decided as per law. On the fact, it is clear that it is not a case of any payment made by the assessee to the licensee for the work done. Therefore, the provision contained in section 194-C is not applicable. - Decided in favor of assessee. Disallowance u/s 14A - As the disallowance has been made by invoking the provision, which was not in force for the relevant year, the whole matter has to be considered afresh. Therefore, we think it fit to restore the matter to the file of the AO to decide it in the light of statutory provisions and the cases decided thereunder. Bonus payable to directors - salary or dividend - section 36(1)(ii) - held that:- one of the directors would have received the bonus as dividend in case bonus was not paid. Otherwise, the bonus has been paid as per resolution of the Board of Directors. Therefore, the provision contained in section 36(1)(ii) is not applicable. - Decided in favor of assessee. Interest on borrowed capital - Section 36(1)(iii) - Interest paid to NOIDA authority for purchase of land - Held that:- Expenditure allowed - Decided in favor of assessee. Regarding non-refundable deposit - It was submitted that the assessee is imparting coaching for admission to various professional courses. Some of the courses are spread over to two accounting periods - The treatment is also justified in view of the matching principle of receipt and expenditure - It has also been mentioned that the decision is confined to the facts of the case only and may not be treated as an authority for general application - it is held that only that part of the receipt is taxable in this year which accrued to the assessee as income
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