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2012 (3) TMI 286 - AT - Income TaxAddition u/s.40(a)(ia) - non Deduction of TDS - 'Reimbursement of manpower cost' - assessee contented that the amounts paid were reimbursement of advances against salaries and was not a sum chargeable to tax u/s.195 - According to the assessee, its agreement to recruit the employees on behalf of the assessee on the condition that the assessee would be reimbursing the payments made to them - Held that :- If the bona fide belief of the payer is that no part of the payment has any portion chargeable to tax, he will not enter into any procedure under s.195. However, if the Department is of the view that the payer ought to have deducted tax at source, it will have recourse under Section 201 of the Act - the assessee could be justified in reaching a bona fide impression that payments effected by it to CMS RDC was not sums on which tax was chargeable in India and was not at default of Chapter XVII-B and therefore, could not have been fastened with the consequences of the nature specified in Sec.40(a)(i) of the Act- appeals of the Revenue stand dismissed.
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