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2012 (11) TMI 802 - AT - Income TaxDisallowance of salary u/s 40A(2)(b) - Reimbursements made to two sister concerns, who had deputed their employees for carrying out the work of the assessee – Held that:- As concluded from the facts of the case there is no whisper, much less any material on record, to suggest that the assessee has made payments for any consideration extraneous to the cost of the employees deputed to the assessee. It is quite apparent from the orders of the authorities below that there is no allegation to say that the assessee has paid to sister concerns anything over and above salaries due to the employees who were on assignment to the assessee company. Issue decides in favour of assessee Disallowance of salary for non-deduction of TDS u/s 40(a)(ia) - Held that:- Sec. 40(a)(ia) does not include expenditure on salaries. AO erred in invoking Sec 40(a)(ia) to disallow the impugned payment. Issue decides in favour of assessee Disallowance of interest – Interest expenditure in relation of giving interest free advances – Held that:- The AO has not pointed out to any instance of giving away interest free loan for non-business purpose either to relative or to sister concerns. Therefore, there cannot be any disallowance of interest u/s 36(1)(iii). Issue decides in favour of assessee
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