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2013 (4) TMI 417 - AT - Income TaxNon Deduction of TDS on payment for professional fees as towards directors salary - Disallowance u/s 40(a)(ia) invoking the provisions of Section 194-J - Held that:- The statute has clarified that the remuneration to director cannot be termed as salary till such time the employee employer relationship exists which was not to be insofar as the Directors on the approval of the share holders cannot be said to be for the professional or technical services to the assessee when the disallowance of payments to them cannot be after invoking the provisions of Chapter XVIIB. The assessee had claimed these payments as expenditure and therefore, it was not the AO to verify the nature of payments to be subjected to the provisions of Chapter XVIIB insofar as the payments authorised to self cannot be termed as payment of salary. Therefore, there was no confusion insofar as the assessee had not deducted tax at source under the provisions of Chapter XVIIB but claimed the payment by whatsoever name called but has been disallowed u/s.40(a)(ia) has to be specifically now considered w.e.f. 1.7.2012 as per the clarification as pointed out by the assessee. Disallowance made u/s.40(a)(ia) for the impugned AY is directed to be deleted - in favour of assessee.
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