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2013 (6) TMI 127 - CALCUTTA HIGH COURTDisallowance u/s 40(a)(ia) - Non deduction of TDS on amount paid to MGPL, a group company getting the advertisements done from J.J. Communications on behalf of the assessee company - Held that:- These expenses cannot be disallowed to the assessee if MGEPL has deducted and paid TDS on behalf of the assessee without violating the condition of section 40(a)(ia). Since in this case the assessee has proved that amount of Rs.1,20,84,768/- was paid on behalf of the assessee by its agent no infirmity in the order of the CIT( A) in allowing Rs.1,12,84,318/- out of total disallowance of Rs.1,20,84,768/- made by AO. Tribunal has recorded that the assessee had proved that MGEPL was acting as an agent. The question raised by the AO as to why should MGEPL act without any profit motive is answered by section 185 of the Contract Act which provides that No consideration is necessary to create an agency - in favour of assessee.
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