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2014 (1) TMI 698 - AT - Income TaxDisallowance u/s 40(a)(ia) of the Act – Payments made to SIDBI towards reimbursement of depute personnel cost - Default in Not deducting TDS u/s 192 of the Act - Held that:- The deputed employees are employed by the SIDBI who paid the salaries as per the terms and conditions after making necessary TDS in accordance with the law in force - The agreement (MoU) between the assessee and the SIDBI allows deputing of the personnel to the assessee for which assessee is under obligation to reimburse the personnel cost - The amount constitutes such personnel costs reimbursed by the assessee - That being the fact of the addition, the question of applicability of section 40(a)(ia) to such payments by way reimbursements do not attract the TDS provisions to the amount – Following CIT vs. OCB Engineers [2013 (6) TMI 48 - BOMBAY HIGH COURT] – Thus, the CIT (A) has wrongly decided the issue without appreciating the facts of the case and the law in force – Decided partly in favour of Assessee. Deletion of disallowance u/s 40(a)(ia) of the Act – Late payment of TDS to Government account – Held that:- The appellant explained that the TDS amount in respect of expenses have been paid before the due date of filing of return of income - the deduction is allowable where TDS has been paid / deposited before the due date of filing of the return of income - the entire tax deducted at source from the payments made during the period 1.4.2007 to 28.2.2008 was paid by the appellant in Government account till the month of July, 2008 ie well before the due date of filing of income tax return for the year under consideration - The appellant further explained that section 40(a)(ia) of the Act have been amended by Finance Act, 2010 - The TDS made by the assessee was deposited to the Government account before the due date for filing of the return of income - There is no dispute on this fact - the CIT (A) has rightly and reasonably adjudicated the issues and there is no infirmity in the order of the CIT (A) – Decided against Revenue.
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