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2014 (2) TMI 273 - AT - Income TaxDisallowance of deduction for fees paid to master card – Non deduction of TDS - Held that:- As decided in assessee's own case for ealier years, the deduction can be allowed, only in the year in which the tax has been paid or deducted under Chapter XVII-B - in the assessment year no tax has been deducted while remitting these amounts to companies situated outside India, the first appellate authority was right in upholding the disallowance made by the assessing officer - in the absence of any evidence on record that payee has paid the taxes on the amount paid by the assessee as fee to Master Card – there was no reason to interfere with the order of CIT(A) – Decided against Assessee. Disallowance of Franchise Tax and Pre factural Municipal Inhabitant tax – Held that:- The CIT(A) has already given the direction to the AO to verify the claim and allow the claim on the basis of actual payment in respect of taxes paid relating to assessee’s New York and Tokyo Branch - the sssessee should have no grievance against the order of CIT(A) as CIT(A) has directed the AO to allow claim of the assessee on the basis of actual payment in respect of taxes paid relating to assessee’s New York and Tokyo Branch after verification – Decided against Assessee. Disallowance u/s 14A of the Act – Income as Expenses – Held that:- The disallowance made by the AO by following 12% of the income as expenses is not justified and is not based on any rational basis - the disallowance of 0.5% of tax free income would be reasonable - The order of the CIT(A) set aside on the issue and the matter remitted back to the AO for fresh adjudication – Decided in favour of Assessee.
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