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2015 (2) TMI 847 - HC - Income TaxLiability to pay TDS on freight charges - disallowance u/s 40(a)(ia) - whether the assessee gets any benefit or his obligation is absolved if the recipient of the said amount has already paid taxes on the amounts received by them in the light of the amendment to the second proviso to section 40a(ia)? - Held that:- Reading of section 40(a)(ia) along with the second proviso and section 201(1) along with the proviso, it would mean that the mandate or requirement on the part of the payer to deduct tax at source is not so strict if they are able to show that the payee or the recipient of the amounts has paid tax in accordance with the provisions of section 201(1) and the proviso. This was not the claim made by the assessee before the Assessing Officer. The claim was on a different stand, initially reflecting the amounts as loan in the account books though shown as freight charges in the returns and later explained that it was not the loan amount but freight charges. It was never the case of the assessee that there was no mandate subsequent to the amendment, to deduct tax as TDS in the light of above provisions. The assessment year in question is 2007-08 and the amendment giving breathing space to payer of amounts is with effect from April 1, 2013. Therefore, the said benefit is not applicable to the assessee. Even otherwise, on factual situation, the very fact that these amounts were claimed as loan initially, till the scrutiny came up for consideration before the assessing authority would only indicate the real intention of the assessee-firm, i.e., not to disclose this amount as freight charges but something else as repayment of loan. Thus Tribunal did not err so far as the assessment year 2007-08 with reference to disallowance under section 40(a)(ia). - Decided against assessee.
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