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2015 (6) TMI 387 - AT - Income TaxTDS u/s 194H or 194C - nature of payment - outstanding liability at the end - Disallowance u/s 40(1)(ia) - non deduction of taxes on payments made to M/s. Usha Kiron Movies Ltd - Held that:- . If any payment is made towards purchase of articles on which VAT is leviable, then section 194C will not apply for the same. Even if it is assumed that the entire tax is to be taken as a single one and the purchases on which VAT was paid should not be segregated, even then the assessee has paid TDS of ₹ 4,38,590 which is in excess of the required rate u/s 194C on the total value of the contract amounting to ₹ 1,27,66,093. Further the assessee has paid the entire amount of ₹ 38,66,773 before the closure of the year and no part of the same is outstanding as on 31.3.2011. The said amount has been accounted by the payee in its regular books of accounts and considered for computing income for the impugned A.Y. Hence applying the decision of the Special Bench in the case of Merilyn Shipping & Transports vs. Additional CIT (A) (2012 (4) TMI 290 - ITAT VISAKHAPATNAM ), we hold that the disallowance u/s 40(a)(ia) cannot be made in respect of the amount which has also been paid during the year. In view of the above discussion, we delete the disallowance of ₹ 38,66,773 u/s 40(a)(ia) for non deduction of TDS and allow the appeal of the assessee. - Decided against revenue. Disallowance of dividend/interest paid on subscription paid to the subscribers without deducting tax u/s 194H - Held that:- Decided in favour of the assessee by the jurisdictional High Court for the A.Y 2008-09 in assessee’s own case. -Decided against revenue. Proportionate expenses apportioned on the basis of collection were disallowed - Held that:- ue is covered by the decision of the Hyderabad Bench of the ITAT in assessee’s own case for A.Y 2010-11 [2015 (5) TMI 743 - ITAT HYDERABAD] wherein it was held that only the expenditure incurred for collection of subscription of the other group companies should be proportionately disallowed in that year. The CIT (A) disallowed an expenditure of ₹ 2.00 lakhs on the ground that very little expenditure were deployed for collection of subscription from other group companies. Thus collection was done as minor additional work along with regular employment. In this view of the matter, the disallowance of ₹ 2.00 lakhs was confirmed by the Tribunal. Thus no hesitation in accepting the disallowance of ₹ 3.00 lakhs made by the CIT (A) and dismiss the appeal of the Revenue seeking a higher disallowance - Decided against revenue.
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