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2015 (9) TMI 225 - AT - Income TaxDisallowance u/s 40(a)(ia) - Non deduction of TDS u/s 194J - tax deducted under wrong provision - CIT(A) deleted disallowance - Held that:- The issue under consideration is squarely covered in favour of assessee by the decision of CIT(A) vs. M/s. S. K. Tekriwal [2012 (12) TMI 873 - CALCUTTA HIGH COURT ] wherein the assessee deducted tax u/s. 194C of the Income Tax Act. According to the Assessing Officer, the tax should have been deducted u/s. 194I. He, therefore, made proportionate disallowance u/s.40(a)(ia). The Tribunal held that where tax has been deducted by assessee, though under the wrong provisions, the provision of Section 40(a)(ia) cannot be invoked and Revenue can initiate proceedings u/s.201 for short fall in deduction of tax at source. - Decided in favour of assessee. Disallowance u/s 43B - whether CIT(A) erred in allowing the claim regarding notified area tax liability paid as per provisions of section 43B without considering the fact that any expense in connection with closed business is not an allowable deduction u/s. 43B - Held that:- The only ground on which the disallowance of the payment of tax was made was the presumption of the Assessing Officer that the business was closed. After the order of CIT(A), there remains no dispute that the business was not closed but such business was leased out by the assessee and the rental income was assessed under the head ‘income from business’. In view of above, we do not find any infirmity in the order of CIT(A) - Decided in favour of assessee. Disallowance of Egypt tour expenses - AO disallowed the expenses mainly on the ground that there was no basis for the provision and the tour was actually conducted in the next year and all the expenditures were actually incurred in next year - Held that:- when the assessee has promised to arrange the tour for its clients, sub commission agents and Engineers on the basis of their performance during the year under consideration, then persons who achieved the target given by the assessee have acquired the right to go on tour as per the Scheme of assessee. Therefore, once the assessee’s clients, commission agents and Engineers fulfill the target given to them, the assessee incurs the liability to take them on tour to Egypt as per the Scheme. Therefore, the provision for Egypt tour is to be allowed in the year under consideration.- Decided in favour of assessee. Responsibility of claim of provision for Egypt tour - Held that:- The assessee made the provision of ₹ 24,88,000/- while the actual payment made by the assessee in the next year was ₹ 41,37,880/-. In the above situation, the provision made by the assessee cannot be said to be unreasonable or excessive. In view of above, we direct the Assessing Officer to allow the deduction for the provision of Egypt tour expenses amounting to ₹ 24,88,000/- - Decided in favour of assessee.
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