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2015 (12) TMI 496 - AT - Income TaxAddition representing settlement amount paid by a third party, on behalf of the assessee, considering the same as covered u/s 40a(ia) - Held that:- The payment in question was not in consequence of any work carried out by the contractor for the assessee, but it was agreed payment to get the title of the property cleared, by way of out of court settlement of the suit filed by the contractor. Thus, the assessee was correct in not making TDS on the amount paid by the purchaser, M/s Silverline Enterprises, directly to the contractor, M/s Sarovar Developer, on behalf of the assessee. As such, the provisions of section 40(a)(ia) of the Act do not get attracted. Therefore, the ld. CIT(A) has erred in applying the decisions of “Torque Pharmaceuticals Pvt. Ltd. vs. Addl. CIT”, (2011 (7) TMI 1147 - ITAT CHANDIGARH) and “ACIT vs. Grandprix Fab (P) Ltd.”, [2009 (10) TMI 659 - ITAT DELHI] inasmuch as in the present case, the payment made was not qua any work contract but was made to get a clear title of the property. For the above discussion, the grievance of the assessee is found to be justified and is accepted as such. The addition made by the A.O., as confirmed by the ld. CIT(A), is cancelled. - Decided in favour of assessee.
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