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2015 (12) TMI 1846 - AT - Income TaxTDS u/s 194J - Disallowing the expenses on account of violation of the provisions of TDS - payment from the party/ organizers for the artistes - assessee submitted that she is acting as a co-ordinator between artists and the organizer for arranging musical programmes - HELD THAT:- The assessee receives the payments from the organizers after TDS and make over the negotiated amount without TDS since the appellant is representing and acting for and on behalf of the organizers. All the artistes are very famous, widely acclaimed and have themselves furnished declaration with PAN that they will be directly responsible for their respective tax matters and one of them, Alka Yagnik even unequivocally stated that she had already paid income tax on such income. DR vehemently relied on the orders of authorities below. We find from the aforesaid discussion that AO disallowed the expenses claimed by assessee due to violation of provision to Sec. 194-J of the Act. The argument of the assessee that the recipient of income has paid the tax in their respective hands has also been regarded. However, we find that there is an amendment in proviso to Sec. 40(a)(ia) r.w.s. 1st proviso to Sec. 201, wherein, if any payee has paid the taxes by offering / disclosing the said receipt in his / her return of income, then the payer (the assessee herein) should not be treated as assessee in default and no disallowance u/s/. 40(a)(ia) of the Act could operate in that scenario. As relying on Ansal Land mark Township (P) Ltd. [2015 (9) TMI 79 - DELHI HIGH COURT] we deem it fit and appropriate in the interest of justice and fair play to set aside this issue to the file of Assessing Officer to decide the issue afresh in the light of the aforesaid judgment to ensure whether the deductee has paid taxes on their income. Accordingly, we direct the Assessing Officer to verify whether the payees have included the subject mentioned receipts in their respective returns and paid taxes thereon or not. If that is so, then disallowance u/s. 40(a)(ia) of the Act shall not be made in the hands of the assessee. Accordingly, the ground raised by assessee is allowed for statistical purposes.
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