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2016 (4) TMI 516 - AT - Income TaxTDS u/s 194H - disallowance under section 40(a)(ia) - non-deduction of TDS on payments made to distributors as discount on sale of pre-paid recharge vouchers - Held that:- Once in assessee’s own case, it has been categorically held that, assessee was not liable to deduct TDS on such a trade discount given by the assessee to the Distributors then it cannot be reckoned as a “commission”, and consequentially disallowance under section 40(a)(ia) does not has any legs to stand. There could not be a situation where on one hand, a finding has attained finality that assessee was not liable to deduct TDS on trade discount given by the assessee and cannot be treated as commission payment to the distributors; and on the other hand, a disallowance of expenditure under section 40(a)(ia) is being made on the same amount by holding that that assessee should have deducted TDS. Thus, we do not find any infirmity in the order of the CIT(A) in deleting the said disallowance - Decided in favour of assessee Disallowance u/s 14A - Held that:- Once the assessee has not earned any exempt income then in view of the ratio laid down by the Hon’ble Delhi High Court in the case of Cheminvest Ltd. (2015 (9) TMI 238 - DELHI HIGH COURT ), no disallowance under section 14A can be made. The Hon’ble Delhi High Court after taking the note of Hon’ble Supreme Court in the case of CIT vs Rajendra Prasad Mody, reported in [1978 (10) TMI 133 - SUPREME Court] held that if no exempt income has been earned during the year, then no disallowance can be made under section 14A.- Decided in favour of assessee
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