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2016 (6) TMI 331 - AT - Income TaxNon-deduction of tax at source on sub-contract payments - applicability of proviso to section 40(a)(ia) - Held that:- The assessee has furnished on record the complete particulars in this regard which established the case of assessee. The return of income filed by Mr. Anil Patil relates to assessment year 2012-13 and in the totality of the above said facts and circumstances, where the amount of sub-contract payments made by the assessee though without tax deduction at source, has been included by the recipient in his return of income and the said recipient had paid taxes on the income relatable to such receipts, then there is no merit in holding the assessee to be in default for not deducting tax at source. Accordingly, we hold so. Once the assessee is not in default by non deduction of tax at source, then the said payment on account of sub-contract amounting to ₹ 1.52 crores is to be allowed as deduction in the hands of assessee. We direct the Assessing Officer to allow the claim of assessee after verifying the claim of assessee that the payer has included the sub-contract payments as part of its receipts. The grounds of appeal raised by the assessee are thus, allowed as directed. - Decided in favour of assessee.
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