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2019 (5) TMI 616 - AT - Income TaxDisallowance u/s 40(a)(ia) on payment of salary - TDS deducted but not deposited - HELD THAT:- The A.O. in the assessment order noted that as regards Section 192B, the amount on which TDS is to be deducted comes to ₹ 29,01,190/- on which, TDS of ₹ 2,90,119/- have been deducted but was not paid by assessee. Learned Counsel for the Assessee rightly contended that the amount in question relates to payment of salary and according to Section 40(a)(ia), the word “Salary” have not been incorporated in the Act. Therefore, assessee would not be in default of TDS u/s 40(a)(ia) because such provision is not attracted in this Section. Therefore, Section 40(a)(ia) is not application on such transaction. This addition is, therefore, liable to be deleted. We, accordingly, set aside the Orders of the authorities below and delete the addition of ₹ 29,01,190/-. This ground of appeal of assessee is allowed. Disallowance u/s 40(a)(ia) - TDS u/s 194C,194I & 194J - Tax paid by deductees - amendments by the Finance Act, 2014, w.e.f. 01.04.2015 - HELD THAT:- The provision contained in second proviso to Section 40(a)(ia) is not applicable to the case of the assessee because assessee had fully deducted the TDS, but, did not deposit the same into the Government account. However, assessee explained reasonable cause for failure to comply with such provision, on which, CIT(A) admitted the additional evidences. In case the deductees have also paid the taxes on such receipts and offered the amount for taxation, it would certainly amount to double taxation in the hands of the assessee as well as the deductee of the same amount. Further, the assessee has raised this issue for the first time, therefore, it requires reconsideration at the level of assessing officer. Set aside the orders of the authorities below and restore this issue to the file of assessing officer with a direction to verify if the deductees have offered the amount of ₹ 4.92 crores for taxation and paid the taxes thereon. It is clear that assessee has ultimately deposited the TDS amount in question to the account of the Government. According to explanation of assessee, deductees have also paid the taxes on the same income, therefore, as per provisions of Section 40(a)(ia) the benefit of same shall have to be granted to assessee by the assessing officer, in the year, in which, such tax have been deposited. We, accordingly, direct the assessing officer to verify the claim of assessee and allow deduction of the TDS amount paid by assessee subsequently in computation of income of the previous year, in which, such tax has been paid. This Ground is allowed for statistical purposes.
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