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2020 (11) TMI 648 - AT - Income TaxTDS u/s 195 - additions made u/s 40(a)(ia) - non-deduction of tax at source on payments made to tribals and non-tribals - violation of provisions of section 197(1) - HELD THAT:- Considering the binding decision of Hon'ble Jurisdictional Tribunal on identical issue in KOMORRAH LIMESTONE MINING CO. LEARNED [2019 (6) TMI 1558 - ITAT GAUHATI] disallowances of payment to tribals whose incomes are exempt u/s 10(26) is to be reversed. In respect of payment to non-tribals, assessee claim is that the recipients disclosed the payments in their respective returns of income. But no documentary evidence in this regard was filed. The non-tribals payees have to satisfy the condition laid down in first proviso to sub-section(l) of section 201. Since no evidence in this regard was furnished, the payments to non-tribals have to be disallowed. We decline to interfere with the order of Id. CIT(A) in deleting the aforesaid addition in respect of payments made to individuals who are specified as Schedule Tribes and confirmed the addition in case of payments to Non-Schedule Tribes. His order on this issue is therefore upheld and the grounds of appeal of the Revenue are dismissed. Disallowance on account of non-deduction of tax at source on payments made to non-tribals as sustained by ld CIT(A) - HELD THAT:- If above payees have included the receipts in their books of accounts and have offered for taxes then the disallowance on account of non- deduction of TDS will not arise. That is, if these payees have included the receipts in computation of the total income and return of income then it would be sufficient compliance of TDS provisions and no disallowance should be made under section 40(a)(ia) of the Act. Therefore, we direct the Assessing Officer to examine whether these above noted payees had included the receipts in their books of accounts/computation of total income. If they had included the receipts in the books of accounts/ computation total income, then in that situation, no any disallowance should be made. However, if these payees did not include the receipts in their books of accounts/ computation of total income, then the Assessing Officer may make the disallowance in accordance with law. Therefore, we restore this issue to the file of the Assessing Officer for statistical purposes.
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