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2023 (2) TMI 406 - AT - Income TaxDisallowance u/s 40 (a) (ia) - TDS on reimubusement of expenses - payment of car hire charges which is reimbursed to the directors of the company - HELD THAT:- Assessee has submitted that it is a reimbursement of expenditure to the director of the company who is undergoing frequent travel. These payments have been made by the director of the company to various taxi owners. The instances of four persons are mentioned wherein the payment made by the director to those persons - As the above payment is in the nature of reimbursement and paid to Mr. Pankaj Dalal, we find that no tax is required to be deducted at source on amount reimbursement to Mr. Pankaj Dalal. The addition therefore requires to be deleted. Software consultancy charges paid to Orbit Software - As pointed out that assessee has deducted tax at source on the above sum. This fact has also been recorded in the order of CIT (A) that assessee has already deducted tax at source on sum paid to Orbit Software. As the ld CIT (A) has also recorded the factum of payment on which tax is deducted, there is no reason to sustain the disallowance. Accordingly, disallowance is not correct. It is also deleted. Software consultancy charges paid to M/s Springfield Organics - Software is goods therefore, in the given instance; it cannot be subjected to tax deduction at source - this fact needs to be verified by the learned assessing officer. In view of this, we set-aside this ground of appeal to the file of the learned assessing officer for verification. If the purchases of software is traded goods and supplied to another client and not for the use of the assessee, no tax is required to be deducted at source. Appeal of assessee allowed.
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