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2015 (8) TMI 760 - ITAT CHENNAIDisallowance under Section 40(a)(ia) - whether tax has to be deducted on the amount paid by the assessee and not only the amount payable by the assessee? - Held that:- It is an admitted fact that the point of deduction of tax at source is at the time of payment or credit of the amount to the account of the payee. No provision of Income-tax Act requires the assessee to deduct tax at source in respect of the amount which was not paid. In other words, in respect of the amount which remains payable or to be credited, the Income-tax Act does not require deduction of tax. Therefore, if the assessee has not paid or credited any amount to the account, then there is no question of deduction of tax under any of the provision of the Income-tax Act. The contention of the assessee that the tax has to be deducted only on the amount remains payable on the last date of financial year and the deduction need not be made on the amount already paid, is contrary to provisions of Income-tax Act which requires deduction of tax. If the contention of the assessee is accepted, this Tribunal is of the considered opinion that the entire provisions of Income-tax Act which require the assessee to deduct tax would be meaningless. Section 40(a)(ia) would cover not only to the amounts which are payable as on 31st March of a particular year but also which are payable at any time during the year. Of course, as long as the other requirement of the said provision exist. In that context, in our opinion the decision of the Special Bench of the Tribunal in the case of M/s Merilyn Shipping & Transports vs ACIT [2012 (4) TMI 290 - ITAT VISAKHAPATNAM], does not lay down correct law. - Decided against assessee.
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