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2015 (10) TMI 989 - ITAT AHMEDABADDisallowance u/s. 40(a)(ia) - TDS liability - wrong classification of expenses as payment to contract whereas payment were made towards rent and reimbursement of expenses - Held that:- It is a fact that during the year, Assessee had entered into agreements with Natraj Synthetics and Arbuda Textiles, whereby the Assessee had taken the machineries and other facilities located at the shed on rent. As per the rent agreement, Assessee had agreed to pay the monthly operating charges towards plant and machinery and infrastructure facilities and towards the use of land and building. It was also agreed that the assessee would bear all expenses in the nature of labour wages staff salaries, manufacturing expenses etc. It was also agreed interalia that at the expiration of the term, the Assessee will hand over vacant possession of the set up. Revenue has not brought any material on record to demonstrate that the agreement entered into by the Assessee was not in existence or an afterthought. In view of the aforesaid facts, we are of the view that the payment made by Assessee consisted of agreed payments towards rent and therefore also reimbursements. Further, with respect to reimbursements, no material has been brought on record by Revenue to doubt its genuineness. Further the submission of ld. A.R. that the payee’s have also paid the taxes has not been doubted by Revenue. In view of the aforesaid facts, we are of the view that no disallowance u/s. 40(a)(ia) can be made in present case. - Decided in favour of assessee.
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