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2015 (11) TMI 1007 - AT - Income TaxDisallowance u/s 40(a)(ia) - payment made to the consolidator for transfer of rights - TDS on amount paid to the consolidator u/s 194C or 194H - Held that:- Almost 2% of the sale value was being paid by the assessee to Vikram Electric Equipment P. Ltd. as consideration for transferring Vikram Electric Equipment P. Ltd.’s rights. This was in terms of the afore-mentioned clause 3.2. of the MOU between the assessee and Vikram Electric Equipment P. Ltd. It has not been shown if such payment is not a fair compensation paid by the assessee to Vikram Electric Equipment P. Ltd. which, anyhow, is not an impediment in holding, as above, that the transactions between the assessee and Vikram Electric Equipment P. Ltd. are on a principle to principle basis, not attracting the provisions of section 194 H of the Act. Pertinently, no addition having been made for the year by the AO, the alternate contention of the assessee to the effect that no addition can be made during the year, stands accepted by both the Authorities below. The provisions of section 40(a) (ia) of the Act in any case do not apply, the assessee having not claimed any deduction for any expenses on account of payment to Vikram Electric Equipment P. Ltd. either in its profit and loss account or in the computation of taxable income filed. It was only that the AO recorded a loss of ₹ 19,700/-. This obviously, did not include any addition of either ₹ 4.02 crores or ₹ 1.24 crores. - Decided in favour of assessee.
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