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2016 (1) TMI 662 - AT - Income TaxTDS u/s 194C - Addition on account of payment of software charges without making TDS - CIT(A) deleted the addition - Held that:- All the relevant details were available before AO but he has not exercised his power to verify the purchase bills. The AO has just only treated the purchase transaction as software development charges on premise and on the basis of nomenclature shown in financial statement of assessee. It is pertinent to note that merely nomenclature of the expense will not change the nature of the expense per se and he relied on the order of Ld. CIT(A). From the aforesaid discussion, we find that AO has disallowed the expense claimed by assessee on account of violation of provision of Sec. 194-C of the Act and AO inferred from the classification of the expense under head "software development charges" was liable for TDS. However, we find force from the submission made by Ld. AR before us that it is a pure transaction of purchase. Therefore, the provision of TDS will not be attracted. In view of this, we are inclined not to interfere with the order of Ld. CIT(A) - Decided in favour of assessee Addition on account of payment of training charges to M/s Leggiadro Consultancy Pvt. Ltd. without making TDS - CIT(A) deleted the addition - Held that:- Assessee has incurred this expense for upgrading the knowledge of the personnel of the company. As and when there is a query about the technical matter the employees used to avail the services by accessing the website of the party online. Ld. AR drew our attention on agreement between assessee and M/s Leggiadro Consultancy Pvt. Ltd. which is placed. We find that said expenses incurred by assessee does not attract the provision of TDS as this expense relates to up-gradation of the knowledge of its employees and for this purpose the assessee has availed certain online facility. Therefore, we are not inclined to interfere into the order of Ld. CIT(A). Hence, this ground raised by Revenue is dismissed.- Decided in favour of assessee Addition on account of reimbursement of expenses without making TDS - CIT(A) deleted the addition - Held that:- AO has disallowed the expense on account of violation of TDS provision. However, as per the submission of assessee this transaction of reimbursement was out of purview of TDS provision besides this, we further find from the order of AO that expense incurred by assessee were in the nature of salary, wages, electricity charges, travelling & administrative charges and AO has not doubted the genuineness of the expense but disallowed those expenses on account of violation of TDS provision. We understand this transaction was out of purview of the TDS provision because it was the reimbursement of cost to the concern party. In view of above, we are inclined not to interfere into the order of Ld. CIT(A).- Decided in favour of assessee
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