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2021 (5) TMI 891 - AT - Income TaxDisallowance u/s 40(a)(ia) - shortfall in deduction of tax at source due to difference in opinion - HELD THAT:- As to the taxability of any payment or nature of the payment made under the TDS provisions. It is also submitted that for this reason no disallowance could be made by invoking provisions of section 40(a)(ia). Hon’ble Calcutta High Court in case of S.K.Tekriwal [2011 (10) TMI 10 - ITAT, KOLKATA]on identical facts analysed identical argument. Their Lordships considered the very same issue of applicability of provisions of section 40(a)(ia) of the Act, in a case where there was short deduction of tax at source on payment made to sub-contractors. Hon’ble Calcutta High Court held that if there is any short fall in deduction of tax due to difference in opinion on understanding of taxability of any item or nature of payment falling under various TDS provisions, no disallowance can be made by invoking provisions of section 40(a)(ia) of the Act. Admittedly, the present facts is not the case of no deduction of TDS and that assessee under a bona fide belief, deducted TDS at 2% under section 194C. It is also apparent from the agreement that it was a bundle of services that was rendered by VBHC to assessee against which a consolidated payment has been made. Respectfully following the above decision, we are of the view that no disallowance could be made by invoking provisions of section 40(a)(ia) of the Act, if there is any short fall in the action of tax at source due to difference of understanding our opinion as to the taxability of any item or nature of payment falling under various TDS provisions. Grounds raised by assessee stands allowed.
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