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TMI Blog2015 (3) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... f revenue is against the order of CIT(A) deleting the disallowance made by AO by invoking the provisions of section 40(a)(ia) of the Act for nondeduction of TDS on rent paid to Kolkata Port Trust. For this, revenue has raised following ground nos. 1 and 2: "1. Whether on the facts and circumstances of the case, the CIT(A) has erred in deleting the disallowance of Rs. 38,29,159/- made by the AO, on ground of non-deduction of TDS on rent payment to Kolkata Port Trust. 2. Whether on the facts and circumstances of the case, the CIT(A) has erred in holding that Kolkata Port Trust is a "Corporation" in terms of Section 196(iii) ignoring the fact that the income of Kolkata Port Trust is assessed to tax with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment itself. It is a Corporate entity assessable to tax. Once the payment of rent on account of warehouse by the assessee was made to Kolkata Port Trust and is claimed as expenditure, the same is liable for TDS u/s. 194-I of the Act, for which the assessee has not deducted any TDS. The disallowance made by invoking the provisions of section 40(a)(ia) of the Act by the AO is within the provisions of law. Hence, we restore the disallowance and the order of CIT(A) is reversed. This issue of revenue's appeal is allowed. 5. The next issue in this appeal of revenue is against the order of CIT(A) deleting the disallowance of payment made to M/s. Khaitan & Co., a law firm for a sum of Rs. 7,69,746/- for non-deduction of TDS u/s. 194J of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee should have deducted TDS. The A.O. found that since no TDS was deducted on the payment of Rs. 769746/-. Therefore, he disallowed this amount u/s. 40(a)(ia) of the I. T. Act, 1961. The A.R. contended that there was a dispute with Services and Supplies (India) were M/s. Khaitan & Company was the arbitrator for settlement of the dispute. The payment of Rs. 769746/- was made to Services and Supplies (India) for the settlement of the case and, therefore, TDS was not deductible M/s. Khaitan & Company being the arbitrator in this case simply took the money from the assessee in order to transfer the same to Services and Supplies (India). Therefore, it is not a case where any payment has been made for any legal services to M/s. Khaitan & Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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