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DCIT Circle – 6 (1) , New Delhi Versus Medsave Healthcare (TPA) Ltd., New Delhi

2015 (8) TMI 11 - ITAT DELHI

Disallowance u/s 40(a) - CIT(A) deleted disallowance - Held that:- The issue under consideration is squarely covered in favour of the assessee as relying on the case of ADIT, International Taxation vs. Express Drilling Systems LLC. [..] and M/s. S.K.Tekriwal [ 2012 (12) TMI 873 - CALCUTTA HIGH COURT] wherein held that Section 40(a)(ia) refers only to the duty to deduct tax and pay to government account there is nothing in the said section to treat the assessee as defaulter where there is a shor .....

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dingly depreciated @ 60%. Since the identical issue has been decided by the Hon’ble Jurisdictional High Court in the aforesaid referred to case by holding that the assessee is entitled to higher rate of depreciation @ 60% and the Ld. CIT has followed the ratio laid down by the Hon’ble Jurisdictional High Court, therefore, we do not see any merit in the appeal of the department on this issue.- Decided in favour of assessee. - ITA NO. 5897 /DEL/2013 - Dated:- 29-5-2015 - Shri N.K.Saini and Smt Div .....

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t the assessee had claimed Generator hire charges of ₹ 1,80,000/- and vehicle hire charges of ₹ 90,000/- in the P & L Account but had not deducted TDS on the said payments as per the provisions of Section 194 (I) of the Income Tax Act, 1961 (hereinafter referred to as the Act). He therefore made the disallowance of ₹ 2,16,000/- by invoking the provisions of Section 40(a) (ia) of the Act. 3. Being aggrieved the assessee carried the matter to the Ld. CIT(A) and submitted as u .....

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hortfall in deduction. Section 40(a) (ia) of the Act refers only to the duty to deduct tax and pay to Government Account. If there is any shortfall the assessee can be declared to be an assessee in default u/s 201 of the Act and no disallowance can be made by invoking the provisions of Section 40(a) (ia) of the Act. This is covered by the decision of the Calcutta High Court in the CIT, Kolkata - XI, vs. M/s S.K. Tekriwal [ ITAT No. 183 of 2012 : GA No. 2069 of 2012] and by the decision of ITAT, .....

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hire charges, the appellant made TDS at the rate of 2% + Education cess instead of 10% + Education cess. According to AO, the deduction should have been at the rate of 10% and the short deduction of TDS attracts the provision of Section 40(a) (ia) and hence the expense is not allowable. Against the same ground of appeal by the appellant in the earlier year (2009-10) relying on the decision laid down in the case as cited by appellant, my Ld. predecessor has decided that if there is any shortfall .....

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sel for the assessee reiterated the submissions made before the authorities below and further submitted that the issue under consideration is squarely covered in favour of the assessee vide order dated 9th January, 2015 of the ITAT, Delhi Bench B, New Delhi in ITA No. 751/Del./2013for the assessment year 2009-10 in the case of ADIT, International Taxation vs. Express Drilling Systems LLC. 6. We have considered the submissions both the parties and carefully gone through the material available on .....

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consistency the issue may be decided in favour of the assessee. The said contention of the assessee was not controverted by the ld. D.R. It is also noticed that the identical issue has been decided in favour of the assessee vide order dated 9th January, 2015 in the case of ADIT International Taxation vs. Express Drilling Systems LLC (Supra) where in relevant findings has been given in para 6 and 6.1 is reads as under :- 6. We find that deletion of disallowance is challenged before us on the gro .....

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of Hon ble Calcutta High Court and eld as follows. The Hon ble Calcutta High Court in the case of CIT vs. S.K.Tekriwal (ITA no. 183 of 2012 has held as follows : We are of the view that the provisions of section 40(a) (ia) of the Act has two limbs one is where, inter alia, assessee has to deduct tax and the second where after deducting tax, inter alia, the assessee has to pay into Government Account. There is nothing in the said section to treat, inter alia, the assessee as defaulter where ther .....

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account. If there is any shortfall due to any difference of opinion as to the taxability of any item or the nature of payments falling under various TDS provisions, the assessee can be declared to be an assessee in default u/s 201 of the Act and no disallowance can be made by invoking the provisions of section 40(a) (ia) of the Act. Accordingly, we confirm the order of CIT(A) allowing the claim of assessee and this issue of revenue s appeal is dismissed. We find no substantial question of law is .....

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ention of the assessee. Respectfully following the judgment of the Hon ble Calcutta High Court in the case of S.K. Tekrisal (supra) this ground is allowed deleting the disallowance made u/s 40(a) (ia). 9.1. Respectfully following we allow ground no. 2. 6.1. Respectfully following the same we uphold the order of the First appellate Authority and dismiss this ground of the Revenue. 7. Since the facts of the present case are similar to the facts involved in the aforesaid referred to case of M/s Exp .....

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ation @ 60% as against 15% allowable. The AO disallowed a sum of ₹ 15,83,875/- and added the same in the income of the assessee. 10. Being aggrieved the assessee carried the matter to the Ld. CIT(A) and submitted as under :- a. A computer system per se consists of multiple parts and devices such, desktop, CPU, UPS, storage device, printers, scanners, keyboards, printers, visual display units, disk drives, magnetic tape drives etc. A computer as an electronic data processing device is capab .....

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t been for computers, UPS would have never been purchased. Their use is confined to a computer system. Such installation therefore remains a part of computer only. Further, UPS are connected to LAN, PCS, Servers etc. hence they form an integral part of the computer system. Considering that they are connected to the computer system and are not used for any other purpose and the further fact that the computers could not have functioned properly without support from UPS, they are considered as inte .....

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of computers and no other item of assets. b. The Kolkata Bench in Income Tax Officer vs. Samiran Majumdar (2006) 280 ITR 74 in dealing with the definition of computer also relying on the decision of the Apex Court in Karnataka Power Corporation (supra) held that printer and scanner could not be used without the computer so that it held that the two would form an integral part of the computer system. In the like manner an uninterrupted Power Systems are also to be used only with a computer hence .....

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Ltd. in ITA no. 1267 dated 31.08.2010 did lend favour here where there was reference to use of the terms computer peripherals and accessories viz. printers, scanners, server etc. The Court went by the reasoning that computer accessories and peripherals cannot be used without the computer hence these would form part of computer only. Likewise UPS use is confined to a computer system hence such installation too therefore remain a part of computer only as held by Delhi High Court. d. The Delhi Benc .....

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