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2015 (9) TMI 806 - BOMBAY HIGH COURT

2015 (9) TMI 806 - BOMBAY HIGH COURT - [2016] 388 ITR 630 - Eligibility for deduction under section 80IB - additions were made u/s 40(a)(ia) for TDS default - whether ITAT was justified in holding that the disallowance made under section 40(a)(ia) separately is not permissible under the scheme of the Income Tax Act? - Held that:- The fact that TDS was not effected by the respondent assessee, is not in dispute. In view of the scheme of Section 40 of the Act, as TDS is not effected, payment to con .....

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n certain Sections of Chapter VIA, which refer to deduction out of gross total income and other sections of Chapter VIA, which do not make such reference to gross total income, has been explained. CIT (appeals) has correctly pointed out that the deduction allowable under Section 80IB(10) of the Act is with reference to the respondents gross total income. Hence, disallowance under Section 40[a] [ia] cannot be treated separately and it gets added back to the gross total income of the assessee. Sec .....

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nd Parchure, Advocate For the Respondent : Mr. N. S. Bhattad, Advocate JUDGMENT ( Per B. P. Dharmadhikari, J ) Heard Shri Anand Parchure, learned Counsel for the appellant and Shri N.S. Bhattad, learned Counsel for the respondent. 2. By this appeal filed under Section 260A of the Income Tax Act, 1961, the appellant Income Tax Department has sought to raise following two questions, as substantial questions of law : (1) Whether on the facts and in the circumstances of the case that ITAT was correc .....

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ome Tax Act, 1961 (hereinafter referred to as the Act for short), is not in dispute, filed a return in Assessment Year 2006-07 for accounting period 01.04.2005 to 31.03.2006, claiming deduction of ₹ 16,82,121/under that provision. It was taken up for scrutiny, and an order under Section 143(3) of the Act came to be passed, disallowing the expenses under Section 40[a][ia] of the Act for not deducting TDS at source. Thus, payment of ₹ 83,00,738/under the head Subcontract payment; ͅ .....

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ome Tax Department preferred further appeal before the ITAT, which rejected that appeal. 5. Shri Parchure, learned counsel appearing on behalf of the appellant/department submits that the correctness or otherwise of disallowance is not in dispute before this Court. Violation of Section 194C and 194H of the Act is accepted, and as such, the disallowance was not arising out of eligible business. He states that the word derived from cannot have such wide impact, so as to include any income which ca .....

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. (246 ITR 429) is not attracted here. 6. Shri Bhattad, learned counsel for the respondent - assessee on the other hand states that in said matter decided by this Court, the assessee M/s. Shirke Constructions and Equipments Ltd., also had other sources of income, and hence application of mind therein needs to be understood properly. Here, the respondent - assessee (Sunil Vishambharnath Tiwari) does not have any other source of income, except eligible business and this fact is not in dispute. The .....

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