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Commissioner of Income-Tax, TDS, Versus M/s. Symphony Marketing Solutions India Pvt. Ltd.

TDS u/s 192 - per-diem allowance paid to the employees as a part of the salary - ITAT deleted tds liability - Held that:- f any allowance or benefit not being in the nature of perquisite is granted to meet the expenses wholly, necessarily or exclusively incurred in performance of duties, to the extent to which such expenses are actually incurred would fall in the sa id category. It is the case of the assessee that the payment was not made as an allowance on par with the perquisites, but the case .....

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istry. No substantial question of law, would arise for consideration, as canvassed - Decided against revenue. - ITA. No. 653/2015 C/W ITA.NOs. 654 AND 655/2015 - Dated:- 1-4-2016 - J U D G M E N T All these appeals are preferred by the Revenue by raising following substantial questions of law:- 1.Whether on the facts and in the circumstances of the case, the Tribunal is right in law in relying on the circulars No.33 (LXXX-VI-5) dated 01/08/1955 and No.Q/FD/695/1/90 dt:11/11/1996 issued by Minist .....

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as a part of the salary is not liable to TDS under section 192? 2. We have heard Mr.K.V. Aravind, learned counsel appearing for the appellants. 3. We may record that the Tribunal in the impugned order while considering aforesaid aspect h as observed at paragraphs 4.3.1 to 4.3.3 as under:- 4.3.1 We have heard the rival submissions and perused and carefully considered the material on record; including the judicial pronouncements and Govt. of India Circulars cited and referred to. Th e facts of th .....

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t briefly at paras 2.1 to 2.3 of this order (supra). 4.3.2. We find that the learned CIT (Appeals) s in their impugned orders had considered the decisions of the ITAT, Kolkata Bench in the case of Saptarshi Ghosh (supra) and decision of the Mumbai Bench of the ITAT in the case of Madanlal Mohanlal Narang(supra) wherein it was held that it is not open to Revenue to call for details of expenditure incurred unless the per diem allowance paid is disproportionately high compared to the salary receive .....

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n the impugned order for Assessment Year 2009-10 dated.25.9.2014, the last of the impugned orders to be passes, the learned CIT(Appeals) held as under at 3 to 5 as under:- 3.0 I have carefully considered the facts, the appellant s submissions and perused the impugned order. I agree with the argument of Id. A.R. that the per diem allowance paid to its employees qualifies for exemption under Section 10(14)(i) of the Act r.w. Rule 2BB(1). Clause (b) of Rule 2BB(1) refers to any allowance to meet th .....

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es cannot prevail over the fact of incurring such expenses. It is found that the Assessing Officer has not gone through the CBDT Circular wherein it is clarified that where specific allowances are reasonable with reference to the nature of the duties performed by the employee and are not disproportionately high compared to the salary received by him, no attempt will ordinarily be made to call for details of expenses actually incurred by him with a view to disentitling him to some extent from the .....

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ts that there is no such requirement in the law. The provision of section 10(14) and 10(5) are somewhat pari material, in the sense that proviso to section 10(5) also puts a ceiling that such allowance shall not exceed the actual expenditure. In any case, the allowance cannot be denied exemption under section 10(14) and assessee-employer said to be in default for failure to deduct tax on the ground of absence of proof of such actual expenses on food, travel, laundry incurred by the employees, wh .....

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directed to exclude such amounts of per diem allowances form the amounts liable to TDS under Section 192. Appellate Grounds of appeal (No.1.1 to 1.4) on the issue are allowed. 4. The other ground (No.2) of appeal raised is with regard to levying of interest under Section 201(1A), amounting to ₹ 12,93,117 relating to default under Section 201(1) rws 192. Since, the assessee has been held to be not in default under section 201(1) with regard to the per diem allowances paid the interest unde .....

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ing the decision of the Hon ble ITAT, Kolkata Bench in the case of Saptarshi Ghosh (supra) wherein it has been held that there is no requirement for the assessee-employer to collect and verify the proof of journey, actual expenditure incurred in respect of per diem allowance and further that it is not open to revenue to call for details of expenditure unless the allowances are highly disproportionate or ureasonable to the salary received or nature of duties performed. We also concur with the fin .....

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ct with regard to per diem allowances paid, interest under Section 201(A) of the act is also consequently not chargeable. Consequently, the Grounds at S.Nos. 1 to 4 raised by Revenue are rejected for all three Assessment Years 2009-10 to 2011-12. 4. The aforesaid shows that the Tribunal has followed its earlier judicial pronouncement of Kolkata Bench and has also considered circulars issued by the Ministry of External Affairs, Government of India instructing that if the amount which is stated to .....

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alary or wages and therefore, the TDS was deductable. However, when he was confronted with the nature of the amount as to whether such amount is taxable or not, he submitted that as per Section 10(14) if it is by way of reimbursement, such amount would not be taxable. But it is his submission, the payment made cannot be treated as reimbursement because it is paid without verification of the expenses already incurred by th e employee concerned. 6. Section 10(14) of the Act reads as under:- (14)(i .....

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