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Asstt. Commissioner of Income tax 11 (1) , Mumbai Versus Hindustan Thompson Associates Pvt. Ltd.

2016 (2) TMI 1147 - ITAT MUMBAI

Disallowance u/s.40(a)(ia) on account of short deduction of tax - Held that:- We are faced with two diagonally opposite views about applicability of the provisions of section 40 (a)(ia)of the Act, we are taking the view which is in favour of the assessee that expenses are not liable to be disallowed u/s.40(a)(ia)on account of short deduction of tax. We are following the judgment of Samir Tekriwal (2000 (2) TMI 40 - BOMBAY High Court)- Decided in favour of assessee. - ITA No.746/Mum/2014 - Dated: .....

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claring income of ₹ 137.57 crores. 2. The effective Ground of appeal is about deleting the disallowance of ₹ 47.38 crores, made u/s.40(a)(ia)of the Act, on account of short deduction of TDS. During the assessment proceedings, the AO found that the assessee had deducted tax u/s. 194C of the Act for the payments made to field agents for conducting research survey, data compilation and tabulation. He held that the services availed by the assessee were in the nature of technical services .....

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e AO, invoking the provisions of section 40(i)(ia)of the Act, made a disallowance of ₹ 47,38,35,252/-to the total income of the assessee. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority(FAA). Before him it was contended that short deduction of tax would not attract provisions of section 40(a)(ia)of the Act, that in the earlier years the Tribunal had decided the issue in its favour. The FAA, referred to the order of his predecessor .....

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relied upon the cases of S K Tekriwal(260CTR73). 5 We have heard the rival submissions and perused the material before use find that the Hon ble Kerala High Court in the case of P V S Memorial Hospital(supra), has held that deduction of TDS under wrong provision of law will not save assessee from disallowance u/s. 40(a)(ia)of the Actowever, the Kolkata High Court in the matter of Samir Tekriwal(supra), has held that expenses are not liable to be disallowed u/s.40(a)(ia)on account of short deduc .....

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