TMI Blog2018 (9) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... TDCL has duly deducted tax at source from the salary payments made by it to its employees, who were deputed to the assessee. As A.R submitted that M/s ITDCL has duly deducted tax at source from the salary payments made to its employees and further the assessee has also clarified this aspect to the tax authorities. Thus we are of the view that the provisions of sec. 40(ba) shall not apply to the payment given to M/s ITDCL, since the said payments have not been received by it on its own account contemplated in sec. 67A r.w.s. 40(ba) of the Act and hence the same shall not acquire the character of “share income from AOP” in its hands. Accordingly we set aside the order passed by Ld CIT(A) on this issue. - Decided in favour of assessee - IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation India Ltd. (an Indian Company) and Thai Development Public Company Ltd. (an Italian Company). The assessee is in the business of development of Highway Projects. The assessee was undertaking the construction of By-pass road on National Highway No. 76 at Kota (Rajasthan) on East West Corridor and also undertook rehabilitation and upgrading of 35 kms of highway on NH 25 in the State of Madhyapradesh. There was no material change in the business of assessee during the relevant financial year. In the return of income, the assessee, inter alia, claimed deduction of salary related expenses paid to employees of ITD Cementation India Ltd., aggregating to ₹ 4,99,19,593/-. The assessee deducted tax at source from the above said payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a)(ia). However, the Hon ble Bombay High Court expressed the view that the Tribunal has not approached the matter/issue, in so far as the applicability of section 40(ba) of the Act and accordingly restored back the same to the file of the Tribunal for deciding the same afresh on merits and in accordance with law. Hence the issue cited above came before us for fresh adjudication. 3. Hence, the issue that requires to be adjudicated is whether the tax authorities are justified in invoking the provisions of sec.40(ba) of the Act to the payment of Salary and related expenses of ₹ 499.19 lakhs made to one of its member M/s ITD Cementation Ltd (ITDCL). We have heard the Ld. Authorized Representative (AR) of the assessee and Ld. Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration is paid for services rendered, which are usually personal in nature. There should not also by any doubt that such kind of services can be provided only by individuals . However, in the instant case, the members of the assessee-AOP are corporate bodies and hence the question of providing any personal services by them would not arise. 6. The Ld A.R also submitted that the nature of payments mentioned in sec. 40(ba) are interest, salary, bonus, commission and remuneration and such payments should acquire the character of income in the hands of the recipients also. He submitted that the member of the assessee M/s ITDCL has not received any salary, which is assessable in its hands in the nature of share of income from AOP. In this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payments contemplated in sec. 40(ba) should constitute Share income from AOP in the hands of the recipient member. In the instant case, the payments made by the assessee to M/s ITDCL do not constitute Share income in the hands of M/s ITDCL, but it merely offsets the expenditure incurred by it, i.e., the money has been received by M/s ITDCL towards reimbursement of expenses incurred by it on its employees on behalf of the assessee. At this stage, the bench specifically asked Ld A.R as to whether M/s ITDCL has duly deducted tax at source from the salary payments made by it to its employees, who were deputed to the assessee. The Ld A.R submitted that M/s ITDCL has duly deducted tax at source from the salary payments made to its employ ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
