TMI Blog2014 (12) TMI 1328X X X X Extracts X X X X X X X X Extracts X X X X ..... nt made by the assessee is only to replenish the amount in floating account and, therefore, the disallowance u/s 40(a)(ia) cannot be made when the assessee has not claimed any such expenditure in P&L Account. - Decided in favour of assessee. - ITA NO.6634/Mum/2012, ITA NO.6635/Mum/2012 - - - Dated:- 10-12-2014 - SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER Revenue By Shri S.D. Srivastava Assessee By Shri. F.V. Irani, Shri Biren Gabhawala, And Shri Hitesh Shah ORDER Per Vijay Pal Rao, JM These two appeals by the revenue are directed against the two separate orders of CIT(A) for the A.Y. 2008-09. The revenue has raised common grounds in both appeals which reads as under:- 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nistrator (TPA). The assessee is a company carrying on the business as a TPA duly holding license from Insurance Regulatory and Development Authority (IRDA). The assessee company earns its revenue by way of fees from Insurance companies by providing the Insurance companies, health services, call centre services, cashless access services, claim processing, claim payments, customer relations and management services. During the course of assessment proceedings, the Assessing Officer made the disallowance of ₹ 11,89,18,600/- u/s 40(a)(ia) of the Act., holding that the assessee has failed to deduct tax at source u/s 194J from the payment made by the assessee to hospitals towards payment of claims to insurance policy holders of insurance co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Karnataka in the case of Medi Assist India TPA P. Ltd. vs. DCIT (TDS) and Others (324 ITR 356) (supra), wherein the Hon'ble High Court held that it is the duty and obligation of the TPA to pay the hospitals and insurer will not have any to role to play in as much as it is only to replenish the amount in the floating account once the amount deposited therein is adjusted. The Hon'ble High Court has held that the TPA is obliged to deduct tax at source under section 194J of the Act in as much as money are paid by it to the hospitals in respect of cash less treatments. Therefore in view of the decision of Hon'ble Karnataka High Court there is no escapement of deduction of tax at source under section 194J on the part of TPA and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2009 (T-IT ) relied upon by the Assessing Officer. In that case, provisions of section 201 was applicable but certainly disallowance under section 40(a)(ia) does not arise as Assessee is not claiming any such expenditure in its Profit Loss account. Moreover Revenue accepted the order of CIT(A) in the earlier year. For these reasons, we uphold the order of the CIT(A). 6. A similar view was taken by the Tribunal in the subsequent assessment year in the case of Health India TPA Services P. Ltd. for the assessment year 2009-10 in ITA No. 6475/Mum/2012 order dated 21/02/2014 . In the case of ITO vs. M/s. Hariom Organizers Pvt. Ltd. in ITA No.1946/Ahd./2009 for assessment year 2005-06 order dated 06/05/2011 as well as in the case of Sumilo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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