Case Law Details
DCIT Vs Morgan Stanley (I) Capital (P) Ltd. (ITAT Mumbai)
Conclusion: Where there was any shortfall due to any difference of opinion as to taxability of any item or nature of payments falling under various TDS provisions, assessee could be declared to be an assessee-in- default under section 201, however, no disallowance could be made by invoking section 40(a)(ia).
Held: AO noticed that assessee had reimbursed amounts towards “advertisement and general expenses” to various group companies on the basis of cost sharing arrangement entered with them. Assessee had deducted tax at source u/s. 194C @ 2%. AO took the view that these reimbursements were liable for tax deduction at source u/s. 194J @ 10% as against 2% deducted by assessee u/s. 194C. Hence, AO, by invoking provisions of section 40(a)(ia), disallowed the amount. It was held if there was any shortfall due to any difference of opinion as to taxability of any item or nature of payments falling under various TDS provisions, assessee could be declared to be an assessee-in-default under section 201, however, no dis allowance could be made by invoking section 40(a)(ia), thus, disallowance made by AO was to be deleted.
FULL TEXT OF THE ITAT JUDGMENT
These cross appeals are directed against the orders passed by the learned CIT(A)-5, Mumbai and they relate to A.Ys. 2010-11 & 2011-12. All these appeals were heard together and hence they are being disposed of by this common order, for the sake of convenience.
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