Case Law Details
Ravi Lochan Singh Vs ITO (ITAT Patna)
Introduction: In the case of Ravi Lochan Singh Vs ITO, the Income Tax Appellate Tribunal (ITAT), Patna, underscored a significant aspect of deductions under Section 40(a)(ia) of the Income Tax Act. The Tribunal clarified that deductions under this section should not be disallowed on the grounds of non-deduction of TDS if the recipient has included the income from the receipts of the assessee in their income tax return.
Analysis: The case revolved around multiple disallowances made by the Assessing Officer based on the grounds that the assessee did not deduct TDS under section 194H while making certain payments. These payments included consultancy fees, rent, and commissions to various entities. The assessee argued that these payments were made to entities that had included these receipts in their income tax returns, therefore no TDS should have been deducted. Citing the Hon’ble Supreme Court’s judgment in the case of Hindustan Cocacola vs. CIT, the assessee stated that if the recipient has included the receipts in their income, then the payer should not have the deduction disallowed under Section 40(a)(ia) due to the non-deduction of TDS. The ITAT upheld this argument, deleting the disallowances and ruling in favor of the assessee.
The ruling by the ITAT, Patna, in this case provides significant clarification regarding deductions under Section 40(a)(ia) of the Income Tax Act. It suggests that the non-deduction of TDS should not automatically lead to disallowance of deductions if the recipient has accounted for the income in their tax returns.
FULL TEXT OF THE ORDER OF ITAT PATNA
Please become a Premium member. If you are already a Premium member, login here to access the full content.
