Disallowance U/s 40(a)(ia) cannot be made for shortfall due to difference of opinion as to taxability

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

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