Section 195 TDS applicable only when amount is chargeable to tax in the hands of recipient

C.U.Inspections (I) Pvt. Ltd Vs DCIT (ITAT Mumbai)

Mere fact that the payment in question is not reimbursement of expenses to the holding company would not per se expose the expenditure to disallowance u/s 40(a)(ia) of the Act. It has been noticed supra that the disallowance u/s 40(a)(ia) is activated when there is failure on the part of the assessee to deduct/pay tax at source from the payment on which tax is otherwise deductible as per law. Please become a Premium member. If you are already a Premium member, login here to access the full content.