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. Deduction of tax at source u/s 195 from payment is envisaged when the amount is chargeable to tax in the hands of recipient. Reimbursement of expenses to...