Case Law Details
DCIT Vs Chandabhoy & Jassobhoy (ITAT Mumbai)
Section 40(a)(ia) can be invoked only in the event of non deduction of tax (TDS) but not for lesser deduction of tax. Hence, this will not be the reason to disallow the expense u/s 40(a)(ia) just because of less deduction since section 40(a)(ia) can be invoked only in the event of non deduction of tax but not for lesser deduction of tax.
There is no dispute with reference to the deduction of tax under section 192 and also the fact that in their individual assessments these payments were accepted as salary payments. It is also not disputed that the entire amount paid for 18 consultants is only an amount of `26,75,535/-, which indicates that they are in employment and not professional consultants. It is also not the case that assessee has not deducted any amount. Assessee has indeed deducted tax under section 192 and so we are of the opinion that provisions of section 40(a)(ia) also do not apply as the said provision can be invoked only in the event of non deduction of tax but not for lesser deduction of tax. In view of this, we are of the opinion that there is no merit in Revenue’s contention that the amount paid to the employees should be disallowed as provisions of section 194J would attract.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the Revenue is against the order of the CIT(A)-III, Mumbai dated 20.10.2009.
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