section 40(a)(ia)

Section 28(va) and Section 40(a)(ia) of Income Tax Act, 1961- Q&A

Income Tax - INCOME TAX QUESTIONS & ANSWERS SERIES PART -IV – Sub: Section 28(va) and Section 40(a)(ia) of the Income Tax Act, 1961; Today we are going to consider two problems based on provisions of Sections 28(va) and Section 40(a)(ia) of the Income Tax Act, 1961 respectively. PROBLEM :- A Ltd., transfers a building worth of Rs. […]...

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Disallowance for Non deduction of Tax at Source

Income Tax - Analysis of Section 40(a)(i)- Non-compliance of Provisions of TDS where payment is made to Non Resident If any interest, royalty, fees for technical services or other sum chargeable under this Act, which is payable,— (A) Outside India; or (B) In India to a non-resident, not being a company or to a foreign company, On which […]...

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Section 194C amendments & important judgements on section 40(a)(ia)

Income Tax - Section 194C of the Income tax Act 1961 with amendments and some important court judgements on section 40(a)(ia) What is the nature of contract and who is the contractor and whether liability to deduct TDS under section 194C arises or not etc. This has been explained as under with circulars issued by the CBDT from […]...

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Section 40(a)(ia) disallowance for payment made to Non resident shipping companies – Draft submission

Income Tax - Draft submission regarding applicability of section 194C , 195 and disallowance u/s 40(a)(ia) with regard to payment made to Non resident shipping companies Addition of Rs.4,61,811/- u/s 40(a)(ia) of the Income Tax Act for failure to deduct tax at source. This relates to AY 2007-08 The facts are that during the course of assessment procee...

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Form 26A – Why, What and How

Income Tax - The section 201(1) of Income Tax Act, 1961 talks about when assesse is not treated as assesse in default. That is, when he had complied certain conditions and furnished the Form 26A. Let’s see what this form is and how it is furnished. Legal Aspects – Analysis of Section 201(1) read with its proviso and […]...

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Section 40(a)(ia): Disallowance of expenditure for non-deduction of tax at source on payment made to resident

Income Tax - Section 40(a)(ia) is amended via Finance (No. 2) Act, 2014 to restrict the amount of disallowance for non-deduction of tax to 30% of expenditure. The proviso is also amended to the effect that 30% of such sum shall be allowed as a deduction in computing the income of the previous year in which tax has been paid....

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Change in provisions related to disallowance of expenditure on account of non-compliance with TDS provisions : Budget 2010-11

Income Tax - The existing provisions of section 40(a)(ia) of Income-tax Act provide for the disallowance of expenditure like interest, commission, brokerage, professional fees, etc. if tax on such expenditure was not deducted, or after deduction was not paid during the previous year....

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Service of procuring export order for assessee cannot be termed as FTS

Rajinder Kumar Aggarwal (HUF) Vs DCIT (ITAT Delhi) - In the services rendered by the non-resident of procuring export order for the assessee, no knowledge has been provided to the assessee which could be exploited further by the assessee. In such circumstances, the services rendered by the non-resident cannot be held as ‘FTS’ under the India-Franc...

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TDS not deductible on exempt supplementary rent – Section 10(15A)

InterGlobe Aviation Ltd. Vs JCIT (ITAT Delhi) - The appellant has alleged disallowance of lease rental payment treating the same as capital expenditure. Further, the appellant has also alleged that CIT(A) has erred in upholding the payment of supplementary rent to Lessors in Ireland under Lease Agreements executed after 01st April 2007 attracts l...

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No TDS on commission paid to a foreign agent for service provided outside India

Evolv Clothing Company Pvt. Ltd. Vs ACIT (Madras High Court) - Section 40(a)(i) did not contemplate order wise commission based on the order value. Consequently, the expenditure on export commission payable to non-residents for services rendered outside India became an allowable expenditure....

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TDS not deductible by distributor for mere routing of commission paid to retailers by telecom company through his ledger

Laxmi D. Gupta Vs ITO (ITAT Mumbai) - Laxmi D. Gupta Vs ITO (ITAT Mumbai) ITAT: Telecom Distributor is exempt from TDS on Commission given directly to Retailers by Service Provider In the case, the Appellant is engaged in distribution of SIM cards and mobile recharge coupons of Uninor. During proceedings, upon perusal of financial state...

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No section 40(a)(ia) disallowance for professional charges not claimed in profit and loss account

ACIT Vs Conwood Medipharma Pvt. Ltd. (ITAT Delhi) - ACIT Vs Conwood Medipharma Pvt. Ltd. (ITAT Delhi) CIT(A) noted that the assessee had not claimed the said professional expenses in its profit & loss account and had capitalized the same under work in progress i.e. ‘Building under Construction’ in fixed assets schedule. The CIT(A) thu...

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Disallowance for failure to withhold tax- Sec.195 rw Sec. 40(a)(i)

Circular No. 3/2015-Income Tax - (12/02/2015) - Circular No. 3/2015 Section 40(a)(i) of the Act stipulates that in computing the income chargeable under the head "Profits or gains of business or profession", any interest, royalty, fees for technical services or other sum chargeable under this Act either payable in India to a non-resident (not bei...

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S. 195 AOs to tax taxable part of sum paid to NR for TDS default

Instruction No. 02/2014 - (26/02/2014) - Sub: Deduction of tax at source under Section 195 read with Sections 201 of the Income-tax Act, 1961 relating to payment made to a non-resident-reg. Section 195 of the Income-tax Act (hereafter referred to as 'the Act') provides that any person, responsible for paying to a non-resident not being ...

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CBDT circular on Section 40(a)(ia)-TDS Disallowance

Circular No. 10/DV/2013-Income Tax - (16/12/2013) - Circular No. 10/DV/2013-Income Tax It has been brought to the notice of the Board that there are conflicting interpretations by judicial authorities regarding the applicability of the provisions of section 40(a)(ia) of the Income-tax Act,...

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section 40(a)(ia)’s Popular Posts

Recent Posts in "section 40(a)(ia)"

Service of procuring export order for assessee cannot be termed as FTS

Rajinder Kumar Aggarwal (HUF) Vs DCIT (ITAT Delhi)

In the services rendered by the non-resident of procuring export order for the assessee, no knowledge has been provided to the assessee which could be exploited further by the assessee. In such circumstances, the services rendered by the non-resident cannot be held as ‘FTS’ under the India-France DTAA....

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TDS not deductible on exempt supplementary rent – Section 10(15A)

InterGlobe Aviation Ltd. Vs JCIT (ITAT Delhi)

The appellant has alleged disallowance of lease rental payment treating the same as capital expenditure. Further, the appellant has also alleged that CIT(A) has erred in upholding the payment of supplementary rent to Lessors in Ireland under Lease Agreements executed after 01st April 2007 attracts liability for TDS....

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No TDS on commission paid to a foreign agent for service provided outside India

Evolv Clothing Company Pvt. Ltd. Vs ACIT (Madras High Court)

Section 40(a)(i) did not contemplate order wise commission based on the order value. Consequently, the expenditure on export commission payable to non-residents for services rendered outside India became an allowable expenditure....

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TDS not deductible by distributor for mere routing of commission paid to retailers by telecom company through his ledger

Laxmi D. Gupta Vs ITO (ITAT Mumbai)

Laxmi D. Gupta Vs ITO (ITAT Mumbai) ITAT: Telecom Distributor is exempt from TDS on Commission given directly to Retailers by Service Provider In the case, the Appellant is engaged in distribution of SIM cards and mobile recharge coupons of Uninor. During proceedings, upon perusal of financial statements, the AO disallowed the expenses cl...

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Section 28(va) and Section 40(a)(ia) of Income Tax Act, 1961- Q&A

INCOME TAX QUESTIONS & ANSWERS SERIES PART -IV – Sub: Section 28(va) and Section 40(a)(ia) of the Income Tax Act, 1961; Today we are going to consider two problems based on provisions of Sections 28(va) and Section 40(a)(ia) of the Income Tax Act, 1961 respectively. PROBLEM :- A Ltd., transfers a building worth of Rs. […]...

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No section 40(a)(ia) disallowance for professional charges not claimed in profit and loss account

ACIT Vs Conwood Medipharma Pvt. Ltd. (ITAT Delhi)

ACIT Vs Conwood Medipharma Pvt. Ltd. (ITAT Delhi) CIT(A) noted that the assessee had not claimed the said professional expenses in its profit & loss account and had capitalized the same under work in progress i.e. ‘Building under Construction’ in fixed assets schedule. The CIT(A) thus deleted the addition. We find merit in...

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Sales Commission cannot be treated as Technical Services

CIT Vs Wheels India Limited (Madras High Court)

CIT Vs Wheels India Limited (Madras High Court) After hearing the submissions of the auhorized representative of the assessee, the CIT(A) perused the copies of the agreement and on facts, found that the amounts paid by the assessee were sales commission and marketing services to nonresident agents outside India for their services rendered...

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TDS on trade discount to news paper vendors & P2P payment to Advertising Agents

PCIT Vs Dempo Industries Pvt. Ltd. (Bombay High Court)

PCIT Vs Dempo Industries Pvt. Ltd. (Bombay High Court) Heard the learned Counsel for the parties. 2. This appeal was admitted on 18th October 2016 on the following substantial questions of law: A. Whether the Hon’ble ITAT was right in completely ignoring the decision of the Hon’ble ITAT, Kolkata in ACIT V/s. Bharati Cellular L...

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Payments for computer software sold/licenced on a CD/other physical media cannot be classed as a royalty

World Courier (India) Pvt. Ltd. Vs ACIT (ITAT Bangalore)

World Courier (India) Pvt. Ltd. Vs ACIT (ITAT Bangalore) M/s. World Courier (India) Pvt. Ltd. (Appellant) has filed an appeal against order dated April 24, 2017 of Commissioner of Income Tax (Appeals) (CIT(A)) on the issue whether Revenue authorities were justified in disallowing sum paid by the Appellant as software maintenance charges t...

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No section 40(a)(i) disallowance for commission paid to overseas agents

Carraro India Private Limited Vs DCIT (ITAT Pune)

Carraro India Private Limited Vs DCIT (ITAT Pune)  It is seen that the assessee paid commission of Rs.58.65 lakh to overseas agents for export orders obtained by them in overseas territories. Section 195 mandates the deduction of tax at source from any sum paid by the assessee which is ‘chargeable under the provisions of this [&hel...

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