Income Tax : Learn about disallowed expenses under PGBP in India's Income Tax Act. Understand key sections like 37, 40, and 40A, and their impa...
Income Tax : Learn about disallowances under Income Tax Act sections and their reporting requirements in Form 3CD during tax audits. Key provis...
Income Tax : Delhi HC rules reimbursements to NRAEs not subject to TDS as "fees for technical services," clarifying scope of Section 9(1)(vii) ...
Income Tax : Explore allowable tax deductions for AY 2025-26, covering salaries, house property, business, and personal expenses. Maximize your...
Income Tax : Explore crucial issues in income tax practices, including Section 44AD, TDS obligations, LTCG exemptions, cash deposits, and tax d...
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% ...
Income Tax : The existing provisions of section 40(a)(ia) of Income-tax Act provide for the disallowance of expenditure like interest, commissi...
Income Tax : ITAT Delhi held that fees for providing Spa Consultancy falls under the category of ‘Independent Personal Service’ and hence w...
Income Tax : Jharkhand High Court held that order solely based on the judgement which has been later on over-ruled by the Hon’ble Apex Court ...
Income Tax : ITAT Ahmedabad held that no disallowance under Section 43B of the Act can be made when deduction is not claimed in the profit and ...
Income Tax : The present appeal has been preferred by the revenue. The controversy involved in the present appeals pertains to the treatment of...
Income Tax : The assessee company, engaged in the business of real estate, having multiple ongoing projects of construction and also selling up...
Income Tax : Circular No. 3/2015 Section 40(a)(i) of the Act stipulates that in computing the income chargeable under the head "Profits or gain...
Income Tax : 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...
Income Tax : Circular No. 10/DV/2013-Income Tax It has been brought to the notice of the Board that there are conflicting interpretations by j...
Section 40(a)(ia) covers not only those cases where the amount is payable but also when it is paid. In this behalf, one has to keep in mind the purpose with which Section 40 was enacted and that has already been noted above.
Amendment to Section 40 (a)(ia) of the Act by Finance Act, 2010 is retrospective with effect from 1st April, 2005 as held by various High Courts.
In my earlier article I have made a discussion about the disallowance when the amount is payable to a non-resident /foreign company but TDS is not deducted by the payer . Section 40(a)(ia) deals with the situation when the amount is payable to a resident . Hereon also we will discuss the complete scenario in parts to have a better understanding .
It cannot be denied that expenditure incurred by the assessee for the purpose of developing housing project and not allowable by virtue of section 40(a)(ia) would ultimately go to increase assessee’s profit from such business and profit as computed after making the dis allowance would, therefore, qualify for deduction under section 10A.
ITAT held that that the payment made by the assessee to ICC amounting to Rs. 4.56 crore as `Rights fee’ is not in the nature of `Royalty’ or `Fees for technical services’ covered u/s 9(1)(vi) or 9(1(vii) of the Act and as such the assessee was not obliged to deduct tax at source on this payment. Ex consequenti, the provisions of section 40(a)(i) are not attracted.
Taking of machinery and equipment on hire would not amount to a contract for carrying out any work as contemplated in section 194C of Act.The said contract i.e. taking of machinery and equipment on hire also cannot be treated with a contract for supply of labour.
In the present appeal, the assessee is aggrieved by the action of the Commissioner of Income Tax (Appeals)-Jamnagar [CIT(A)- in short] in confirming the addition of Rs.3,25,528/- made by the Assessing Officer (AO) under s.40(a)(ia) of the Income Tax Act, 1961 (hereinafter referred to as the Act).
Provision of section 40(a)(ia) of the Act are applicable not only to the amounts which is shown as payable on the date of balance sheet but it is applicable to such expenditure which becomes payable at any time during the relevant previous year and was actually paid within the previous year.
Where assessee paid amount to deliveryman to deliver the newspapers and delivery persons were nothing but casually engaged labourers and they have no other work to perform and assessee had wrongly debited the amount as commission in its books, AO was not justified in making dis allowance under section 40(a)(ia) for no TDS by only giving weight age to nomenclature and without seeing the real purpose for payment.
Provisions of section 40(a)(ia) shall, so far as they may be, apply in computing income chargeable under the head income from other sources as they apply in computing income chargeable under the head Profit and gains of business or Profession.
