Income Tax : Karnataka High Court allows PCIT's appeal, upholding a Section 263 revision for non-disallowance of commission payments without TD...
Income Tax : Understand the penalties, interest, and disallowance of expenditure under Section 201 for failure to comply with TDS provisions in...
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 : 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 confirmed deletion of addition on alleged diversion of interest-bearing funds, holding that hypothetical or notional in...
Income Tax : The Tribunal held that commission paid to foreign agents for services rendered outside India is not taxable in India. Consequently...
Income Tax : The issue was whether commission payments were genuine business expenses. The Tribunal held that disallowance based on non-respons...
Income Tax : The Tribunal held that interest expenses cannot be disallowed when the trust merely facilitates transactions and costs are reimbur...
Income Tax : Consistency over technicalities: ITAT Mumbai allowed actuarial pension provision as an ascertained liability, rejected mechanical ...
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...
In the present case services were provided by the non-resident individuals so article 15 was applicable but the pre-requisite condition that the each non-resident individual had to be present in India for more than 90 days which was not ascertained.
Disallowance of expenditure for deduction of tax at source but non payment of the same on or before the due date of filing of return of income: Sub-clause (i) of clause (a) of aforesaid section has been amended by the Finance (No. 2) Act, 2014 to provide that disallowance under the said sub-clause will be attracted,
ITAT Mumbai has held in the case of Lionbridge Technologies Private Limited vs ITO (International Taxation) (TDS) that There is no liability to deduct tax at source on reimbursement of cost. Consequently for not deducting tax at source, the assessee cannot be treated as assessee in default under sections 201/ 201(1A).
The Court relied on the agreement concluded between Assessee and M/s Lakeshore according to which M/s Lakeshore would run Gastroenterology, Gastrointestinal surgery, Urology, Nephrology and Anesthesiology departments of the assessee upon receipt of payments as per the agreement which was not the case of undertaking a contract work.
In the cited case, ITAT inter-alia held that since the payments have been made as reimbursement of expenses to the agents of the appellant, therefore, appellant was not obliged to deduct TDS under section 194C of the Act and as such, no disallowance is warranted u/s 40(a)(ia) of the IT Act.
In the case of Commissioner of Income Tax vs. DLF Commercial Project Corporation Delhi High Court held that Advance received cannot be treated as income of the assessee and TDS is not deductible on reimbursement of Expenses since it is not an income.
The assessee is a dealer of sarees and AO while framing the assessment disallowed karigar /embroidery charges by invoking the provision of section 40(a)(ia) of the act for non-deduction of TDS u/s 194C of the Act.
The assessee had made payment to the labour contractors without deducting TDS on the same and claimed the same as an expense in his profit & Loss account. AO disallowed the same as per sec 40(a)(ia) for non-deduction of TDS.
ITAT Kolkatta has held In the case of Menally Sayaji Engineering Ltd. VS -CIT that if assessee failed to deduct TDS during the previous year on payments of management service fee and royalty debited to the profit and loss account and if in his Assessment Order Passed U/s. 143(3)
The issue in dispute is that whether disallowance under Section 40(a)(ia) of the Income Tax Act, 1961 applies only to amount ‘payable’ on the year end or whether amount ‘paid’ during the year is also covered within its ambit. In this regard, Hon’ble Allahabad High Court in case of CIT vs. M/s Vector Shipping Services (P) Ltd., (2013) 262 CTR (All) 545 held that for attracting disallowance under the said section, the amount should be payable and not which has been paid by the end of the year.
