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 : The Delhi High Court held that the issues raised by the Revenue were either covered by binding precedents or based on factual find...
Income Tax : The Tribunal restricted the Section 14A disallowance to exempt income and deleted additions relating to bad debts, tea and coffee ...
Income Tax : The ITAT Chandigarh held that no TDS was deductible where professional fees paid to each payee were below the statutory threshold....
Income Tax : Bangalore ITAT held that mine development expenditure incurred by a mining contractor was allowable as a revenue deduction under S...
Income Tax : The ITAT Delhi held that an adjustment against excess contributions already made to an approved gratuity fund could not be disallo...
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...
Interest is a term relating to a pre-existing debt, which implies a debtor creditor relationship. According to us, unpaid consideration gives rise to a lien over goods sold and not for money lent. This interpretation of ours is supported by the decision of Hon’ble Supreme Court
High Court placed reliance on same bench ruling in CIT vs. Rajinder Kumar (ITA No. 65/2013) wherein it was held that “the amended Section 40(a)(ia) expands and further liberalises the statute when it stipulates that deductions made in the first eleven months of the previous year
Since there is variation of decisions on ‘paid’ and ‘payable’ issue in view of the fact that the hon’ble Calcutta high court and Gujarat high court have decided the question in favour of the Revenue and the hon’ble Allahabad high court in the case of CIT vs M/s Vector shipping Services (P) Ltd has proceeded in favour of the assessee, the case law of hon’ble supreme court in the case of CIT vs Vegetable Products Ltd., 88 ITR 192 would apply so as to decide the issue in assessee’s favour.
Having heard the rival submissions and perused the relevant material on record, there is no dispute in principle that the amount is otherwise disallowable on merits as has been accepted by the ld. AR in response to the second ground of the Revenue’s appeal.
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,
Provisions of sec. 40(a)(ia) do not provide for absolute disallowance as in the case of say, sec. 40A(3) of the Act. The amount disallowed u/s 40(a)(ia) in one year can be claimed as deduction in the year in which the TDS provisions are complied with.
Issue – Disallowance of Rs 52,07,883, in respect of leather testing charges paid to TUV Product Und Umwelt GmbH – a tax resident of Germany, under section 40(a)(i) of the Act, on the ground that the assessee failed to discharge his tax withholding obligations in respect of the same.
The provisions of section 40(a)(ia) as stood prior to the amendments made by the Finance Act 2010 thus were resulting into unintended consequences and causing grave and genuine hardships to the assessees who had substantially complied with the relevant TDS provisions by deducting the tax at source and by paying the same to the credit of the Government before the due date of filing of their returns u/s 139(1).
We find that the judgment of the Hon’ble Allahabad High Court is in favour of the assessee. At the same time, we find that the orders of the Calcutta High Court and the Gujarat High Court are against the assessee.
Honorable Allahabad High Court approves the special bench judgment in the case of Merilyn Shipping and Transport Ltd. and held that disallowance u/s. 40(a)(ia) applies only to amounts ‘payable’ as of 31st March and not to amounts already ‘paid’ during the year.
