Tag Archives: section 40(a)(ia)

Apply TDS u/s 194J on provision for Audit Fees :ITAT Chennai

By | April 17, 2018

On perusal of section 194J of the Act, we find that tax is deductible at source either at the time of credit of expenditure to the account of the payee or at the time of payment whichever is earlier. In the instant case, the assessee had made provision for audit fees to the account of… Read More »

Definition of “ payable ” under section 40(a)(ia) – SC Judgment

By | May 9, 2017

Definition of “payable” under section 40(a)(ia) The Supreme Court of India addressed the term “payable” when there is a requirement to withhold (deduct) tax at source and remit the withheld tax to the government. Section 40(a)(ia) applies not only to situations when the amount is “payable” but also when it is “paid”. The case is:… Read More »

40(a)(ia) disallowance for TDS default even if no sum payable at year end; SC

By | May 4, 2017

Held Section 40(a)(ia) covers not only those cases where the amount is payable but also when it is paid. SUPREME COURT OF INDIA Palam Gas Service v. Commissioner of Income-tax A.K. SIKRI AND ASHOK BHUSHAN, JJ. CIVIL APPEAL NO. 5512 OF 2017 MAY  3, 2017 Raj Kumar Mehta and Ms. Himanshi Andley Advs. for the… Read More »

Non filing of 15G/15H would not invoke disallowance u/s 40(a)(ia)

By | November 2, 2016

Held ”Since separate provisions were prescribed on default for non-filing or delayed filing of Form 15G/15H to Commissioner. non filing of such form would not invoke disallowance under section 40(a)(ia) and that where person responsible to deduct TDS received declaration in form 15G/form 15h non-filing or delayed filing of such form before Commissioner would not… Read More »

Disallowance of income component in case of Non Resident u/s 40(a)(ia) : CBDT

By | October 29, 2016

F.No.500/39/2015 (US FT & TR-V) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes Foreign Tax & Tax Research –II FT & TR-V Division New Delhi, 26th of October, 2016. To All the Pr. Chief Commissioner of Income Tax / Pr Director General of Income Tax Sir Madam, Sub: Withholding… Read More »

Disallowance under section 40(a)(i)/(ia)/(iii) for non Deduction of TDS

By | October 16, 2016

Disallowance under section 40(a)(i)/(ia)/(iii) for non Deduction of TDS Disallowance under section 40(a)(i)/(ia)/(iii) Section 40(a) provides that in the case of any assessee following amounts shall not be deducted in computing the income chargeable to tax,— (i)           any interest, royalty, fees for technical services or other sum chargeable under this Act, which is payable,—… Read More »

Club membership fee paid for employee is admissible business expenditure

By | August 1, 2016

IN THE ITAT MUMBAI BENCH ‘F’ Foods and Inns Ltd. v. Assistant Commissioner of Income-tax, Circle 10(2), Mumbai JASON P. BOAZ, ACCOUNTANT MEMBER AND SANDEEP GOSAIN, JUDICIAL MEMBER IT APPEAL NOS. 1262/MUM/2011, 6629/MUM./2012 & 6271/MUM./2014 [ASSESSMENT YEARS 2007-08, 2009-10 & 2010-11] JUNE  7, 2016 Keshav B. Bhujle for the Appellant. G.M. Doss and S.R. Kirtane… Read More »

No Disallowance u/s 40(a)(ia) when books rejected and income estimated

By | July 31, 2016

IN THE ITAT KOLKATA BENCH ‘A’ Future Distributors v. Principal Commissioner of Income-tax, Kolkata P.M. JAGTAP, ACCOUNTANT MEMBER AND S.S. VISWANETHRA RAVI, JUDICIAL MEMBER IT APPEAL NO. 277 (KOL.) OF 2016 [ASSESSMENT YEAR 2010-2011] JULY  29, 2016 S.K. Tulsiyan, Advocate for the Appellant. Sachchidananda Srivastava, for the Respondent. ORDER P.M. Jagtap, Accountant Member – This… Read More »

Trust claiming exemption u/s 10(23C), No Section 40(a)(ia) Disallowance

By | July 29, 2016

Held The assessee was registered under section 10(23C)(iv) of the Act and claimed exemption under the said Act. Similarly, in assessment years 2009-10, 2010-11, since the assessee was registered under section 12AA of the Act, the income was claimed to be exempt under section 11 of the Act. It is also a fact on record… Read More »

Payment for purchase of software is not royalty/ fees for Technical Services, hence no TDS u/s 195

By | July 27, 2016

Held AO/DRP have erred in treating the acquisition of software under the head ‘fee for technical services/royalty’ requiring the assessee to pay the tax on the same. [para 30] IN THE ITAT DELHI BENCH ‘I-1’ SAIC India (P.) Ltd. v. Deputy Commissioner of Income-tax, Circle 7(1), New Delhi KULDIP SINGH, JUDICIAL MEMBER AND N. K.… Read More »

Disallowance of expenses for non deduction of TDS : Section 40(a)

By | May 28, 2016

Section 40(a)(ia) of Income Tax Act 1961 Disallowance of expenses for non deduction of TDS BUY Analysis of Section 40(a)(ia) relating to Disallowance of expenses for non deduction of TDS 30%  disallowance of expenses for non deduction of TDS  under Section 40(a)(ia) This 30% disallowance of expenses for non deduction of TDS  under Section 40(a)(ia) of… Read More »

No disallowance of section 40(a)(i) if Non resident has no permanent establishment in India

By | May 26, 2016

Issue The assessee is supplying software related services and in this connection has made payment of communication charges, commission charges, legal and professional charges, marketing & selling charges and business development charges. These payments were made to various entities abroad and some of which are associated concerns of the assessee company. It was also noted… Read More »

Not liable to Deduct TDS in case amendment with retrospective effect

By | March 23, 2016

Facts of the case The assessee company has made payment to M/s Holcim Group Support Ltd, (HGSL), a resident company of Switzerland.  The assessee has not deducted TDS in respect of following payments which were on account of training conducted by the Switzerland company outside India. Issue why disallowance under section 40(a)(i) should not be made… Read More »

Section 40(a)(ia) applicable only to Outstanding expenses “payable” at the end of year :ITAT CHENNAI

By | December 8, 2015

IN THE ITAT CHENNAI BENCH ‘D’ DCS BPO (P.) Ltd. v. Assistant Commissioner of Income-tax CHANDRA POOJARI, ACCOUNTANT MEMBER AND CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER IT APPEAL NO. 3114 (MDS.) OF 2014 [ASSESSMENT YEAR 2008-09] JUNE  19, 2015 Ms. K. Hemalatha, CA for the Appellant. N. Madhavan for the Respondent. ORDER Chandra Poojari, Accountant Member… Read More »

Second proviso to section 40(a)(ia) introduced w.e.f 1.4.2013 is prospective

By | November 23, 2015

Fact that recipient has subsequently paid tax, will not absolve payee from consequence of disallowance under section 40(a)(ia). Second proviso to section 40(a)(ia) introduced with effect from 1-4-2013 is only prospective Note :Second proviso to section 40(a)(ia) is as follow:- Provided further that where an assessee fails to deduct the whole or any part of the… Read More »

Section 40a(ia) Case laws

By | October 23, 2015

Section 40a(ia): Applicability in case of capitalization of expenses ? Held- Not applicable Income Tax Officer vs. M/s Hariom Organizers Pvt. Ltd (ITAT Ahmedabad Bench ITA no. 1496/Ahd/2009) Where an expenditure has been capitalized and tds is not deducted thereon u/s40a(ia) the same is not disallowable. Section 40a(ia)- Whether Depreciation is to be disallowed on expenses capitalized on… Read More »

section 40(a)(ia) Payer not liable for TDS default due to retrospective amendments

By | September 28, 2015

Whether disallowance under section 40(a)(ia) should be made on the basis of subsequent amendment brought into the Act with retrospective effect.? Summary of Case on section 40(a)(ia) :- Where Assessing Officer on basis of amendments introduced in section 9(1)(vi) with retrospective effect held that assessee was liable to deduct tax at source from licence fee… Read More »

Second proviso to section 40(a)(ia) is applicable retrospectively

By | September 3, 2015

Second proviso to section 40(a)(ia) is applicable retrospectively Q : Whether the second proviso to Section 40(a)(ia) (inserted by the Finance Act, 2012), which states that TDS shall be deemed to be deducted and paid by a deductor if resident recipient has disclosed the amount in his return of income and paid tax thereon, is… Read More »

section 40(a)(ia) No disallowance of expense if Income is Exempt

By | August 26, 2015

Section 40(a)(ia) No disallowance of expense if Income is Exempt Q When the income of the Assessee is exempt, Whether any disallowance of expenses under section 40(a)(ia) can be made for non deduction of TDS ? Assessee’s total income is exempt under section 10(26), for assessee’s lapse of not complying with his tax withholding obligations,… Read More »

TDS on Provision for Expenses

By | August 23, 2015

TDS on Provision for Expenses Q : Whether there is TDS on Provision for Expenses created in the books ? For TDS on Provision for Expenses we have to read Section 190, with sections 4, 40(a)(i), 40(a)(ia) and 201, of the Income-tax Act, 1961 Subject : Deduction of tax at source /Suspense acccount Assessment years 2006-07… Read More »

40(a)(ia) TDS default based on opinion of CA was bona fide mistake , No Penalty

By | August 5, 2015

Question: Where assessee-company made payment to a foreign company without deduction of tax at source on basis of certificate issued by Chartered Accountant, same was a bona fide mistake and hence, assessee was not liable to penalty for concealment of income ? Answer Yes,  When it was found that Chartered Accountant had given a certificate to… Read More »

payable under section 40(a)(ia)

By | July 28, 2015

Requirement to deduct tax at source under section 194C is mandatory and, in case of assessee’s failure to do so in respect of contractual payments, disallowance has to be made under section 40(a)(ia) irrespective of fact as to whether assessee is following cash or mercantile system of accounting HIGH COURT OF PUNJAB AND HARYANA P.M.S.… Read More »