Tag Archives: section 40(a)(ia)

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

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

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

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

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

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 »

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

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)

Section 40(a)(ia) of Income Tax Act 1961 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 any sum on which tax is deductible at… Read More »

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

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

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

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

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

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

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 »

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

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)

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 »