The Tax Publishers2019 TaxPub(DT) 5181 (Bang-Trib)

INCOME TAX ACT, 1961,

Section 40(a)(ia)

Though AO made disallowance of payment of lease amount under section 40(a)(ia), as assessee had not deducted tax at source from the amount, but claim of application of second proviso to section 40(a)(ia) had not been examined by the AO, therefore, the matter was restored to the AO for examining the claim of the assessee.

Business disallowance under section 40(a)(ia) - Non-deduction of tax at source - Payment of lease amount -

Assessee paid a lump sum amount for taking a property on lease. The amount so paid was amortised over the period of lease and accordingly, the assessee claimed as deduction in profit and loss account. The assessee did not deduct tax at source from the amount. Therefore, AO disallowed the same under section 40(a)(ia), which was confirmed by CIT(A). The assessee's contention was that recipient had already declared the amount as its income. Therefore, the assessee had not deemed to be an 'assessee in default' under section 201(1). Further that, second proviso of section 40(a)(ia) which was inserted by Finance Act, 2012 with effect from 1-4-2013 should be applied to this year and disallowance should be deleted. Held: The assessee was seeking application of second proviso to section 40(a)(ia) to be present issue and further since this claim had not been examined by the AO. Therefore, the order passed by the CIT(A) was set aside on this issue and the matter was restored to the AO for examining the claim of the assessee.

REFERRED :

FAVOUR : Matter remanded

A.Y. : 2009-10


INCOME TAX ACT, 1961,

Section 37(1)

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT

TaxPublishers.in

'Kedarnath', 7, Avadh Vihar, Near Nirali Dhani,

Chopasni Road

Jodhpur - 342 008 (Rajasthan) INDIA

Phones : 9785602619 (11 am - 5 pm)

E-Mail : mail@taxpublishers.in / mail.taxpublishers@gmail.com