INCOME TAX ACT 1961

Section 194-I

Tax deduction at source - Under section 194-I - Rent paid on hotel accommodation - Benefit of Circular No. 5 of 2002, dated 30-7-2002

AO noticed that assessee had paid an amount towards rent of hotel accommodation on which no TDS was deducted. Accordingly, disallowance was made under section 40(a)(ia) for non-deduction of TDS. Held: Accommodation was booked by the assessee in the club not on a regular basis but on casually and occasionally as and when the foreign consultants visits the assessee in connection with its business. Nothing was brought on record to show that assessee had entered into any prior contract with the hotels for any specific room or rooms for any specific rates or rooms for any specific period. The rooms were hired on as and when available basis at the regular tariff rates subject to the discounts as agreed at the time of booking of rooms. Under these circumstances, the assessee deserves to be given the benefit of the Circular No. 5 of 2002, dated 30-7-2002 issued by the Board providing that under these circumstances, TDS will not be required to be made under section 194-I.

REFERRED :

FAVOUR : In favour of assessee.

A.Y. : 2013-14

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